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VoIP
FOR
DUMmIES
‰
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VoIP
FOR
DUMmIES
‰
by Timothy Kelly
Foreword by Don Peterson
Chairman and Chief Executive Officer, Avaya Inc.
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VoIP For Dummies®
Published by
Wiley Publishing, Inc.
111 River Street
Hoboken, NJ 07030-5774
www.wiley.com
Copyright © 2005 by Wiley Publishing, Inc., Indianapolis, Indiana
Published by Wiley Publishing, Inc., Indianapolis, Indiana
Published simultaneously in Canada
No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or
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Manufactured in the United States of America
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About the Author
Timothy Kelly is an Information Systems technology professional with more
than twenty-five years of experience. His background includes the design of
many telecommunications network enterprises, from small simple networks
that support a single building location to large multilocation networks running integrated data, voice, and videoconferencing applications.
From 1992 until 2002, Tim was principal consultant for Network Technology
Services, a Pittsburgh-based company. He has completed network design
engagements for countless organizations, including Alcoa, Blue Cross, Mercy
Health System, Mine Safety Health Administration, the U. S. Navy, South Hills
Health System, Westinghouse Telecommunications, ARBROS Communications,
The Community Builders, and Lucent Technologies. Kelly is a certified
ORACLE DBA Master and Network+ Professional.
Tim is an honors graduate of Duquesne University. He went on to complete the
MSIS and post-graduate certificate in Telecommunications at the University of
Pittsburgh. His terminal degree is a Doctor of Science in Information Systems
from Robert Morris University. His research focus was the effects that converging technology networks have on organizations and people, an area in which he
is well published and has made numerous presentations before academic and
corporate bodies.
Tim Kelly is author of Bits & Bytes Y2K & Beyond and is well known for his
consults and media appearances during the years and final months preceding
the year 2000. He was dubbed a “calming influence” on the Y2K scare by the
Pittsburgh media.
From 1983 to 2004, he taught Information Systems Technology courses for
local Pittsburgh schools, including Duquesne University, Indiana University of
Pennsylvania, and Robert Morris University. In 2003, with the help of former
associates, he started the National Center for Converging Technology
Research, an organization dedicated to helping other organizations understand how best to apply converging technologies such as VoIP in their business environments. In Fall 2004, he began teaching full-time for the University
of North Carolina at ECSU.
Tim Kelly will be co-authoring a VoIP solutions book that defines the latest
convergence options for running data, voice, and video applications —
the “triple play.” The book will provide current coverage on the latest wireless forms of networking. The effect on business of WiMax and other fixedwireless alternatives will be treated. Tim believes the solution to the triple
play model lies with resolving the dilemma of inadequate bandwidth and that
VoIP over WiMax and WiFi show how close we are to cracking this nut. The
next few years for VoIP should be really exciting.
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Dedication
To my primary passion source, my heart and soul, my Tushka; and our four
children: Laural, Christal, Gabe, and Matt. Each beat of my heart has four
distinct iterations.
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Author’s Acknowledgments
I would like to thank all of my friends at Robert Morris University. They gave
me a great deal to think about, chief among which was the need to put VoIP
convergence into a frame that the average reader could understand. In our
discussions about my ideas, I would constantly hear “think Dummies.” With
the dramatic changes in the VoIP convergence marketplace in 2004, I knew
the time was right to not only think Dummies but to also write Dummies.
I would like to express a truly heartfelt thanks to Greg Croy at Wiley Publishing.
Greg believed in my ideas and supported me through the entire process. It is
not easy to become a For Dummies author, but the guidance from Greg
enriched the process while making it possible and enjoyable. I also want to
thank Leah Cameron, who conducted the first nuts-and-bolts review of my
work. Her feedback was invaluable. I want to thank Nancy Stevenson for her
help in finalizing the Table of Contents.
I want to thank Allen Wyatt and Dave Tegtmeier, my preproduction editorial
team. Assembling a group of this magnitude was no small challenge as professionals of this caliber are always in demand. But they all found the time to
take on VoIP For Dummies. Words cannot express my appreciation.
I want to thank Chuck Mance, a friend of mine who lent a hand with drafting
Chapter 14. Chuck is an experienced, competent IT professional. I greatly
appreciate his contributions.
I also want to thank the other people who engaged my ideas about VoIP in
varying degrees: Steve Phillips, Rich Krauland, all my friends at Avaya, Cisco
Systems, Verizon Communications, Matt Kelly, Greg Chmiel, and all of my students and clients.
To my wife Patty (Tushka), who proofed many initial drafts but, more importantly, also helped me get to church on time and provided emotional support
throughout the process.
Last but far from least, I want to thank my mother, Mary (Andreiczyk) Kelly,
who gave me faith, love, and perseverance. Mom turns 80 in a few short
months.
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Publisher’s Acknowledgments
We’re proud of this book; please send us your comments through our online registration form
located at www.dummies.com/register/.
