Services over Internet Protocol: Voice is just the beginning...

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  • 1. Services over Internet Protocol: Voice is just the beginning… Marilyn Cade. Director IP Networking, Internet and E-Commerce AT&T and Chair, Positively Broadband Campaign
  • 2. Topics: Services Over IP: VoIP is Just the Beginning • Top Ten Technology Trends • The Rise of IP Communications • VoIP: Voice is Just the Beginning – A family of services that are just beginning – New Thinking Needed on Models of Governance – Revolutionary for Consumers – Evolutionary for Enterprises – A driver for Broadband for Consumers/Productivity and Cost savings to Enterprises, and Network Investment by Services Providers • VoIP: Many Challenges: We Can’t Take VoIP’s Success for Granted. • What Industry can do to ensure VoIP’s Success Copyright 2004 AT&T 2
  • 3. Top Ten Technology Trends 1. IP Will Eat Everything! 2. Broadband Will Be Common 3. Wireless Internet Will Be Big – Driving Mobility 4. Sensor Networks Will Be Everywhere 5. Convergence of Communications & Computers Will Become a Reality 6. Death of Locality 7. Security Is Critical 8. NexGen Distributed Computing Is Growing 9. Home LANs Will Proliferate 10. Data Mining Information Mining Copyright 2004 AT&T 3
  • 4. IP Will Eat Everything
  • 5. The Communications Industry is Undergoing Massive Transformation to One MPLS/IP Network From: To: Legacy Networks Common IP/MPLS Backbone Voice Network 4ESS 5ESS The Internet 5ESS Frame/ATM/Voice/IP-VPN Frame/ATM Route Servers Route Servers BX9000 BX9000 BX9000 Private Line MSE Network Global IP MPLS Core Network MSE Frame/ATM/Voice/IP-VPN IP Backbone MPLS: MultiProtocol Label Switching Copyright 2004 AT&T 5
  • 6. IP is the the Bridge to the Future Teleworker Wireless Internet Private Corporate Public Voice Corporate Networks Intranet Extranet Networks (WAN/VPN) (PSTN) •Scalable •Secure •Ubiquitous •High Performance •Variable •Predictable Performance •Reliable •Seamless •Non-Regulated Supplier •Flexible •Regulated LAN ISP Supplier Supplier Teleworker Customer Copyright 2004 AT&T 6
  • 7. IP Enables the Next Generation of Applications COMMUNICATION LAYERS Content Layer Open standard data (movies, books, papers, networks, such as IP, information, etc.) operate in layers that allow applications to be Application Layer separated from the (voice, video, web, chat, infrastructure e-mail, etc.) – Enables multiple players to enter the market at different Logical Layer layers and compete, (IP addressing, wireless stimulating innovation handoffs, etc. – The type of the network (electric, co-axial, Physical Layer copper, wireless, fiber) (electric, co-axial, copper, no longer dictates the wireless, fiber) application or services Concept compliments of Kevin Werbach Copyright 2004 AT&T 7
  • 8. IP Makes the Vision of Any Device to Any Device over Any Network Possible Cordless Telephone Phone VoIP Laptop 3G Router Cell Cable phone LAN Phone Modem Connection Line VoIP Gateway Wifi IP Phone PDA DSL Modem Internet/IP Networks (178,000+ networks) WiFi Access Point DSL ISP Line Gateway PBX Gateway Cable Modem Phone Desktop Line iPBX IP Softphone Telephone (Gateway) VoIP IP Phone Custom Dialer PBX Telephone Copyright 2004 AT&T 8
  • 9. VoIP
