more on more on BT says no VOIP Blocking

[David Farber <dave () farber net>]

Begin forwarded message:

From: Bob Frankston <Bob2-0406 () bobf frankston com>
Date: October 31, 2004 2:34:39 PM EST
To: dave () farber net, 'Ip' <ip () v2 listbox com>
Cc: 'John Shoch' <shoch () alloyventures com>, "David P. Reed" 
<dpreed () reed com>
Subject: RE: [IP] more on BT says no VOIP Blocking

John, I sense some moral indignation here.

While I have seen business plans that do make naïve assumptions about 
P2P
and understand frustration with some of them, it's important to step 
back
recognize the fallacies in the current model of tele/communications. The
reverse is also true -- the absurd luxury of building a special
infrastructure to carry voice traffic over high-priced dedicated paths. 
No
wonder the CableCos and Telcos are going IP to reduce costs.

A voice stream seems to be a relatively small increment on a network 
that
delivers megabyte web pages and multi-megabit video streams. Charging 
for
VoIP itself makes no more sense than having usage sensitive charging 
for a
walkie-talkie (that term sure seems anachronistic).

As David and I have pointed out, QoS can be far more problematic than 
VoIP
itself. How do you composite a QoS path in a dynamic network across many
different segments? No wonder it's been less expensive to add capacity 
then
dole out scarcity.

Of course we must cover the costs of the infrastructure but the problem 
is
no VoIP, the problem is a business model that's based on a fictional
emulation of a 19th century model of communications.

We will be shifting to a local utility model and covering the cost of
carrying bits over a local infrastructure just as we do with roads and 
power
lines today. The question is the cost per gigabit of capacity, not the 
cost
of audio bits vs video bits.

Highlighting a single minor application like VoIP is only a diversion. 
It's
more useful to focus attention on an outdated billing system that is the
dominant cost of providing voice services.

While you can argue nothing is free, it's also possible to take 
something
that doesn't exist -- like voice telephony as a service -- and create a
billable entity. We do the same when we apply a Fourier Transform to
electromagnetic radiation and then create charges or when we use the 
words
"Intellectual Property" as if it were just like real estate.

The mapping of cost to price is not at all trivial. Even if nothing is 
free
you can make it prohibitively expensive with the wrong marketplace 
model.

http://www.frankston.com/?name=AmbientOpportunity


-----Original Message-----
From: owner-ip () v2 listbox com [mailto:owner-ip () v2 listbox com] On 
Behalf Of
David Farber
Sent: Sunday, October 31, 2004 04:27
To: Ip
Subject: [IP] more on BT says no VOIP Blocking



Begin forwarded message:

From: John Shoch <shoch () alloyventures com>
Date: October 30, 2004 7:06:28 PM EDT
To: dave () farber net
Cc: John Shoch <shoch () alloyventures com>
Subject: RE: [IP] BT says no VOIP Blocking

Dave,

Well, once again "there ain't no such thing as a free lunch."

Anyone who thinks they can get "free" telephony (or video or P2P) over
the internet will be in for a rude awakening.
The ISP "all you can eat" end-user pricing models are, of course, based
on some set of assumptions about typical usage.
If you add significant VoIP/video/P2P the model gets broken -- either
quality levels go down, or the ISPs go broke adding more equipment.
Rather than get crushed under a flood of P2P packets, ISPs will
eventually have to raise prices or protect themselves (P-Cube,
www.caspiannetworks.com, etc.).

QOS is not necessarily meant to cut back any class of traffic;  but QOS
does ALLOW systems to prioritize traffic, and develop appropriate
pricing models.  In the future, we should expect that ISPs will offer
higher levels of QOS tied to higher charges.  You will be able to pay
for high-quality VoIP or video, if that's important to you.  (Remember
why student standby tickets used to be so cheap -- you could get
delayed!)

Remember, anyone who expects a free lunch usually gets a pretty crummy
lunch.

John Shoch
Alloy Ventures

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