***** Moderator's Note *****
> 1. The link points to a company that's doing VoIP via a SoftSwitch,
> and I think this combination of new technology and new business
> models deserves discussion.
The hosted PBX sounds like a promising niche. I'm a little skeptical of this as a substitute for POTS in the home.
2. AFAIK, only Cable-based service providers and a few CLEC's are
> using SoftSwitch, and I'm always fascinated by the ways that new
> technology can sideline an existing business model. The ILEC's are
> dependent on centralized technology - that's why it's called a
> "central" office - and VoIP eliminates the distance limits of
> copper which have dictated CO placement and provisioning for over
> 100 years. That means that mega-CO's are now possible, limited only
> by the bandwidth between them and their customers.
One has to have the network for VoIP to work. I happen to have a DSL only line at my house and no land line phone, but how common is that? What mechanism is envisaged for getting the network to the end user? This is why I think the hosted PBX has more promise than regular telephone service. Businesses are far more likely to need and have network already. This then becomes just an incremental cost. The typical home user would need to factor in the cost of network service also.
4. I'd like readers' opinions about what, exactly, this company is
> selling. Their web site promises switching and branding and
> support, so it's apparent they're offering to contract the
> "switching" part of a VoIP-based telco, but there's always the
> question of what an aspiring CLEC owner gives for what he gets.
For $200/year you get a web page with your chosen business name and you get to try to market their services. They handle billing and pay you a percentage.
I only briefly browsed their web page. They suggest you sell their service to family and friends, which sounds dangerously close to some "party plan" marketing schemes, and that you can compete with Skype, etc. I can see some interesting possibilities in the more commercial realm such as "phone home" shops and, again, the hosted PBX, but for selling to individuals not so much.
Bill Ranck Blacksburg, Va.
***** Moderator's Note *****
As I said, I'm fascinated by the way new business models can sideline existing ones: consider the way that stock exchanges will eventually be eliminated by computerized trading, or the way travel agencies are being replaced by online services, for example.
I ran the help desk at a tiny CLEC for a few months, and did installations and repairs for them too: if I had to name the one biggest obstacle to the company's growth, it would be the transit and on-site times involved with every dispatch. In order to install a service, I had to either retrofit existing wiring or run new cable, both time-consuming and error-prone tasks, especially in old buildings with "rat's nest" terminal boxes and even the ancient, brown inside wire that had three-wires-twisted-together (what was that stuff called, anyway?). Suffice to say that it's nearly impossible to make a profit doing that kind of work, even with minimum or low wage employees and an owner willing to work sixteen-hour days.
The difference here is that this provider has given its vendors a way to bypass all that expense, in effect externalizing it onto the customers, because they only offer to work with SIP-capable phones. That means that only businesses and homes with high-speed Internet access installed and working can subscribe in the first place, so there's no wiring effort worth mentioning and none of the associated problems such as access to wiring closets, etc.
Of course, this vendor is betting on early-adopters and pioneer-preference for its success: every entrepreneur who uses a new technology is bound by this truism. The question is, then, what edge the firm offers to a typical business or SOHO user, and there's the rub:
- Low rates only appeal to heavy users, but VoIP has a poor reputation for voice quality that a telephone-dependent business might shy away from.
- New telephone instruments are a capital expense that many businesses, especially small firms or SOHO customers, might hesitate to commit to.
- The vendor's switch may not be in the U.S., which means bandwidth issues and latency problems that will cause more cusotmer complaints and limit buy-in or word-of-mouth advertising.
- Billing and collections, especially across international borders, will be the biggest problem I foresee.
Suffice to say, that although this particular vendor may fail, the future of the "traditional" telephone network is open to question. I'm interested in this, and other readers' opinions about which direction the "new" network will take, and why.
Bill Horne Temporary Moderator