Some of the people who helped bring this book to market include the following:
Acquisitions, Editorial, and
Media Development
Composition Services
Acquisitions Editor: Greg Croy
Project Coordinator: Maridee Ennis
Editorial Manager: Carol Sheehan
Layout and Graphics: Jonelle Burns,
Denny Hager, Stephanie D. Jumper,
Heather Ryan
Media Development Supervisor:
Richard Graves
Proofreaders: Leeann Harney, Jessica Kramer,
Linda Morris, Dwight Ramsey
Editorial Assistant: Amanda Foxworth
Indexer: Joan Griffitts
Cartoons: Rich Tennant
(www.the5thwave.com)
Special Help
Allen Wyatt
Technical Editor: Dave Tegtmeier
Publishing and Editorial for Technology Dummies
Richard Swadley, Vice President and Executive Group Publisher
Andy Cummings, Vice President and Publisher
Mary Bednarek, Executive Acquisitions Director
Mary C. Corder, Editorial Director
Publishing for Consumer Dummies
Diane Graves Steele, Vice President and Publisher
Joyce Pepple, Acquisitions Director
Composition Services
Gerry Fahey, Vice President of Production Services
Debbie Stailey, Director of Composition Services
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Contents at a Glance
Foreword ....................................................................xxi
Introduction ................................................................1
Part I: VoIP Basics ......................................................9
Chapter 1: Getting Down to Business with VoIP ..........................................................11
Chapter 2: VoIP: Not Your Father’s Telephone Service ..............................................21
Chapter 3: Everything You Need to Know About Charges .........................................41
Part II: Taking VoIP to Your Network ..........................61
Chapter 4: Road Map to VoIP Transports and Services .............................................63
Chapter 5: Getting Switched ..........................................................................................81
Chapter 6: Going Broadband ..........................................................................................93
Chapter 7: We’re Dedicated ..........................................................................................105
Chapter 8: Going Wireless ............................................................................................119
Chapter 9: Using VoIP on the Internet ........................................................................129
Chapter 10: Telephones and VoIP ................................................................................141
Part III: Making the Move to VoIP ............................153
Chapter 11: Simplifying Cost Management ................................................................155
Chapter 12: Locations Galore ......................................................................................173
Chapter 13: Setting Up the Smaller Office ..................................................................187
Chapter 14: Providing Dollars and Support for VoIP ................................................199
Part IV: The Part of Tens ..........................................209
Chapter 15: Ten Reasons Why Your Company Should Switch to VoIP ...................211
Chapter 16: Ten Reasons Why You Should Switch to VoIP at Home .......................217
Chapter 17: Ten VoIP Myths .........................................................................................221
Chapter 18: Ten VoIP Manufacturers ..........................................................................227
Part V: Appendixes ..................................................233
Appendix A: VoIP Providers .........................................................................................235
Appendix B: Glossary ...................................................................................................239
Index .......................................................................259
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Table of Contents
Foreword.....................................................................xxi
Introduction .................................................................1
About This Book ..............................................................................................1
Conventions Used in This Book ....................................................................2
What You’re Not to Read ................................................................................2
Foolish Assumptions ......................................................................................3
How This Book Is Organized ..........................................................................4
Part I: VoIP Basics ..................................................................................4
Part II: Taking VoIP to Your Network ...................................................5
Part III: Making the Move to VoIP ........................................................5
Part IV: The Part of Tens .......................................................................6
Part V: Appendixes ................................................................................6
Icons Used in This Book .................................................................................6
Where to Go from Here ...................................................................................7
Part I: VoIP Basics .......................................................9
Chapter 1: Getting Down to Business with VoIP . . . . . . . . . . . . . . . . .11
In the Beginning, There Was POTS ..............................................................12
From POTS to Packets ..................................................................................12
Eye for IP Telephony .....................................................................................13
Making internal calls ...........................................................................14
Making external calls ..........................................................................14
Gaining Flexibility with VoIP ........................................................................15
Looking at the TCP/IP Model .......................................................................16
TCP/IP layers ........................................................................................17
TCP/IP differences ...............................................................................17
Chapter 2: VoIP: Not Your Father’s Telephone Service . . . . . . . . . . . .21
Mr. Bell ............................................................................................................21
Analog Telephone Circuits ...........................................................................22
Telephony Goes Digital .................................................................................23
Combining Analog and Digital .....................................................................24
Digital Telephony Invades PSTN Territory ................................................25
The circuit-switched network gets organized .................................27
The digital services carrier network .................................................28
War Breaks Out Between Circuits and Packets .........................................29
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Private Telephone Systems Reduce POTS Line Costs ..............................33
The Centrex model ..............................................................................34
The KTS and PBX models ...................................................................36
Private Systems versus VoIP ........................................................................37
Converging Networks ...................................................................................38
Chapter 3: Everything You Need to Know About Charges . . . . . . . . . .41
Accessing the Network .................................................................................42
Service Categories Cost You Big Time ........................................................43
Paying the local piper .........................................................................45
Going the distance with intralata rates ............................................46
Intrastate service rates .......................................................................48
Interstate carrier service ....................................................................49
International carrier service ..............................................................50
Summing up carrier services .............................................................51
Saving with VoIP ............................................................................................52
Good news for the family budget ......................................................53
Taking savings to the office ................................................................53
Toll-bypass: Saving with calls at a distance .....................................54
Add-on recurring costs .......................................................................54
VoIP Savings: A Case Study ..........................................................................56
Analyzing the client’s usage ...............................................................56
The VoIP solution ................................................................................57
Applying VoIP to your situation .........................................................58
Part II: Taking VoIP to Your Network ...........................61
Chapter 4: Road Map to VoIP Transports and Services . . . . . . . . . . . .63
CSI: Telephony ...............................................................................................64
Choosing a Transport ...................................................................................65
The Five Golden Rings of CSI .......................................................................67
The PSTN CSI .......................................................................................68
The DS CSI ............................................................................................69
The optical carrier CSI ........................................................................72
The hybrid fiber-cable CSI ..................................................................75
The wireless CSI ...................................................................................75
Summing up the CSIs ..........................................................................76
How VoIP and the Internet Fit the CSI Picture ...........................................78
VoIP over Internet ................................................................................78
VoIP in the corporate sector ..............................................................79
VoIP in the consumer sector ..............................................................79
Chapter 5: Getting Switched . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .81
Understanding How the PSTN Supports VoIP ...........................................81
The PSTN-VoIP baseline ......................................................................82
The POTS transport ............................................................................82
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The ISDN transport .............................................................................83
The DSL transport ...............................................................................85
Controlling Calls ............................................................................................86
Signaling system 7 (SS7) .....................................................................87
Call control and VoIP ...........................................................................87
Delays and errors ................................................................................88
Quality and VoIP ............................................................................................89
Network delay ......................................................................................90
Poor compression ...............................................................................90
Signal attenuation ................................................................................91
Chapter 6: Going Broadband . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93
Broadband Transmission Methods ............................................................94
Asymmetric ..........................................................................................94
Symmetric ............................................................................................94
VoIP with Your Cable Modem ......................................................................95
VoIP shares something with your TV ................................................95
Adding VoIP ..........................................................................................96
Setting up VoIP on a cable modem ....................................................96
Possible cable modem problems ......................................................98
VoIP Through Your DSL Connection .........................................................100
POTS plus! ..........................................................................................101
Setting up VoIP on your DSL line .....................................................102
Potential DSL problems ....................................................................103
VoIP over POTS ..................................................................................103
Chapter 7: We’re Dedicated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105
Basics of Dedicated Transports ................................................................105
Bandwidth and speed .......................................................................106
Costs of dedication ...........................................................................106
High-quality VoIP calls ......................................................................109
Types of Dedication ....................................................................................109
The DS transports .............................................................................109
The OC transports .............................................................................111
Converging Dedicated and Switched Networks ......................................111
Managing Bandwidth ..................................................................................113
Dedicating channels to applications ...............................................114
Dynamic bandwidth allocation ........................................................114
