VoIP: Status And Industry Recommendations

I. Introduction

A broad range of services, including voice, video, and data, can be enabled to ride on Internet Protocol ("IP") networks. These digital networks require less financial investment, are cheaper to build and operate than traditional circuit-switched networks, and are better suited to provide a range of improved, innovative, and economic service offerings to users of all kinds.

There are many benefits to IP networks, and, in particular one of its applications-Voice over IP (VoIP). First, IP networks are cheaper to deploy. One key benefit that is driving widespread adoption is the tremendous cost savings realized by these networks, which may use both wireline and wireless infrastructure. Second, because of the architecture of IP networks, digital packets of information move in an efficient manner (as opposed to in the end-to-end circuit model), more effectively utilizing the capacity of the network. Third, the multifunctional nature of IP networks allows the cost of the network to be spread more widely since the same network is used to provide all kinds of services (voice, video, data, etc.). Providers of networks and businesses who are adopting IP are already realizing these savings and efficiencies.

IP networks and the applications that run on them provide more choices to users. For example, purchasers of VoIP service may be able to choose to receive their messages in written or voice form, or use their phone number even when they are traveling. VoIP is just one application on an IP network that can support many different applications. Because a company can offer VoIP services without owning its own network, there are fewer barriers to competitive entry, enabling a multitude of competitors to offer consumers more choice and lower prices, and even integrate aspects of video and data services that ride on the same network, to create exciting new products.

Given all of the economic and consumer advantages that VoIP and other IP-enabled services offer, a country will be at a disadvantage if it does not embrace VoIP. Countries that require all voice traffic to be carried over circuit-switched networks and delay adoption of IP networks are committing their future to networks that are becoming obsolete and dooming their country to incur greater expenses for fewer capabilities than other countries. Countries that follow this course will increasingly fall behind, depriving their citizens and businesses of the opportunity to share the benefits of rapid innovation, more competition and lower prices. Indeed, IP networks are already in wide use for the carriage of international traffic, including voice.

Countries are finding ways to embrace the opportunities that VoIP and other IP-enabled technologies provide. Many countries are trying to create a flexible regulatory environment that facilitates investment, competition, innovation and the deployment of IP networks and applications like VoIP. A few others are moving in a different direction, paying less attention to the tremendous benefits, opportunities and savings from this technology and more attention to how to ensure that VoIP calls do not undermine revenue from high international charges, which is harder to do over IP networks because of their architecture.

II. The Shift to IP In Networks

The shift to IP-enabled services represents the most fundamental shift in communications networks in recent years. Today, IP is driving the same kind of revolution in voice and other applications that IP provided in the data-networking world thirty-five years ago. This revolution in technology is enabling new kinds of Internet services, including VoIP.

VoIP is delivered as an application. Many of the VoIP service providers today are providing only the application, while an entirely different provider may provide the infrastructure. IP enables this separation of infrastructure and application.

The history of VoIP usage began with early conversations over the Internet by some computer users. In its early stages, VoIP required a headset plugged into users' computer systems, and users could only communicate with others with a similar set up, whom they phoned ahead or sent a text message to, alerting them to the upcoming voice exchange at a particular time. The various ways IP have been used to support voice communications have changed rapidly over the last few years.

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