Viodi View Menu

Interested in Sponsoring the Viodi View? Send an email to: sponsor@viodi.com

Please forward this free publication to anyone you know who is involved in some way with independent telephone companies.

Mission of the Viodi View:

In this on-line publication, we share our analysis, opinions and direction on the interactive television news and views that we believe will be of interest and use to our friends associated directly or indirectly with independent telephone companies. For more information as to the various ways Viodi works with independent telephone companies, please go to http://www.viodi.com/alliance/

Disclaimer:

The Viodi View [Viodi, LLC] and its associates used their best efforts in collecting and preparing the information published herein. However, the Viodi View [Viodi, LLC] does not assume, and hereby disclaims, any and all liability for any loss or damage caused by errors or omissions, whether such errors or omissions resulted from negligence, accident, or other causes.

All displayed trademarks, logos and service marks are the property of their respective owners. © 2004 Viodi, LLC. All Rights Reserved.
5255 Stevens Creek, #127 Santa Clara, CA 95051

Viodi View Newsletter - February 2nd, 2005 Issue

Indie Telco Local Content Workshop Advertisement

John Dillard's Speech on VoIP Given at Bobcomm

By John Dillard, Monroe Telephone

[Editor's Note: The following is the speech that John Dillard gave at Mid-States Consultants' Bobcomm and is published courtesy of Mr. Dillard. Thanks John for sharing your sage commentary]

My talk deals with pure Internet Protocol telephony. We need to look
harder at our costs. I am not comfortable with our presumed strength
in Congress. Representative Barton, the chair of the House Commerce
Committee was recently quoted as telling NTCA that their member companies need, "to get out of your box" in regard to Universal Service Fund Support. This is from the man who basically controls telecommunications legislation in the House. That is bothersome to me.

The strong message of Internet Protocol telephony is you no longer need
line interfaces as part of the switch. We handle our Plain Old Telephone Service through a Calix C7 Digital Loop Concentrator as a loop interface. In a broad sense, we no longer deploy lines but rather deploy services over loops. Dial tone service from the SysMaster is supplied to the end user via the Calix digital loop concentrator.

I hope these comments are helpful to you. The units I have deployed are the SysMaster GateKeeper and SysMaster Gateway, two cards that contain the Class 5 switch functionality. The comment from Rep. Barton was in Tuesday's Wall Street Journal.

Also, I try to stay away from acronyms when I speak or write. I believe this adds clarity to the thoughts expressed. I kind of feel that acronyms are a sign of mental laziness.

This time last year, I thought softswitch and Voice over Internet Protocol technologies were not in the immediate future for Monroe Telephone. I was aware of Vonage*s offerings and had looked over their materials on their website. One of my customers had told me he was using Skype to handle international conference calls. Overall though, I could not see any benefit for Monroe customers.

What happened then to change my point of view on softswitches? There were several items and trends that forced me to reconsider my point of view. The first item that caught my attention came from a visit of a switch supplier. This particular switch has no line cards. Everything was processed through GR303 connection to Digital Loop Concentrators. Another switch supplier pointed out that with an Internet Protocol backplane that the switch could be bifurcated to offer pure Voice over Internet Protocol via Digital Subscriber Lines or Plain Old Telephone Service via GR303. These concepts knock the stuffings out of switch design as we have known it.

What I will call a Pure Softswitch gets rid of a lot of hardware. What takes today about 720 cubic feet shrinks down to 8 cubic feet. For the 720 cubic feet, I assume 3 foot wide, 30 foot long and 8 foot high. This allows for the required work room also. The eight cubic feet is 2 by 2 by 2. Granted some current switches are smaller than the 720 cubic feet but from what I have seen, I believe it is a good average. But a single chassis that can support several thousand end users in eight cubic feet is a significant savings in space.

Granted there as space requirements for the field electronics to provide Digital Subscriber Lines and Digital Loop Concentrators, but the majority of that equipment will move out of the Central Switch space. There will be more space dedicated to Internet routers and servers and to transmission electronics in that central space than to the switching medium. This is revolutionary in respect to space, power and air conditioning requirements. We may actually find ourselves having heaters in our equipment rooms.

The next item that was brought to my attention was through comments made at several USTA ad hoc committee meetings concerning various Inter Carrier Compensation plans being brought before the Federal Communications Commission. That topic is one that gets to my pocketbook very fast. Verizon was speaking to the toll carrier of last resort concept. They kept asserting there is now and will be more low cost termination available to all providers of telecommunications services. After they said this for the umpteenth time, it started to penetrate the various remote premises of my thought processes.

I started to check around. Yes, there are low cost termination providers out there looking for customers. Many of them do want a minimum of minutes guaranteed each month, or they want some initial up front money. But, if you are generating 500,000 minutes of use per month from your customers, you can get domestic termination at a penny and half per minute. Your additional costs are for the pipe to the aggregator. I am currently using one of my dedicated internet pipes to move traffic. I recognize that in the long run I will have to connect over a dedicated pipe. The aggregators usually have access to more than one termination provider. That will allow you to set up least cost and time of day routing in the softswitch; more savings to the cost of delivering traffic.

