Here's another cool term to add to your toolkit of high-tech lingo. Its VoIP, or Voice-over-Internet Protocol, and its now one of the most talked about items among Web professionals. Considered the next big break-through in the telecommunications industry, VoIP has the potential to revolutionize the way we live, work, and play.

Technology
This technology emerged as a result of the availability of 'always on' networking through high bandwidth cable and DSL modems. With these so-called 'fat pipes' reaching into homes and offices, telephone conversations can be converted into Internet packets of data able to enter and leave sites in large bundles, travel virtually around the world, and cost significantly less than traditional long distance phone calls. Internet host providers will soon make additional services available. These include call forwarding to any VoIP device in the world and unified messaging, where users can call in and have email read or transcribed using voice recognition. To get started, subscribers need only have an Internet-linked PC equipped with speakers, a microphone or a headset. Connections can also be made from various endpoint devices such as phone-to-PC, PC-to-phone, or via integrated access devices (IAD).

Let's take a closer look. Standard homes are typically equipped with a limit of two wire pairs of telephone lines from the utility pole. If the homeowner would like to have an additional phone line, the phone company usually charges him/her for its installation. By comparison, in a Small office/Home office (SoHo) setting, users tend to require additional lines for fax machines and extra phones. The need to accommodate these extra lines can be easily met through VoIP and the use of a gateway device that can support between 4 to 24 phone lines via DSL, cable, or ISDN. Interestingly enough, service providers optimize customer penetration with broader service offerings, maximize revenue per customer, and minimize network deployment and service provisioning costs by selling access to these features through packages, and charging fees based on usage.

How does this all work, you ask? Quite simply, voice is encoded and placed into packets. The packets are then put on a network via a gateway, travel through the network to a destination gateway, are decoded, and then heard as voice by the end user. A phone connected to a gateway establishes a connection with a Call Agent, a call-controller, which acts to synchronize its activities with another Call Agent at the destination end of the phone call, as shown in Figure 1.

An Internet host provider, through a cable modem connection package, usually offers this service. Alternately, the call can also originate directly from a computer to a Call Agent as illustrated in Figure 2. Connections with DSL operate by the same principle but require a digital subscriber line access multiplexer (DSLAM) rather than a Call Agent. The DSLAM interconnects multiple DSL users and sends data packets to the Internet service provider (ISP).

In terms of links, connections are made endpoint-to-endpoint. The Call Agents instruct gateways to create connections between endpoints, be they analog plain old telephone system (POTS) connections to a phone, a private branch exchange (PBX), or a computer. Moreover, the gateway will detect certain events such as off-hood ringing, call waiting and in-coming call identification.

Endpoint names identify the location of the call and are structured much like email addresses. They have two components: a domain name of the gateway managing an endpoint, and a local endpoint within that gateway. For example, an endpoint address uses the following format: local-endpoint-name@domain-name. For gateways that provide multiple POTS connections, each additional connection is identified by the following notation: mygateway/sales@mycompany.com or yourgateway/reception@yourhome.com .

Market

By 2005, Probe Research predicts that total long-distance usage by non-private networks will reach 400,000 voice-over-packet minutes worldwide. Meanwhile, IDC states that revenue from VoIP technology services has already reached $480 million in 1999 and estimates a compound annual growth rate of 108 percent and revenues of $19 billion over the next four years. Similarly, Frost and Sullivan forecast the market for this technology to soar to $91 billion by 2006.

According to IDC, IP telephony will be a venue largely used by carriers and ISPs to provide international long-distance services at reduced costs. As a result, prices for IP telephony services will likely be very reasonable so as to compete with the "pennies-a-minute charge" consumers currently enjoy over public switched telephone networks (PSTN). Enhanced VoIP services, such as customer support and sales assistance for retail web sites, are expected to follow suit after 2001.

Challenges
One of the main factors presently prompting this market to flourish is the availability of true carrier-grade VoIP gateways having low down time and high volume capabilities (high port density). However, without a reliable data path from source to destination to minimize delays, the technology will not be acceptable to consumers. This will continue to be the challenge for manufacturers of residential gateways and Internet backbone services in the future, particularly as data demands become increasingly more complex. While packet delays are now commonplace, specifically during file transfers and streaming video, they are largely indiscernible to users. However, in future, as data demands rise and packet traffic increases, problems will likely occur if the total round trip delay for a full end-to-end IP telephony system exceeds 300 milliseconds. At this point, echoes and disjointed conversations would likely cause users to switch back to conventional line systems.

Power outages pose an additional challenge. Presently phone line communications are maintained in the event of power outages. No one ever doubts the presence of a dial tone during this time. Therefore, gateways and Internet service providers will have to maintain power to VoIP services during such times to preserve consumer peace of mind.

Once the consumer is comfortable with conversations over the Internet, additional services such as fax and data-modem signals that are currently available on the public system telephone network (PSTN) will need to be supported. Currently, the use of fax relay techniques is optional in voice-over-cable trials, but the use of fax relay offers bandwidth reduction and a more robust, reliable means of connecting fax-over-IP calls and is therefore highly recommended. Finally, the provision for hearing-impaired services, in compliance with the ITU V.18 recommendation also needs to be addressed.

Standards
On the standards side, the jury is still out. The United States cable industry standard is in flux. Its current standard known as, the Data over Cable Service Interface Specification (Docsis) Version 1.0 is evolving to Docsis 1.1 over the next 6 to 12 months. Meanwhile, in Europe, there is no comprehensive and widely endorsed cable industry standard. However, both digital video broadcast (DVB) and EuroDocsis are well-established alternatives in this market. As for DSL, there are some groups who would like to blend the benefits of all DSL variations into one standard.

Overall, while VoIP's future looks bright, access to this technology will be limited at least initially because high-speed connections through cable and DSL modems are not widely available across North America. This lack of availability will be the next hurdle for wide acceptance of VoIP. The junction of the "last mile", that magical connection point of the wide bandwidth service, is continually approaching more homeowners each day as service providers extend their infrastructure. This expansion will no doubt cost money, but the future revenue of VoIP packets will bring potential rewards for the companies that invest in this groundwork activity.

Steven Totolo is president of tvcAutomation, a home automation specialist and a member of the CABA Standards Committee. He can be reached at (613) 795-7117; fax (613) 737-5323; email: sales@tvcAutomation.com