Keeping a Switched Line ............................................................................116
Chapter 8: Going Wireless . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
Why WiFi? .....................................................................................................119
Ethernet networking and VoIP .........................................................120
Examining the IEEE 802.11 standard ...............................................120
Moving up to wireless .......................................................................121
Adding VoIP to the Wireless Network .......................................................122
IP soft phones for pocket PCs ..........................................................122
Wireless extension to cellular ..........................................................122
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Taking VoIP to the WiMax ...........................................................................123
Graduating to IEEE 802.16 ................................................................123
Putting WiMax to use ........................................................................124
Getting Hip to WiSIP ....................................................................................126
SIP enables smoother conversions .................................................126
Using SIP today ..................................................................................127
Chapter 9: Using VoIP on the Internet . . . . . . . . . . . . . . . . . . . . . . . . . .129
Network Options Affect Quality of Service ..............................................130
Internet Protocols and Quality of Service ................................................132
ISPs make the Internet go round .....................................................132
Examining protocol layers ...............................................................133
Firewalls for Security ..................................................................................134
Connecting Through a VPN .......................................................................137
VPN costs ...........................................................................................139
Implementing a VPN ..........................................................................139
Chapter 10: Telephones and VoIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141
Running Down the Three Flavors of VoIP Phones ...................................141
VoIP Hard Phones ........................................................................................142
Basic hard phones .............................................................................143
Intermediate hard phones ................................................................144
Advanced hard phones .....................................................................144
Features supported ...........................................................................144
VoIP Soft Phones .........................................................................................146
Stationary computers .......................................................................148
Portable computers ..........................................................................148
Features supported ...........................................................................149
VoIP Wireless Phones .................................................................................149
Maximizing Your Current Telephone Investment ...................................150
Upgrading older telephone systems ...............................................150
Using older telephones on the new VoIP network ........................152
Part III: Making the Move to VoIP .............................153
Chapter 11: Simplifying Cost Management . . . . . . . . . . . . . . . . . . . . .155
VoIP Comes and the Charges Go ...............................................................155
Reducing or eliminating phone lines ..............................................156
Take off your add-on charges ...........................................................156
Yippee! Deregulating your telephone costs ...................................157
Free call features ...............................................................................157
The Final Four Meet VoIP ...........................................................................158
Goodbye POTS, hello VoIP ...............................................................159
Goodbye Centrex, hello VoIP-Centrex .............................................162
Goodbye KTS, hello VoIP ..................................................................164
Goodbye PBX, hello VoIP-PBX .........................................................165
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Unified Networks .........................................................................................166
Larry’s story .......................................................................................166
Joann’s story ......................................................................................167
Convincing Your Boss .................................................................................168
A seamless transition ........................................................................169
Meeting your future with VoIP .........................................................170
Bandwidth on demand ......................................................................170
Chapter 12: Locations Galore . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .173
Challenges of Multiple Locations ..............................................................173
Evaluating Your Existing Networks ...........................................................174
Developing a Plan ........................................................................................177
Designing a VoIP solution .................................................................177
Putting your plan into action ...........................................................178
Staging the Implementation .......................................................................181
Plug-and-play ......................................................................................181
Managing downtime ..........................................................................182
Reviewing the Effect ...................................................................................182
Features and costs of the new VoIP network .................................182
It’s not just a new way to do circuit-switched ...............................184
Bottom-Line Analysis ..................................................................................185
Chapter 13: Setting Up the Smaller Office . . . . . . . . . . . . . . . . . . . . . .187
Is VoIP for You? ............................................................................................187
Figuring out those contracts ............................................................188
Current costs meet long-term plans ...............................................189
Analyze bills and contracts ..............................................................189
Evaluating Existing Networks ....................................................................190
Breaking down the costs of POTS telephony .................................190
Breaking down the costs of computer networking .......................192
Putting VoIP to Work ...................................................................................192
Supporting your telephony calls .....................................................193
Understanding VoIP savings ............................................................195
Financial Analysis ........................................................................................196
Chapter 14: Providing Dollars and Support . . . . . . . . . . . . . . . . . . . . .199
Evaluating VoIP Costs .................................................................................199
Gathering cost data ...........................................................................200
Performing comparisons ..................................................................201
Making the Investment ...............................................................................204
Cost-Effective VoIP Designs .......................................................................205
Providing Support .......................................................................................206
In-house ..............................................................................................206
Partnering ...........................................................................................207
Keeping Up with Technology .....................................................................207
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Part IV: The Part of Tens ...........................................209
Chapter 15: Ten Reasons Why Your Company
Should Switch to VoIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .211
Changing Direction of Telephony Industry ..............................................211
Feature-Rich, Cost-Effective Alternatives .................................................212
Existing Investment Protection .................................................................213
Seamless Maintenance and Management ................................................213
Flexibility and Portability ...........................................................................214
Enhanced Network Management ..............................................................214
Better Allocation of Personnel ..................................................................215
Productivity Applications ..........................................................................215
Better Bandwidth Utilization .....................................................................215
Reduced Costs .............................................................................................216
Chapter 16: Ten Reasons Why You Should Switch
to VoIP at Home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .217
One Carrier ..................................................................................................217
One Bill .........................................................................................................218
Free Local Service .......................................................................................218
Reduced or Eliminated Toll Service Charges ..........................................218
Reduced International Charges .................................................................219
More Bandwidth ..........................................................................................219
Enhanced Internet Access .........................................................................219
More Ports to Connect More Phones and Computers ...........................220
Wireless Service in Your Home .................................................................220
Videoconferencing ......................................................................................220
Chapter 17: Ten VoIP Myths . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .221
VoIP Runs Only on the Internet .................................................................222
POTS Is Cheaper ..........................................................................................222
POTS Is Faster ..............................................................................................223
The Quality of Service Is Suspect .............................................................223
VoIP-Enabled Phones Are Pricey ...............................................................223
VoIP Calls Can Be Intercepted ...................................................................224
911 Calls May Not Work ..............................................................................224
VoIP Is Not Ready for Prime Time .............................................................225
VoIP Call Features Are Expensive ..............................................................225
You Have to Throw Out All Your Old PBX Telephones ..........................226
Chapter 18: Ten VoIP Manufacturers . . . . . . . . . . . . . . . . . . . . . . . . . . .227
Avaya ............................................................................................................228
Cisco Systems ..............................................................................................228
Siemens ........................................................................................................229
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Alcatel ...........................................................................................................229
Nortel ............................................................................................................230
Mitel ..............................................................................................................230
NEC ................................................................................................................230
3COM ............................................................................................................231
Shoretel ........................................................................................................231
Inter-Tel ........................................................................................................232
Part V: Appendixes ...................................................233
Appendix A: VoIP Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .235
Appendix B: Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .239
Index........................................................................259
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Foreword
C
ommunications is the heart of your business, and voice over IP has the
capability to strengthen that heart and thereby strengthen your business. VoIP is not just another form of connectivity. Yes, it combines the intimacy of voice with the power of data, but it is more than voice over the
Internet or voice over your data network. It enables the merging of voice and
data applications in ways that liberate business processes. VoIP extends
voice communications to anyone, anywhere, over any device — it is the fundamental building block of intelligent communications. It offers businesses
the benefits of significant cost savings, increased revenue, and better customer service. It puts communications at the core of the business, enabling
faster decisions, revitalized business processes, and new business models.
