FWDLabs

Can VoIP survive without the telephone network?

Free World Dialup's move to paid membership and decision to avoid dependence on the telephone network left some people wondering whether we were foresaking oxygen in the air we breathe. The reaction illustrates the reason for the move, in that more than a decade into the "revolution", VoIP remains little more than an access mechanism for the telephone network. Some VoIP applications do not bother with revenue, but, otherwise, they all pursue a revenue model based on charging for access to the telephone network. The question remains whether VoIP can survive without the telephone network.

The possibility of non-telephone network applications seems most likely in the area of entertainment related applications and content. The number of end points and network effect makes the telephone network unbeatable for "telephone calls". However, the telephone call does not exhaust all forms of communication and existing communication does not exhaust all demand. VoIP does not even need to displace the existing uses of the telephone network. The applications of the telephone network exist in the context of per minute charges, dialing telephone numbers, and relatively low quality audio (relative to face to face communication). Changing one or more of these dimensions changes the types of possible applications.

VoIP will find traction in areas of communication not already served via other means. FWD's decision to avoid any connection with the telephone network allows us to eliminate usage and geography based charges and restore an true Internet like experience to VoIP. The world wide web offered very little in 1991 except global termination. The relatively modest early content attracted additional audience and the additional audience attracted more content. The elimination of usage based charges really got things going and the same process can play out with VoIP.

Open standard SIP based VoIP offers the same promise as TCP based web browsing. The entire world wide web emerges from the file transfer mechanism enabled by TCP. SIP offers a mechanism to create real-time communication "sessions". Applying the creative energies of people toward utilizing sessions will produce an entirely different communication ecosystem. This build-it-and-they-will-come-argument remains unsatisfying for many people, but there exist no alternative. We really don't know any more about the future applications of VoIP than we knew about any of the other applications of the Internet that emerged over the years. The paid membership model allows FWD to put action to our conviction.

posted by Daniel @ Monday, August 11, 2008