Adding Carriers to the Mix


The U.S. Department of Veterans Affairs has embarked on an ambitious campaignto consolidate a hodgepodge of network equipment at 22 regions across thecountry.

As part of that effort, at least one regional unit has decided to replaceits existing phone system, or PBX, with devices that support voice overIP (VOIP) transmissions, which carry voice traffic on standard TCP/IP datanetworks.

"We view VOIP as a technology that has tremendous potential and thereforedid not want to install traditional voice systems that would be eclipsedin a few years," explained Howard Green, the chief information officer atVISN 15, where 2,500 employees serve 950,000 veterans in Arkansas, Illinois,Indiana and Kansas.

The decision puts the VA at the forefront of a movement that is expectedto radically change how organizations deploy and manage voice communications.Placing voice communications on corporate networks can lower telecommunicationscosts, ease management chores and spawn new multimedia services.

Even though vendors and service providers have been touting those benefitsfor four years, the number of agencies that have implemented VOIP is stillminuscule. "VOIP acceptance has been largely limited to the consumer market;it hasn't had much impact on business customers yet," said John Marcus,a senior analyst at Probe Research Inc.'s Dublin, Ireland, office.

There are several reasons why the technology, which can be implementedin various ways (see sidebar), has yet to find a home in the governmentmarket. The cost benefits haven't proved to be as significant as anticipated,the underlying equipment is still immature and VOIP services are not asrich those found on the Public Switched Telephone Network (PSTN).

Affordability and scalability



Initially, the hype about VOIP services focused on the potential costsavings. While long-distance carriers charge 10 cents or more for each minuteof service, VOIP services run on Internet connections, so pricing plummetsto three to five cents per minute — and is free for those customers withunlimited Internet access.

Pressured by competition, long-distance companies have dropped theirrates so they are in the five-cents-per-minute range, and business ratesare even lower. "Since FTS 2000 services cost about four cents per minute,there is no significant financial incentive for us to adopt VOIP," saidJim Dolezal, the chief of the telecommunications systems division at theU.S. Department of the Interior.

Another issue is that VOIP equipment is new, so there are questionsabout its ability to scale and support tens of thousands — or even millions— of users. "We've tested products from every vendor selling VOIP equipmentand determined that none yet offers a system able to support the volumeof traffic we envision flowing over our network," said David Boast, executivevice president of network engineering and optimization at Qwest Communicationsin Denver.

However, that may be about to change. In March, Cisco Systems Inc. introduceda new version of its call-processing software, CallManager 3.0, that thecompany claims can be configured into clusters of computers supporting upto 100,000 VOIP users.

Enhancing Call Quality



Call quality has also cast a large shadow over the VOIP market. Thesuppliers of PSTN central- office equipment have spent decades improvingtheir wares, and the result is that voice calls across their networks arealmost always crystal clear.

That has not been the case with VOIP services. "Early on, VOIP got abad name because a lot of the focus was on free calling, and the connections— especially the international ones — required a lot of adjusting by users,"noted Heidi Bersin, senior vice president of corporate marketing at ClarentCorp., a Redwood City, Calif., VOIP equipment supplier.

But now Internet service providers can enhance call quality by addingquality of service (QOS) capabilities to their networks. This feature ensuresbandwidth is available at every point on a network, so calls are static-free.

"For QOS to be effective, it has to be supported along each point ona network connection," noted Ed Wadbrock, the director of business strategiesat 3Com Corp.'s voice solutions group in Andover, Mass. Today's large, complexenterprise networks include a mix of old and new local-area networks, PBXs,customer premise equipment, VOIP switches and central-office equipment.To QOS-enable these networks requires a gargantuan upgrade to the vast numberof installed devices.

To compound the problem, there are two flavors of QOS: one from AsynchronousTransfer Mode technology and another out of TCP/IP. Although there has beendebate about which will end up being more widely deployed, the TCP/IP approach(IEEE 802.1P and 802.1Q standards) recently has gained the most interest.

Because government agencies find only pockets of QOS support, most canroll out VOIP among select groups of users rather than across their entireenterprise. For instance, at the VA's Naperville, Ill., medical clinic,a PBX that is at the end of its life cycle will be replaced with a VOIPswitch based on Cisco Systems' Architecture for Voice, Video and IntegratedData to support 100 users. In addition to the VOIP switch, the agency isupgrading its routers and buying special handsets to ensure end-to-end QOS.

At the Transportation Department in Washington, D.C., the move to anew headquarters building will enable the agency to deploy QOS throughoutthe building. "We see a number of potential advantages with VOIP: integrationof our voice and data networks, lower operating and management costs andbetter customer service since we will be able to talk with them via PCs,"said George Molaski, CIO at the agency.

Adding Carriers to the Mix



To date, VOIP services have been deployed on private networks wherean agency maintains all of the network equipment. But government organizationswould also like to take advantage of carrier services. For this to occur,carriers need to be able to move calls from the Internet to the PSTN.

This is challenging for a couple of reasons. The PSTN relies on SignalingSystem 7 to route calls and deliver enhanced services, such as call waiting,conference calling and voice messaging.

On the VOIP side, standards to support enhanced service are just emerging."In most cases, carriers are now offering just basic voice connections withno enhanced services," said Qwest's Boast. So customers are often forcedto live without voice mail and other common features. Even when a carriercan deliver enhanced services, it needs to pass those functions from theInternet to the PSTN, and standards to make such connections are in an earlystage of development.

Consequently, few carriers are offering VOIP services. The ones thatdo have an emphasis on the consumer market, such as Net2Phone Inc. of Hackensack,N.J., or they are new companies trying to wedge their way into a crowdedmarket, such as ipx Inc., Jersey City, N.J.; ITXC Corp., Princeton, N.J.;and PSINet Inc., Herndon, Va.

The many unanswered questions have not deterred vendors from developingVOIP equipment. Currently, VOIP products are available from more than 50suppliers, including just about every established vendor (Cisco, LucentTechnologies, Nortel Networks Inc., 3Com), as well as plenty of start-ups(Clarent, VocalTec Communications Ltd.).

This broad support underscores the optimism that the current hurdleswill soon be cleared. "Many of the features needed for VOIP to take offhave been falling into place, so I expect it to gain significantly moreacceptance during the year," said Tere Bracco, a principal analyst at themarket research firm Current Analysis Inc., Dallas, Texas.

Equipment vendors already report an increase in enterprises deployingVOIP equipment. "We have between 30 and 50 corporate users that are nowactively testing VOIP capabilities with plans of adding them to their networksduring the year," said Kevin Donovan, a product manager at Lucent.

Carriers also seem poised to launch VOIP services. "Although we havenot yet made definitive plans, I'm optimistic that we will be able to rollout services this year," said Qwest's Boast.

This first wave of users will be the early adopters — organizationstrying to use technology to gain a competitive edge. As the year closes,the technology is expected to make its way into the mainstream, so agencieslike the VA will become the norm rather than the exception.

-- Korzeniowski is a freelance writer in Sudbury, Mass., who specializes innetworking issues. He can be reached at Paul Korzeniowski.



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