This year is a pivotal one in electronic communications. With customer confidence growing, IP is now preferred over traditional phone systems. With VoIP
becoming mainstream, the adoption rate is accelerating.
Voice over IP is no longer a wait-and-see decision. It’s happening right now.
You can’t afford to limit your communications options or neglect the role that
it can play in business performance. But maximizing success in switching
to a VoIP system requires top-notch planning, design, implementation, and
management. To help you get started and understand the fundamentals, Tim
Kelly has written a fine book, VoIP For Dummies. This book lifts any confusion
you may have about the subject and clearly identifies the many benefits of
VoIP for businesses. This book is your portal to understanding how VoIP
can make your business stronger by making your communications systems
stronger. The results will be people more productive, processes more efficient, and customers more loyal.
Don Peterson
Chairman and Chief Executive Officer, Avaya Inc.
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Introduction
V
oIP (pronounced voyp) is the name of a new communications technology
that changes the meaning of the phrase telephone call. VoIP stands for
voice over Internet protocol, and it means “voice transmitted over a computer
network.”
Internet protocol (IP) networking is supported by all sorts of networks: corporate, private, public, cable, and even wireless networks. Don’t be fooled by
the “Internet” part of the acronym. VoIP runs over any type of network.
Currently, in the corporate sector, the private dedicated network option is
the preferred type. For the telecommuter or home user, the hands-down
favorite is broadband.
You may be wondering what all this means in terms of your actual telephone.
This is the really cool part: You can access your account on the VoIP network
by a desktop telephone, a wireless IP phone (similar to a cell phone), or the
soft screen dialpad of your laptop or desktop computer.
With VoIP, you can literally pick up your things and move to another location,
within your office building or around the world, without having to forward
your calls to a new telephone. VoIP’s entirely portable!
What’s more, you can access the Web from your IP phone, enabling you to get
important (or not so important) announcements and e-mail on the go. It’s like
having a pocket PC and a cell phone rolled into one, specifically designed for
your network.
As you can imagine, VoIP is a win-win for everyone. The added flexibility and
quicker response times translate into greater customer satisfaction and
increased productivity throughout your organization.
About This Book
VoIP For Dummies is written for anyone who wants to reduce or eliminate
their toll charges while upgrading the level of computer networking services
and calling features they receive. Here you discover not only what VoIP is but
how you can implement it in your company or home. (You’ll even find out
whether VoIP makes a lot of sense for your situation.)
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VoIP has particular appeal to those who want to use their computer network
to carry their telephone calls, thereby saving the expense of running different
networks for each.
If you’re a consumer running broadband Internet services and you have significant toll charges each month, you should look into VoIP to make your toll
calls. With VoIP running on your broadband line, you can save money each
month by reducing your toll costs while still maintaining your traditional telephone service for local calls.
If you’re a manager who needs to decide about support or recommend
whether to make the switch to VoIP, or if you’re an IT person looking to help
your boss make an informed decision about integrated networking, this book
provides an excellent place for you to begin.
I explain how VoIP works and how it compares to telecommunications technology that was previously considered irreplaceable. By the time you finish
Part III, you’ll see why many businesses throughout the world and consumers
in the United States have turned to VoIP and integrated networking as their
main system for data, voice, and video.
Conventions Used in This Book
To help you navigate through this book, I use the following conventions:
Italic is used to highlight new words or terms that are defined.
Boldfaced text is used for chapter titles, subtitles, and to indicate keywords in bulleted lists.
Monofont is used for Web addresses.
Sidebars, unlike the rest of the content, are shaded in gray.
What You’re Not to Read
Whether you are a consumer or a corporate user, you don’t have to read this
book from cover to cover to find out how VoIP can benefit you or your company. You may miss some really interesting stuff, but if you’re interested in
knowing just the fundamentals of IP telephony and VoIP, you can get that
information by reading just Chapters 1 and 2. These two chapters cover VoIP
basics and introduce you to how you can make VoIP work for you.
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Introduction
If you’re unfamiliar with how traditional telephone companies bill their customers (that’s you!), Chapter 3 enlightens you with this information. (Before
reading this chapter, you need to promise that you won’t yank the phone
cords out of the wall when you discover how much you are really paying —
talk isn’t cheap!)
If you’re thinking of putting VoIP in your home or even in your home office, or
you already have done so, you may be interested in gaining more information
about VoIP fundamentals in Part I and then reading Chapter 6, where I
describe how to put broadband VoIP to work in your home. If you’re using
VoIP from home to connect to your company’s virtual private network (VPN),
you’ll also want to look at Chapter 9.