  • 10. VoIP Technology Will Challenge Traditional Assumptions and Traditional Regulatory Models • “VoIP” is more than “Voice” – The Voice/ Data dichotomy is eroding rapidly – VoIP is not simple voice, but rather a converged multimedia application that supports voice, data and video • Innovation and investment by fixed and wireless operators in IP networks will have an economic impact • IP communications have the potential to disrupt the status quo in service provider environment, elevating applications • Revolutionary opportunity for consumers; evolutionary for businesses • VoIP development and regulation should follow a cellular model rather than a traditional fixed voice model – services will improve over time, not overnight, to meet customer demand Copyright 2004 AT&T 10
  • 11. The Eras of VoIP Emerging Applications Convergence & Consolidation Arbitrage Copyright 2004 AT&T 11
  • 12. IP Enabled Voice Services – The Early Days NCP NCP ADJ Edge-to-Edge Circuit PBX Local Edge Switch Edge Switch Local Network Upchain ADJ LEC 4ESS 4ESS Int’l PSTN Real Time Network Routing Carrier CCE Int’l NGBE NGBE Carrier IP/Internet Core PNBE NGBE Local CLEC/ILEC Customer Router/Gateway Definitions PBX • BE – Border Element • CCE – Call Control Element • ING – Integrated Network Gateway Advanced Voice Features Across TDM • NCP – Network Control Point VoIP transport with hop-on/hop-off • NGBE – Network Gateway Border Element • PNBE – Peer Network Border Copyright 2004 AT&T Element 12
  • 13. IP Enabled Voice Services – Today’s Build-out IP Residence EVPN ℡ IP PBX CPE DSL Wholesale Cable IP - Applications Customer Etc. App Local CCE Carrier BE App Srvr Srvr App Int’l PNBE Srvr Media Srvr Carrier NGBE PNBE IP/MPLS/ SI P S IP NGBE Internet Core LEC ES-ING ES-ING IP-Enabled Edge Local ING IP-Enabled Edge LEC - TDM PBX - TDM IP-Enabled Local Network LEC Definitions •BE – Border Element •CCE – Call Control Element Interconnect local, toll & international switches with IP. •ING – Integrated Network Gateway Replace Adjuncts with Media Servers to reduce capex. •NGBE – Network Gateway Border Element Interconnect private VPNs with public VoIP services. •PNBE – Peer Network Border Element •BS - Business Copyright 2004 AT&T 13
  • 14. IP Changes Investment – New Investment Essential to Enable Real time IP Applications Data/Communication Networks Worldwide Equipment Investment Estimate $70 CORE Carrier and Enterprise Backbones $60 (DWDM, Routers, $50 Switches - optical, WAN, Billions of & converged) Dollars of $40 ACCESS (CPE, Equipment $30 Concentrators, DWDM Metro, Firewall, VPN, Expenditure Wireless LAN, Ethernet $20 Switches) $10 END POINT Enterprise CPE (IP PBXs & phones) $0 ) ) ) ) ) 02 (E (E (E (E (E 20 03 04 05 06 07 20 20 20 20 20 Source: Based on data from Prudential Securities Note: Software, network integration, consulting and product support expenditures are expected to match and eventually surpass total equipment expenditures per year. Copyright 2004 AT&T 14
  • 15. Voice Becomes Another Data Application On an IP Network IP/Internet Applications Domain Internet Protocol (IP) separates Voice Video Name Service WWW Application Layer Application Layer applications from the network: E-mail – Voice is not longer Enhanced/ restricted to telephone Information networks Services SMTP – Voice becomes another IP data application SIP.. H.323.. POP3.. DNS.. HTTP Logical Layer Logical Layer TCP…UDP...RTP… IP (Internet Protocol) Physical Layer Physical Layer Circuit Switched Voice Packet Routed Data Traditional Telecom Services Satellite, Wireless, Cable, Public Phone Network Phone, Electric Networks Copyright 2004 AT&T 15
  • 16. New Models of Governance Needed Current Norm “Stovepipe” regulation by Computing industry and sectors Telecom Media but INTERNET PROTOCOL changes everything DEVICES • Vertical convergence • Horizontal convergence New Questions: CONTENT • Jurisdiction • Accountability APPLICATIONS • Liability • Industry/Gov’t Cooperation NETWORKS Copyright 2004 AT&T 16
