Consider This . . .Voice over Internet Protocol (VoIP)
If you haven't heard
about "Voice over Internet Protocol" telephony services, or "VoIP,"
then this is a good place to get the basics. Generally speaking,
VoIP includes sophisticated calling features using your computer
with headset, handset or a gateway interface in a business environment
to make unlimited calls or data transmissions to any digital device
anywhere in the world. Services could include standard telephone
usage, video transmissions, faxing, conferencing, call forwarding,
messaging, call waiting and remote data access through any Internet
According to a white-paper group headed by Balz Wyss, Ph.D., and
published by the Microsoft Corporation in June 2003, VoIP has
been greatly enhanced by the introduction of the broadband service
explosion. Microsoft expects broadband subscriptions to rise from
52.7 million in 2003 to nearly 84 million by 2005, an increase
of 59 percent.
Intel took a slightly different tack indicating that there are
4.9 billion persons worldwide with access to a telephone and more
than 800 million worldwide with access to a computer through 2004.
These numbers are also expected to dramatically rise in 2005 and
beyond. Microsoft noted that the broadband phenomenon will occur
primarily in the cable and DSL subscription area, enhanced further
by the smart gateway devices and Internet services now available
as a result of broadband introduction to the masses.
The Microsoft report went on to say that broadband subscriptions
in the U.S. have caused extraordinary growth in small business
and home-based Local Area Networks, or LANs. Industry leaders
believe LANs will increase to 23.5 million, or 83 percent of the
multiple-computer households, by 2005.
A solid piece of real evidence comes from Comcast, our local Internet
and cable provider. As of this writing, Comcast is now offering
to set up a home-based LAN for up to five home-based machines
using the standard cable connection that already delivers digital
television service---for only the cost of the installation. This
is truly a sign of the times.
Internet technology has caused the tables to turn. The communications
and data lines are blurred, according to the following quote from
Intel: "The Internet was developed as an information medium but
is rapidly becoming a communications medium. The telephone was
designed as a communications medium but is being transformed into
an information medium with the emergence of portals. In a digital
world, communications and information are converging into a stream
of digits that can be readily accessed by a multitude of devices,
when and where people want."
This brings me back to VoIP. Why now? Intel reports that deregulation
of the telecommunications industry and a new class of competitive
service providers are creating the VoIP market. These providers
can support advanced telephone applications with minimal investment.
The capacity for this business niche market is further enhanced
by the efficiency of the Internet Protocol over standard circuit
networks. Unlike voice circuits, which transmit data at 64 Kbs,
the VoIP telephone transmits in data packets at 6 to 8 Kbs and
sometimes as little as 2Kbs. With an eight-times-the-bandwidth
advantage over conventional circuit-based systems, we are truly
wired for speed.
Not many years ago, VoIP had just a few companies around, like
that provided call-making service from your PC to conventional-based
circuits for free. Quality was also an issue in the early going.
Now, service providers are eager to be in the market. As a result,
hundreds can be found, and most charge something per minute although
substantially less than conventional communications companies.
A great resource to find the right VoIP provider for you is www.business.com/directory/telecommunications/ip_telephone.
At this location you will be instantly linked to more sites than
you will ever have time to visit. I would recommend you visit
several companies' sites before making your selection. At www.packet8.net
you can truly see a representative sample of services offered
by VoIP providers to the residential as well as business client.
Using your broadband connection and with minimal additional equipment,
if any, for a residential connection to more sophisticated gateways
in an office, you could soon be calling anywhere in the United
States, Canada or internationally for as little as 2 cents a minute.
In larger commercial applications it is possible to create a gateway
for your data and communications needs that will provide rates
of return that can be fast and profitable. Recently, Anne Arundel
Community College offered an adult education class to learn more
about the business side of VoIP and data integration.
The good news and bad news is that current legislation allows
communication in this manner to be considered data transmission
rather than voice communications. The result is that you could
save hundreds or thousands of dollars a year in a business system,
and the federal and state excise taxes don't apply. If you have
followed the history of legislation in this area, you know that
politicians are eager to bring this to an end. It's another reason
to look at VoIP now. Call me on the net!
If you have comments or suggestions or have an idea for a future
computer or business topic, e-mail me at Jimmy@InsideAnnapolis.com.
R. Hammand, CPA, is a resident of Annapolis and a consultant
to businesses in Annapolis, Baltimore and Washington, D.C.