Information technology professionals working in the corporate world, and
the people that manage them, will be more interested in Chapters 4 through 7
than any other section of the book. These chapters cover all the VoIP network types used in the corporate sector.
If you just want to define the type of telephone your company is currently
using or may use with VoIP, check out Chapter 10. If you need to understand
the traditional non-VoIP telephony system models that a company must have
to even begin to look at VoIP, see Chapter 11.
If you want to move your company toward a VoIP telephony system model,
you need to know how to make it work from a financial perspective; Chapters
12 and 13 can help with case studies and cost figures. These chapters detail
how a multilocation company and a smaller single-location company can
transform their monthly telephony system finances using a VoIP network.
Chapter 14 details other factors that apply to evaluating a move to VoIP for
any size network.
Feel free to read this book from cover to cover or just dip into whatever part
or section best suits your needs. You can then return to the rest of the book
when you have more time to enjoy the read.
Foolish Assumptions
As I wrote VoIP For Dummies, I made some assumptions about you and what
you might already know about traditional telephony services in contrast to
VoIP telephony. Here are those assumptions:
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You probably have trouble understanding your monthly telephone bills
and don’t realize that their long-distance is divided into four billable service categories.
You rarely consider that there is a cost for the line (access line) and a
cost for the usage on that line.
You might be thinking that VoIP is a new way of doing telephony but,
from what you’ve heard, it works only over the Internet.
You may know the basics of computer networking and VoIP, but you
want to gain advanced knowledge, like using your computer and your
older POTS phone simultaneously with your new VoIP service.
You’ve heard about all the new and exciting features that come with VoIP
at no additional cost.
You heard (incorrectly) that 911 and E911 do not work with VoIP, not
knowing that VoIP principles are the technology that underlies E911.
You’ve heard that VoIP can save the consumer or the company lots of
money.
You may want to protect your company’s telephony systems investment
while figuring out a way to bring VoIP in because you know it will save
the company big bucks.
How This Book Is Organized
Each part of this book focuses on a different aspect of VoIP, as described in
the following sections. VoIP is a technology that challenges all your preconceptions about telephony and networking.
Part I: VoIP Basics
Part I introduces you to the basics of VoIP. You get the rundown on essential
terms and the general workings of the technology. This part describes the
basics of IP telephony and how VoIP calls get packetized and carried over
external networks. Access services and the lines they run on are defined. You
find out how traditional telephony models can become cash cows for the carriers. TCP/IP, the number one network design model, is introduced as the
underlying design for VoIP networks.
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Introduction
Part II: Taking VoIP to Your Network
In Part II, you discover how networks connect to each other. From the public
telephone network to the global Internet and all the network types in
between, you’ll find out what your networking options are.
The Internet is only one network option for VoIP (it also runs on all the other
network types that drive industry). Network types include broadband networking, which exists mainly as a consumer option for VoIP. Other types covered in Part II are switched, dedicated, and wireless networks. There is no
shortage of network types to run VoIP on.
To help set VoIP in a network context, Part II compares the transport lines
(where applicable) and services available on each network type. Also covered are bandwidth options and quality of service. With these options, companies can support not only VoIP but their data and videoconferencing needs
for all their locations.
Consumers are also treated to illustrated coverage on broadband networking
options. You can run VoIP out of your home and receive ideal bandwidth
options that support not just VoIP but your computer data — and even video.
When it comes to VoIP, all the network options in the world would be of little
value if you couldn’t actually talk on the phone! For that reason, Chapter 10
outlines the major VoIP-enabled telephone types: VoIP hard phone, VoIP soft
phone, and VoIP wireless phone. It also covers the traditional telephone
types that can be used in a VoIP network.
Part III: Making the Move to VoIP
The reasons to switch to VoIP are countless, depending on how far you want
to project the future of the marketplace. Part III starts in Chapter 11 by
describing the “final four” telephone system models. These are the traditional systems used by consumers and corporate customers. If you’re not yet
on VoIP, you must be running with one or more of the final four options.
Through real-world case studies, Part III provides guidance for both singlelocation and multilocation companies, covering the total cost factors and
then applying a VoIP solution that significantly reduces the cost of a VoIP
conversion while enhancing productivity.
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Part IV: The Part of Tens
In Part IV, I provide specific content and advice for both corporate and consumer-based prospective VoIP users. This, of course, is accomplished in the
time-honored Dummies format: the venerated Part of Tens.
If you’re a company pondering the move to VoIP, Chapter 15 gives you the top
ten reasons why you need to make the move. Consumers find the top ten reasons why they should change in Chapter 16. Chapter 17 dispels the top ten
myths about VoIP. Get the truth about these myths here and now.
Finally, Chapter 18 provides a quick overview of the best of the best: the top
ten VoIP manufacturers. When you’re ready to make the move, you’ll know
who to go to for support.
Part V: Appendixes
Last, but by no means least, the final section of this book includes two reference items that you will find helpful in making sense of the world of VoIP. The
first, Appendix A, provides an overview of the largest VoIP service providers
in the world. These are the companies that you can partner with to realize all
your VoIP dreams.
The second item is a handy glossary. Confused by a term you encounter
while reading the book? Turn to the glossary and your bewilderment will fade
into the past. (It’s also a great tool for understanding VoIP marketing
brochures and white papers.)
Icons Used in This Book
Throughout this book, I occasionally use icons to call attention to material
worth noting in a special way. Here is a list of the icons, along with a description of each.
If you see a tip icon, perk up! You’re about to find out how to save time,
money, or effort. These are the nuggets that, when heeded, can make your life
simpler.
This icon indicates information that is probably most interesting to those
with a technical bent. If you’re responsible for any aspect of the company
network or feel comfortable hacking it alone at home on broadband, you’ll
have no problem breezing through information marked in this manner.
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Introduction
Some points bear repeating, and others bear remembering. When you see
this icon, take special note of what you’re about to read.
How many times have you heard the phrase buyer beware? In paying for traditional telephony and VoIP networks, most concerns revolve around cost and
quality of service. When you see this icon, your life won’t be in danger, but
you will want to pay attention to the “gotcha” that this icon undoubtedly
marks.
Where to Go from Here
The most important thing to keep in mind whenever you’re exploring a new
technology is how it fits into the larger picture. Take a global view.