  • 17. Definitions • Internet Telephony: “In the beginning, Internet telephony simply meant the technology and techniques to let you make voice phone calls – local, long distance, and international – over the Internet using your PC…the definition of Internet telephony is broadening day by day to include all forms of media (voice, video, image), and all forms of messaging and all variations of speed from real-time to time-delayed.” • IP Telephony: (As defined by Microsoft) “IP Telephony is an emerging set of technologies that enables voice, data, and video collaboration over existing IP-based LANs, WANs and the Internet. Specifically, IP Telephony uses open IETF and ITU standards to move multimedia traffic over any network that uses IP (the Internet Protocol).” • Voice over IP (VoIP): “The technology used to transmit voice conversations over a data network using the Internet Protocol. Such data network may be the Internet or a corporate Intranet, or managed networks typically used by long and local service traditional providers and ISPs that use VoIP.” Source: Newton’s Telecom Dictionary, 18th edition Copyright 2004 AT&T 17
  • 18. VoIP: An information service that delivers voice communications and enables voice convergence with other data applications and devices. WHAT THE FUTURE HOLDS: • Presence (Instant Messenger, Follow me) • One Number / “Follow Me” Services • IP Call Centers • Universal Messaging • Virtual Meetings / Collaboration (like NetMeeting) • Real time language translation • IP Centrex • Multi-Point Videoconferencing • Desktop Multimedia • Push to Talk Cellular • Voice Chat Copyright 2004 AT&T 18
  • 19. The Evolution of Residential VoIP Computer 2004 WWW Broad- Broad- Telephone band band VoIP DSL or Cable PSTN Gateway Modem Computer Broad- Broad- WWW band band DSL or Cable Modem Telephone Phone PSTN Line Telephone WWW Phone Line PSTN Computer 14.4 – 56k Modem Telephone Phone PSTN 1992 Line Copyright AT&TAT&T Copyright 2004 2003 19
  • 20. Snapshot: U.S. Domestic VOIP Market Just Beginning Subs (M) Domstic IP Adoption 2004 Snapshot 2004 Snapshot 10.0 U.S. POTS Lines ~ 100M 2nd line penetration is 18% 8.0 Goldman Sachs Only 25M homes have a high In-Stat/MDR speed internet connection 6.0 Morgan Stanley 40 M households don’t have a 4.0 PC Traditional phone service has 2.0 168 M lines; wireless 170 M numbers 0.0 2003 2004 2005 2006 2007 2008 # of Domestic VOIP players still emerging Cable: Cablevision, Cox, Time Warner Domestic IP Telephony Subscribers (in millions) ISP: Earthlink, Yahoo BB LEC/IXC: Qwest, AT&T Virtual: Vonage, Voiceglo, Voicepulse, 2003 2004 2005 2006 2007 2008 !connecthere, Packet8 Goldman Sachs 0.1 0.9 2.2 3.8 5.7 7.7 PC: Net2Phone, Free World Dialup Morgan Stanley 0.1 0.8 1.4 1.9 2.1 2.5 In-Stat/MDR * 1.3 1.7 2.2 3.2 5.2 7.2 * includes PC-to-Phone Copyright 2004 AT&T 20
  • 21. Emerging VoIP Revenues (hardware and services) are also Dwarfed by Global Voice Revenues • Global voice telecom revenues and network usage continue to grow driven by technology options • Communications is cumulative • Applications are shifting from wireline voice to a mix of voice, mobile, e-mail, chat and instant messaging 1200 1100 1000 REVENUE (Billions of Dollars) 900 800 700 Voice Telecom Services were $856 600 Billion in 2000; expected to reach $1.4 6 500 Trillion by 2005 – compared to less than REVENUE (Billions of Dollars 5 400 $7 Billion for VoIP revenues by 2005 4 300 200 3 100 2 0 1 0 2000 2001 2002 2003 2004 2005 2006 2002 2003 2004 2005 2006 VoIP Technology (Equipment) VoIP Service Provider (ISP) VoIP Technology (Equipment) VoIP Wholesale (Network) VoIP Service Provider (ISP) Sources: RADICATI Group, Inc., Voice Over IP Market Trends 2002- VoIP Wholesale (Network) 2006, IDC, Worldwide Telecommunications Services Revenue Forecast and Analysis, 2000-2005 Worldwide Voice Telecom Copyright 2004 AT&T Svcs. 21
