Turning a PC into a phone has always been the tantalizing promise of the Internet – free phone service. But it’s never that simple.
As the saying goes, if it sounds too good to be true, it probably is, and talking online is a prime example. There are lots of new, promising developments with Internet voice technology. But they don’t come without cost. And that cost is still prohibitive. For most of us, the old-fashioned phone remains the cheapest, best way to talk.
But if and when that changes, Shaw and Telus are positioned to turn into the two largest rivals for Alberta local phone service.
Since it started in 1995, phoning via PC has found a relatively small group of users.
When Cramer Services of Painesville, Ohio, had their website built last year, the company thought it would be a good opportunity to try a new Internet trick. The webmaster integrated iPhoneline, a service that instantly connects web surfers with Cramer’s toll-free phone line. It seemed like a perfect fit. With a click of a mouse, a potential customer could have an instant chat with a Cramer receptionist.
Except . . .
“We tried it once or twice, and we didn’t have any luck,” says operations manager Carol Hoffman. “The fellow who put it in there thought it would be neat, but we haven’t used it.”
That was then – in Painesville. This is now – in Alberta, the most Internet-connected region of Canada.
Recently, a similar experiment was launched by Telus. Will it face the same fate?
Telus, in partnership with Dialpad – one of the many services that connects Internet users to traditional phone lines – last month launched an iPhoneline-like service for its British Columbia customers, connecting web surfers to toll-free lines. Telus plans to bring it soon to Alberta. It’s called One-Click Calling, and it’s poised to take advantage of the burgeoning demand for Internet telephony.
Working in Telus’s favour is that a rapidly increasing number of computer users own the multimedia components necessary for such networking (full-duplex sound cards – meaning that they can record and play at the same time, microphones and so forth). Internet real-time communications – especially “messenger” services – have been the fastest growth area of Internet activity over the past year.
In the wake of the terrorist attacks last week, U.S. president George W. Bush used the technology to consult various world leaders, including Russian president Vladimir Putin. The two certainly spoke on a secure intranet, but the same technology is applicable and available to the Internet.
Also working in Telus’s favour is that many of the technical hurdles that made the PC telephone such a pain in Painesville last year are disappearing. For example, Microsoft’s Windows XP, set to formally launch in about a month, will include new advancements to aid real-time communication.
Primarily intended to benefit Microsoft’s new Windows Messenger (the sequel to MSN Messenger), the operating system incorporates a feature that can automatically detect the highest quality sound allowable by the active traffic load, thus averting delays. Also, it intelligently fills gaps left by lost data packets, the cause of much interference in current services. It even includes echo suppression so that callers won’t hear their own voices play back to them over the recipient’s speakers.
But as always, the multi-billion dollar question is: Will this be the key to encouraging large numbers of users to adopt the technology?
Up until now, Internet phone sound quality has been less than stellar. It’s prone to gaps and delays.
But other complicating factors include script-enabling issues, adequate headsets, compatible sound cards, registration nuisances and firewall incompatibilities. These factors discourage the non-savvy computer user. (Note: Many online services are also Mac incompatible, including Telus’s One-Click calling.)
More fundamental than all these complications is the nature of the Internet itself.
“The big disadvantage of Internet protocol (IP) is its reaction to high traffic. The normal telephone network, if it gets way overused you get a busy signal,” says Ian Angus, president of Angus Telemanagement Group, a telecommunications consulting firm based in Ajax, Ont.
“The Internet, if it gets way overused, everything just slows down, which from a voice perspective is awful because humans can’t stand having delays in their conversations. You expect that when I say a word you’re going to hear it right away, not with a noticeable delay. Or even worse, with a delay between syllables or even fractions of syllables.”
Hence, scientists have been scrambling to find ways around these problems. Some of their innovations are on the market in Windows XP, for example.
Other developments will benefit cable companies.
Shaw Communications Inc., the big Alberta-based cable provider, is perfectly positioned to compete head-to-head with Telus for local phone services. Shaw’s cables are currently capable of carrying much more data, much faster than even Telus’s ADSL high-speed connections (at least under optimal conditions).
But Kevin MacDonald, director of marketing for Shaw’s Internet services, says his company will take a wait-and-see approach to the new developments. “We’re closely watching what’s going on with Roger’s and Videotron (in eastern Canada), and when they launch IP telephony, that gives us an idea of what works and what doesn’t. And when we’re ready to deploy and trial, we’ll be that much quicker off the mark.”
MacDonald is specifically referring to the recent advancement now available for IP telephony over cable, a standard called DOCSIS 1.1 (which stands for data-over-cable service interface specifications), reputedly the biggest leap yet towards making a cable line an effective phone line.
Essentially, it gives precedence to real-time communications.
“What (this new technology) means is that your cable company could say: ‘We’ll provide local phone service.’ And you’d just plug into the cable,” says Angus.
But being a telecom watcher, and having seen such hype before, he’s not anticipating a widespread roll-out anytime soon. “If you’d asked the cable industry five years ago, they would have said: ‘Oh, in a couple of years we’ll be doing that for all our customers.’
“Well, we are up to 2001, five years later and none of them is doing it. We just did a write-up in a recent newsletter, and in essence, all the major cable companies said that it’s a couple of years before this technology is economically viable. And Shaw’s (president) Jim Shaw said it was five to seven years away before they would do it.”
The stock-market stall of the past year or so, which has hit the Internet service providers particularly hard, has added to the cautiousness.
“If DOCSIS 1.1 (or 2.0, its just-announced successor) really takes off, and the price drops, then the business case is there. But at this point the cable industry is struggling hard enough to make its Internet access work,” adds Angus.
“The fact that it’s very, very hard to raise capital right now means people are going to be reluctant to invest heavily in new technologies, especially when, in cable television, they’ve got the cash-cow of TV, and they’re busy installing Internet connections faster than they can handle. Why would they invest heavily today in a market where, as near as they can tell, at best they can break even, given the prices they can charge for voice?” So a factor that may bring competition to the local phone service market may be, ironically, increased competition in the television field. As the phone companies increasingly dabble in the television game – such as Bell ExpressVu, the cheap satellite service – the incentive is growing for the cable providers to move on to telecoms’ turf.
Finally, with Telus recently asking the Canadian Radio-television and Telecommunications Commission (CRTC) for a higher ceiling for local service rates, which up until now have been among the lowest in the world, Telus may be creating a greater-than-ever financial incentive for the cable suppliers to join the phone game. And when that day comes, finally, you will need one less piece of hardware on your desk.
But don’t hold your breath.