Specifically, always be thinking, “How will this feature increase my company’s
efficiency?” Or, “How will an integrated network help promote collaboration
across my company?” Of course, you may also be wondering how you’ll save
money with VoIP.
Consider the direction of the telephony industry. The move toward VoIP is
happening right here and right now. If you’re a consumer, the question is no
longer, “Should I get VoIP or broadband services in my home?” Instead, the
question is “How do I get these services?”
If you’re a decision-maker in your company, you need to strategize how to
remain competitive in a constantly changing market. If you’re a corporate
professional working in a department such as IT, telecommunications, networking, or even finance, you need to research the available technologies so
you can make recommendations to your boss and implement, if necessary, a
VoIP system. End users need to be prepared to make the switch if their company adopts a VoIP system, or if they get transferred to a new location that
already has such a system in place.
This book provides a great place for getting your feet wet, whether you’re a
consumer, a manager, in charge of the company finances, or an end user. My
best advice on where to go from here? Flip the page and keep reading!
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Part I
VoIP Basics
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Page 10
In this part . . .
ant to know how VoIP works? You find that information here, discussed in all its glory. Along the
way, you also discover a new VoIP terminology, which is
essential if you want to make sense of this brave new
world. You also get a glimpse at the new and exciting features that are part and parcel with VoIP.
In short, this part reveals the nuts ’n’ bolts of VoIP and
invites you to a whole new world of networking. Cool, huh?
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Chapter 1
Getting Down to Business
with VoIP
In This Chapter
Getting over POTS
Packetizing plain old telephone service
Beginning with IPT on the LAN
Reaching out with VoIP
Uncovering the TCP/IP model
T
echnological innovation is hurling itself upon us once again. This time,
it’s coming in the form of improving the way we communicate, bringing
with it new capabilities that change the meaning of the phrase telephone call.
VoIP (often pronounced “voyp”) is the name of this new communications
technology.
VoIP, which stands for voice over Internet protocol, basically means voice
transmitted over a digital network. Well, that isn’t technically accurate
because the Internet isn’t strictly necessary for VoIP, although it was at first.
What is necessary for VoIP technology is the use of the same protocols that
the Internet uses. (A protocol is a set of rules used to allow orderly communication.) Thus, voice over Internet protocol means voice that travels by way of
the same protocols used on the Internet.
VoIP is often referred to as IP telephony (IPT) because it uses Internet protocols
to make enhanced voice communications possible. The Internet protocols
are the basis of IP networking, which supports corporate, private, public,
cable, and even wireless networks. VoIP unites an organization’s many
locations — including mobile workers — into a single converged communications network and provides a range of support services and features
unequalled in the world of telephony.
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Technically, IPT refers to telephone calls carried over the organization’s local
area network (LAN) such as a single building location, a campus-like network,
or even a LAN within your home. When IPT crosses from the LAN to the WAN
or any other external network, including other LANs operated by the same
company at distant locations or the Internet, it becomes VoIP.
In the Beginning, There Was POTS
Before digital networking took off, everyone had to use the one and only
POTS, which stands for plain old telephone service (honestly, it does). POTS
runs over a network called the PSTN, or public switched telephone network.
These POTS telephone systems use the tried-and-true method of telephone
service known as circuit-switched. (See Chapter 2 for more about the history
of POTS, the PSTN, and the operation of circuit-switched telephony.)
For customers, the costs related to the regulated circuit-switched PSTN
remain much higher than they need to be. Consumers as well as companies
that must rely on POTS on a daily basis know what the POTS way of telephony means to their bottom line. The good news is that VoIP is an alternative that can greatly reduce or eliminate POTS-related costs. (Chapter 3 fully
details the recurring charges of the POTS way of doing telephony.) VoIP also
enhances productivity, leaving more money in the budget to do other things
besides pay telephone bills.
From POTS to Packets
VoIP technology enables traditional telephony services to operate over computer networks using packet-switched protocols. Packet-switched VoIP puts
voice signals into packets, similar to an electronic envelope. Along with the
voice signals, the VoIP packet includes both the caller’s and the receiver’s network addresses. VoIP packets can traverse any VoIP-compatible network.
Because VoIP uses packets, much more information can be carried over the
network to support and enhance your communication needs when compared
to traditional telephony methods.
In a circuit-switched network such as POTS, routing is less dynamic than with
a packet-switched network. In the POTS world, if a line is down, the call can’t
go through. In a packet-switched network, multiple routes can be established,
and packets can travel any of the available routes. If one of the lines supporting the network is down, the packet can switch to another working route to
keep the call up.
With VoIP, voice signals can travel the same packet-switched network infrastructure that companies already use for their computer data. Chapter 7 goes
into more detail about dedicated packet-switched networks that support VoIP.
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Eye for IP Telephony
VoIP also makes possible other services that older telephony systems can’t
provide. VoIP telephony services are interoperable, meaning that they work
well over all kinds of networks. They are also highly portable, which means
they will work with any IP-enabled device such as an IP telephone, a computer, or even a personal digital assistant (PDA).
IP telephony works by taking traditional voice signals and converting them to
a form that can be easily transmitted over a local area network. Thus, the
heart of IP telephony is the same as traditional data networking with computers. IP-enabled phones handle the voice-to-data conversion well, but don’t be
misled — implementing VoIP doesn’t mean that everyone has to use IP-enabled
phones. The best VoIP providers implement IP telephony in a manner that
protects your investment in existing telephone equipment, even if you have
analog telephone stations. (You’ll find more on this topic in Chapter 10.)
All IP phones have one important thing in common: a built-in network interface card (NIC), just like a computer uses. The NIC is critical for any network
device because it provides the device with a physical address and a way to
communicate over the network.
The physical address supplied by a NIC is called a MAC address. MAC stands
for media access control. The MAC address uses a standardized address and
is usually represented by six hexadecimal numbers separated by dashes. For
example, the following is a valid MAC address: 00-0A-E4-02-7B-99.
To support IP telephony, a server is typically dedicated to run the software
used to manage calls. Servers are just like personal computers, except they
have more memory, speed, and capacity. The server stores the database that
contains all the MAC addresses corresponding to all the IP telephone extensions assigned to users. Depending on the size of the LAN and the number of
users, you may use more than one server. For example, some LANs running IP
telephony dedicate a server just for handling voice mail.