As some people like to say, let’s go to the calculator for a few raw costs. Let’s assume termination for 500,000 minutes at $0.015. Let’s assume our T span to the neighboring tandem community costs $1100 per month. Divide by the 500,000 minutes and we add $0.0022 to each minute of use. This gets our raw cost up to $0.0172 per minute. Yes, there are other costs in there but we have two major elements pegged at least at less than two cents. Vonage charges five cents for each minute they charge.
I realize that I am being an outlaw in the access regime. We do need to realize that today’s method of cost settlements is badly damaged by the multiplicity of regulatory schemes for the different providers. I also recognize that this gathering is mainly aimed at engineering types.

That said, if we don’t start paying attention to the pennies, the dollars will bankrupt us. This is not the world of telephony we grew up in and it is not our father’s world either. We can no longer design and engineer to NECA/FCC separations requirements. The FCC is talking about changes to the Inter Carrier Compensation scheme this year. I don’t know what they will come up with but I have faith it will not be good for me or my customers.

We are going to have to pay tighter attention to our costs and the prices we can charge. It is not that we are competing with wireless or Vonage. Many cable providers will be going into the Voice over Internet Protocol provision of telephone services. Today, each of those four providers operate under a different regulatory scheme. It does us no good to whine or snivel about that. It is a fact of life we must live with until it changes. We may find it necessary to cannibalize ourselves to survive in the near term future.

Another of the elements that drove my thinking was both economic and technical in nature. The softswitch being highly software driven incorporates vertical services onto the switch including voicemail services. This is done at a much cheaper cost than what we pay in the legacy switch market. Can we avoid expensive upgrades to our legacy switches and associated equipment by converting to a softswitch? We all are spending significant amounts of money each year to keep our operating systems current with system and legal requirements. Will a softswitch that is more narrowly focused give us an opportunity to reduce our costs? My opinion is that they will.

A technical issue brought home to me by a manufacturer moved me into the softswitch camp. He pointed out that several manufacturers are deploying Voice over Internet Protocol as the operating software for their legacy switch. The equipment footprint stays the same. The user interface to the switch changes some but the work load and the board and card design stays pretty much the same. I was talking with a manufacturer of Digital loop equipment about a test that they had run with one of the big legacy switch manufacturers Voice over Internet Switch product. He commented it looked just like the legacy switch. The cost for the new switch stayed pretty much the same as a legacy switch.

This brings me back to my earlier comment about eight cubic feet versus 720 cubic feet. The new world being forced on us doesn’t care about a switch maker wanting to save research and development money by reusing old designs and old cards. This world wants a switch that can fit in a broom closet.

The entry methods into the softswitch drove me nuts. They use GR303 and direct internet. A T-span is no longer 24 circuits, it is more than 24 transactions unless a lot of bandwidth is needed. Normal conversations though allow forty or more packetized conversations at any one time. While I was getting this drummed into my head, I felt like I was in the middle of the Abbott and Costello baseball routine. I was the clueless one.

This past June, I went to Emeryville to meet with SysMaster. They had developed a Class 5 office they are interested in selling. They come from the Class 4, prepaid calling card switching world. They had developed PBX connectivity for the product and want to move into our world. They are interested in becoming accepted by Rural Utility Services as a switch. We went over what they had, what I wanted and I asked them to put together what they thought I would need at a minimum to have a viable Class 5 switch.

They put a quote together and we went over it line item by line item to establish it was what we would need. We nailed down a price and I got a lease put together to buy it. I was able to get only a 48 month lease because so much of the product is software not hardware.

The product will handle 500 simultaneous transactions, more than what most of our end offices run at any given time. It is on two blades; a Gatekeeper blade and a Gateway blade with software resident on both blades. It has both CALEA and LNP functions embedded. The vertical services including voicemail are also available.

It also has E 9-1-1 which can be seamless over the GR303 connectivity. E9-1-1 over the true Voice over Internet Protocol requires more to handle it. Either the internet location is machine identified or the end user has to set his address in for it to function. The bad thing is that this service is portable worldwide. Any hotel that I go to that has high speed internet allows me to set up and make local calls in Monroe and long distance calls out of Monroe. The phone also rings just as if I am in Monroe. That portability creates a problem that has not been answered yet.

The system in the GR303 world is so transparent as to be almost unbelievable. I have a two line phone on my home office desk. One line is Voice over Internet Protocol, the other fed by my legacy switch. You can not tell which one is which. That is what we want.

Our installation has not been problem free. One item they forgot to turn on was the part of the switch that enabled local calling. Also, this is SysMaster’s first venture into the pure Class 5 world. So there has been a fair amount of learning experience for both of us. Brian Greene has been working with the switch so I will start tossing some questions at him, then we will let you take your shots at us.

[Editor's Note: At this point, the presentation turned into an excellent question and answer session describing their deployment of VoIP.]

Viodi View Subscribe

Privacy Policy

Telco Video 101