WHEN IT COMES TO TELEPHONES, THE DIFFERENCE IS SWITCHING

The Public Switched Telephone Network (PSTN) is under attack. The "telephone company" personified by AT&T is gone. A growing number of consumers and businesses are switching from traditional analog PSTN service to digital services that use the Internet to place calls. The technology is called Voice over Internet Protocol or VoIP.

It is estimated that about 12% of U.S. businesses were using VoIP at the end of 2004. That number is projected at 20% by the end of 2005.

VoIP is one of the fastest growing telecommunications market segments. If you are not using it today, you will be soon. In fact some telecommunications providers already route calls over the internet to reduce their costs. You may be using VoIP and not know it.

VoIP refers to a set of technologies for transmitting voice communications over the Internet. The primary driving force behind VoIP is cost savings. It is much cheaper to make long distance calls using VoIP than PSTN. You are already paying for Internet connectivity so the incremental cost to add voice capability is minimal.

Let's look at what makes VoIP different.

For over 100 years, PSTN has used "circuit switching" to connect callers. Essentially, your call is routed through a number of electronic switches to create an end-to-end connection between you and the person you are calling. PSTN converts audio signals into analog electrical signals (that is, waveforms).

A drawback to PSTN is that it keeps the circuit open in both directions continually so that signals are transmitted even during breaks in the conversation. This makes PSTN very inefficient by today's standards. While effective for voice communications, PSTN has extremely limited ability to transmit any other form of information including music, video and computer data.

VoIP uses "packet switching", a digital approach. Conversations are digitized, compressed, and broken up into data packets that are transmitted individually. Each packet typically contains about 30 milliseconds of information. The conversation is uncompressed and reassembled at the receiving end. A dedicated circuit is not required as the packets are sent along any available route. If there is a lull in the conversation, little or no data is transmitted. This results in efficient bandwidth utilization enabling more calls to be handled simultaneously.

As with everything else related to the Internet, there is more than one way to implement VoIP. Here's a look at the major technologies in use.

H.323 is the oldest and most widely used communications protocol used for VoIP. It was created by the International Telecommunications Union (ITU). H.323 defines a framework that companies use to develop products for real-time voice and video communications over the Internet.

Session Initiation Protocol (SIP) is newer. It was developed by the Internet Engineering Task Force (IETF) specifically for IP telephony. SIP is smaller and more efficient than H.323. It takes advantage of several existing internet protocols to transmit and receive signals.

There are two additional technologies in use to control VoIP calls and to interface them to PSTN systems. These technologies are Media Gateway Control Protocol (MGCP) and H.248/MEGACO (MEdia GAteway COntrol protocol). Think of H.248/MEGACO as a newer, enhanced version of MGCP.

All of these protocols exist behind the scenes. The real questions revolve around what you need to do to take advantage of VoIP in your business.

There are four options that you can mix and match as needed.

VoIP began by using computers as telephones. All you need is a sound card, microphone, high-speed Internet connection, and appropriate software.
Dedicated IP phones are available that look like regular telephones but plug into Ethernet wiring (using RJ-45 connectors) instead of telephone wiring (RJ-11). These phones can be a little pricey because they contain all the hardware and software required.
The least disruptive approach is to purchase an analog telephone adaptor (ATA) or gateway enabling you to connect standard telephones to your Internet connection through the ATA. The ATA converts the "circuit switch" signals from your existing telephone system to "packet switch" data streams.
The newest option to consider is the Wi-Fi phone. Think of it as a cell phone for use inside your building. Combination Wi-Fi / Cell phones are just starting to appear. They switch modes depending on which signal is strongest allowing people to roam freely inside and out.

The most obvious benefit to VoIP is cost savings. VoIP allows you to make inexpensive phone calls using unlimited calling plans at half the cost of standard phone services.

In addition, consider these potential benefits.

Create a private interoffice network between main and branch offices;
Reduce cabling costs by using the same cabling to transport voice and data;
Cancel service and support contracts on existing PBX hardware;
Add web and video conference services with minimal incremental cost.

Potential pitfalls lay in areas such as 911 service, burglar alarms, and other systems that "phone home" for servicing. Up until recently, emergency 911 service was not available with VoIP systems. That has begun to change and won't be a problem much longer. Burglar alarms and other systems that are connected to a monitoring service through a telephone line may experience problems with VoIP. Be sure to check with suppliers beforehand.

The major vendors in the VoIP space include 3Com, Avaya, Cisco, Linksys, Motorola and Nortel among many others. These companies need no introduction and your business would be well-served by any of them. To learn more about making the switch, visit IP Telephony.org.

Vin D'Amico is Founder and President of DAMICON, your ADJUNCT CIO™. He is an expert in leveraging open software to drive growth. DAMICON provides Freelance Technical Writing, IT Disaster Response Planning, and Network Security Management services to firms throughout New England.

This article appeared in Vin's monthly Virtual Business column for the IndUS Business Journal in June 2005.

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