Depending on the size of the LAN, one or more devices known as switches
are installed. These switches are boxes that have a series of ports into which
all LAN-addressable devices ultimately connect. (Examples of LAN-addressable
devices include computers, printers, wireless access devices, gateways, and
storage devices.) Usually the switches are set up in the communications closets around the LAN, and they operate 24/7. All the switches are interconnected, often with fiber-optic cable.
In a nutshell, all network devices, including your IP telephone, must physically connect to the LAN through a port on a switch.
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Calling over a computer network
Voice over Internet protocol is often taken to
mean basically what it states: Voice traveling
over the Internet. When VoIP was developed,
it worked only with the Internet. Today, VoIP
works on all other major network types, including those used throughout the corporate sector.
Making internal calls
When you want to call a coworker at your same location, you dial the phone
number corresponding to the person’s name. The signals are packetized and
sent to the managing server, where the packet picks up the MAC address of
the person you’re calling. Next, the packet is forwarded to the switch, then to
a particular port on that switch, and finally to the IP telephone connected to
the port. The coworker’s telephone rings. When the coworker picks up the
receiver or answers the call, a virtual connection is established between the
coworker and yourself for the life of the call. IP telephony does all this at
lightning speed.
Making external calls
The process of calling a coworker at an offsite location varies only a little.
The call is still initiated in the same way. But because the coworker is connected to a different LAN, the local server sends the call not to a switch
located on your LAN but through the company’s WAN (wide area network).
This is where IP telephony technically becomes VoIP.
Each LAN in a multilocation network is connected to the larger WAN. If you’re
located at the company’s headquarters in Pittsburgh, and you call a
coworker located at the office in Los Angeles, your call begins as an IP telephony call on your LAN. It then travels from your LAN through a gateway,
switch, or router that is programmed to re-packetize your call and encode the
VoIP packet with additional information, such as the address for the destination LAN.
Network gurus refer to the process of packetizing your voice telephone call
as encapsulation. A good analogy for this fancy techno-term is putting a letter
into an envelope for mailing. The difference is that these encapsulated packets contain the content of the telephone conversation in digitized form.
To participate in the company’s VoIP WAN, each LAN needs at least one edge
device, such as a router, a switch, or a gateway. An edge device is just that —
a device that sits on the boundary, or edge, of your local network and
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provides a connection to external networks. Depending on the company’s
network design, these edge devices can even have multiple interfaces that
connect them to more than one outside network. The edge devices take care
of all the IP telephony traffic going off-LAN by encapsulating the signals into
packets, encoding the packets with the correct addressing information, and
forwarding the packets out onto the WAN, where they make their way in a
packet-switched manner to their respective destinations.
When the packets arrive at the destination LAN, the edge device on that LAN
breaks down the VoIP packets and forwards them internally to the server that
manages IP services. From this point, the rest of the process is similar to IP
telephony services described in the preceding section: The phone rings, the
person being called answers, and a virtual circuit is established between the
caller and the receiver.
Gaining Flexibility with VoIP
VoIP is not just about making and receiving telephone calls; it’s about a whole
new way of communicating. Sure, it includes telephone calls, but there is so
much more to the VoIP telephony picture. VoIP integrates most if not all
other forms of communication. You can even run videoconferencing to your
desktop.
With VoIP, your company enjoys increased productivity and customer satisfaction. These improvements are typically realized through the flexibility
offered by enhanced calling features. A few calling features, such as voice
mail and call transfer, have been around in the POTS world for quite some
time. On the other hand, integrating data, voice, and video applications to
run over a single network and work with wireless phones are more recent
innovations made possible by IP telephony.
Following are some enhanced calling features made possible by IP telephony:
Vemail: Before IP telephony and VoIP, you accessed voice mail through a
telephone and accessed e-mail through a computer. With VoIP, you can
read your voice mail on your computer screen and listen to your e-mail
through an IP-enabled telephone. The new term for this converged feature is vemail (pronounced “v-e-mail”).
Web surfing: Because VoIP operates with the same set of IP rules and
protocols that support Web-based applications, it is possible to access
the Web with an IP-enabled telephone. If you have an IP telephone with a
large enough screen, it can display Web pages or a list of your favorite
Web links. For instance, you could use your phone to view your stock
exchange trading status or the current weather forecast.
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In an IP telephony world, these calling features (and many more) are available with no monthly recurring charges. VoIP, with all of its many benefits, is
quickly replacing traditional POTS-based technologies. VoIP is even becoming
a superior replacement for many former computer-only applications.
One of the big stories with VoIP is the many new and exciting features that
increase your ability to be agile and mobile. You no longer have to say “I’ve
got to get to a phone!” VoIP can be on your desk, computer, mobile phone, or
PDA. It can be hardwired or have no wires at all. This flexibility is astounding
to those familiar with traditional telephony.
If you have a mobile user base, be sure to check out IP soft phones. A soft
phone is software that works on a laptop computer or pocket PC and provides most of the functionality of a traditional desk phone. If a user can connect to a network, the soft phone provides a way to reap the benefits of IP
telephony regardless of location.
Looking at the TCP/IP Model
Many people marvel at the very thought that the POTS method of placing
telephone calls can be replaced by a technology that essentially runs on the
computer network. They are also startled by the many new and exciting features that come with VoIP. However, people also question how VoIP can possibly work and are a bit suspicious about whether VoIP can really live up to all
the claims.
The answer can be found in the very same model that has been supporting
data-only networking since the inception of the Internet more than twentyfive years ago: the TCP/IP model.
Pronounced “t, c, p, i, p,” the model uses a five-layer approach to networking.
TCP/IP is adapted to enable it to also support VoIP. TCP/IP has proven to be
just as effective with packetizing telephony as it has been for many years
with packetizing computer data.
To fully understand VoIP, it pays to know a little about the technical underpinnings that make it work over the network of your choice. In this section,
I describe the layers of the TCP/IP model in relation to computer networks.
Then I insert into this content the parts that change when TCP/IP supports
VoIP.