  • 22. VoIP’s Challenges: Operational, Standards, Policy/Regulatory
  • 23. Who Should Set Policy for Global IP Networks and VoIP? • ITU? • WTO? •National • WIPO? • FCC? Parliaments/ • IETF? • FTC? Governments/ • ETSI? •Congress? •State Courts? Legislatures? •European Union? •APEC? •National Parliaments? •National Parliaments? Copyright 2004 AT&T 23
  • 24. International VoIP Policy Activity • ITU Survey on Implementation of IP • More Recent Proceedings Considering VoIP Telephony in Developing Countries: / VoB Regulatory Framework Countries vary in their treatment re – US, UK, EC, Canada, Germany regulation: • Anticipated Proceedings: – Include VoIP/all forms in regulatory – Hong Kong, India, Australia, system Singapore, Sweden – Prohibit implementation - • Issues Arising in Proceedings and Not planning to regulate Discussions with Policy Makers – Different issues emphasized outside – Some have not yet addresses these US issues – US focusing on “regulatory – 35 respondents to ITU survey: Only framework” primarily as it impacts Spain, Sudan, Singapore, Lituania, legacy inter-carrier compensation and Denmark said : should not be USO considerations regulated. – Outside US, focus on “regulatory • OECD Report: framework” in light of specific rights and obligations that impact customer demand, economic development, and public safety (e.g numbering resources, entry barriers, law enforcement assistance) • Multilateral Interests : ITU and OECD Copyright 2004 AT&T 24
  • 25. International VoIP: Where it’s Growing • Japan • Turkey • Korea • Senegal • China • Nigeria • Philippines • Kenya • India • Mexico • Hong Kong • Colombia • Poland • Brazil • Russia • Peru • Bulgaria • Ukraine Copyright 2004 AT&T 25
  • 26. VoIP’s General Challenges: Much Work to do to Compete with PSTN and Develop Right Regulatory Environment OPERATIONAL POLICY • Physical and logical interconnection • Regulatory classification • Infrastructure availability • Licensing restrictions • Infrastructure affordability • Number Resource Allocation • Quality of service • Interconnection Charges • Security • Law Enforcement Assistance • Billing • Access to Emergency Services • Customer care • Emergency Service • Fulfillment and device support • QoS/Power Supply • Coexistence with legacy equipment • Tariff/Price Controls and networks increasing architectural • Universal Service complexity Copyright 2004 AT&T 26
  • 27. What WITSA Might Do to Ensure VoIP’s Success • Backgrounder Paper helps to frame VoIP’s story • Education and Briefings essential for policy makers across range of governmental agencies, NOT just regulatory agencies • Be aware that legislation is underway in many countries and may limit who and how VoIP can be provided; work with others to influence legislation. • Sometimes telecom legislation included VoIP; be aware that incumbents often seek to prevent anyone else from providing VoIP • Business Associations and allies, such as ISP Associations, others could join together to “tell VoIP’s story”, of economic investment, productivity, new consumer services, etc. • A “picture” is worth a thousand words approach: work with equipment providers, or VoIP Services providers to show the technology and tell the policy story at the same time Copyright 2004 AT&T 27
  • 28. Questions and Discussion Marilyn Cade 202-360-1196