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TCP/IP layers
TCP/IP is first and foremost a group of networking protocols. Protocols are
the rules that govern how network traffic gets packaged electronically for
transmission over a network. Some TCP/IP protocols are used strictly for
data networking, some are used strictly for VoIP telephony, and some are
used by both data and VoIP. Each protocol corresponds to one of five possible layers that make up the TCP/IP model:
Application: Special protocols at this layer ensure the quality and deliverability of VoIP packets.
Transport: The user datagram protocol (UDP) at this layer transports
the VoIP packets from start to finish, which in this case means from
caller to receiver and vice versa.
Internetwork: At this layer, IP addressing is added to the packet. Every
VoIP phone or computer acting as a VoIP phone gets a unique IP address
that routes delivery of VoIP packets to and from the caller and receiver
during the life of the call.
Network interface: At this layer, MAC addressing is added to the packet.
(The MAC address is supplied by the NIC required for all network
devices.)
Physical: This layer converts all packets to electro or electro-optical signals to be carried over the local or external network.
Each layer is associated with one or more protocols. A packet must traverse
all five layers: once when the packet is sent and again when it is received.
Basically, the VoIP packet originates with the caller. The packet travels down
all five layers on the caller’s side of the network and gets packaged with the
correct protocols at each layer. After the packet reaches the lowest layer, the
physical layer, it is sent over the network to its destination. When the packet
reaches its destination, it makes its way up through the layers and gets
unpackaged. When it reaches the application layer of the receiver, the packet
is translated into a voice signal that the receiver hears.
TCP/IP differences
TCP/IP protocols are applied a little differently depending on whether you
have a traditional data packet or a VoIP packet. Figure 1-1 illustrates the
packet breakdown and corresponding layers involved in a TCP/IP network
connection for a standard Web application, which uses a traditional data
packet.
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Source Computer
Destination Computer
Surf Web
Web page
IP-enabled
computer
IP-enabled
server
Virtual Circuit
Application
Port 80 = HTTP
Header
Header
Figure 1-1:
Passing a
data packet
through the
TCP/IP
protocol
layers.
Header
Header
TCP packet
IP address
MAC address
Forward/translate electro-optical signals
Port 80 = HTTP
Transport
Header
Internetwork
Header
IP address
Network interface
Header
MAC address
Physical
Header
Complete packet
TCP packet
Forward/translate electro-optical signals
Complete packet
Network
Note that the transport layer of the packet uses the familiar TCP protocol to
construct the packet exchanges between the source computer and the destination computer (in this case, the Web server).
Figure 1-2 illustrates the layered protocol stack shown in Figure 1-1, but this
time applied to a VoIP call. Note the header at each layer’s version of the
packet (except the application layer). The various headers identify what
layer the packet is on during its travel from caller to receiver.
If you compare Figures 1-1 and 1-2, you notice two protocol differences, at the
application and transport layers of the TCP/IP model. Other than these differences, a great deal of symmetry exists between voice and data using TCP/IP.
That’s why VoIP can behave like a telephone while delivering many computer-related functions.
Application layer differences
The first difference between the VoIP implementation of TCP/IP and the traditional data implementation is in the application layer. In a VoIP call, the application layer utilizes the following three protocols:
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NTP: Network time protocol. This protocol enables timing, which helps
ensure that the signals are transmitted and received within the proper
timeframe to assure quality.
RTP: Real-time transport protocol. This protocol provides end-to-end
network transport functions for digital voice signals encapsulated in the
VoIP packet.
RTCP: Real-time transport control protocol. This protocol monitors
voice signal delivery and provides minimal control functions to ensure
the delivery of packets.
All three of the application layer protocols combine, at nanosecond speeds,
to deliver VoIP voice packets.
Transport layer differences
The second difference between the traditional data implementation of TCP/IP
and the VoIP implementation is in the transport layer. The lion’s share of
computer data networking uses the TCP protocol at the transport layer. For
VoIP, the transport layer uses UDP, user datagram protocol. (UDP is used also
for real-time videoconferencing networks.)
VoIP Caller
Person Receiving VoIP
“I say! Watson,
are you there?”
“Bell! Is
that you?”
VoIP Telephone
Conversation
NPT-RTP-RTCP
Header
Header
Header
Figure 1-2:
Passing a
VoIP call
through the
TCP/IP
protocol
layers.
Header
UDP
IP address
MAC address
Voice signals from caller
packetized for network
Application
NPT-RTP-RTCP
Transport
Header
UDP
Internetwork
Header
IP address
Network interface
Header
MAC address
Physical
Complete outbound packet
Header
VoIP signals unpacked
for receiver
Complete inbound packet
VoIP Network
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TCP is slower than UDP, but it provides guaranteed delivery of its computer
data packets. Keep in mind that we are measuring speed here in nanoseconds. Even if it takes a long time for the packets to reach their destination
computer, eventually TCP ensures delivery.
Because voice is a real-time application, it is more important that the voice
packets get to the receiver as quickly as possible. That is why UDP is by far
the hands-down favorite to provide the transport layer for VoIP networks.
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Chapter 2
VoIP: Not Your Father’s
Telephone Service
In This Chapter
Uncovering the origins of VoIP
Telephoning using analog lines
Going digital
Networking analog and digital
Digitizing the public telephone network
Raging war between circuits and packets
Replacing POTS phone systems with VoIP
Discovering how private telephone systems reduce POTS costs
Watching network types multiply and morph
V
oice over IP represents a significant change from the traditional way that
telephone calls have been handled until recently. Even so, the genesis
of VoIP is rooted in the history of networks, specifically, the history of the
circuit-switched phone network.
This chapter explores just a bit of that history. It offers a whirlwind tour of
how phone systems got to where they are today and how that relates to VoIP.
By understanding the way that phone networks relate to things such as regulated phone costs, you’ll find it easier to grasp the huge cost savings that can
be realized by converting to VoIP.
Mr. Bell
Believe it or not, the roots of VoIP go all the way back to the 1870s. In 1879,
Alexander Graham Bell forgot his Internet password and, knowing that his
assistant had stashed it away, uttered the famous words “Watson! Are you
there?” He never got on the Internet, but he did prove that the human voice
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could be carried electronically over a pair of wires. He also demonstrated that
the endpoints for these wires had to be connected to the right equipment —
hardware that he invented. Mr. Bell’s inventions ushered in an age of communication that made the world much smaller than it had ever been before.
When Mr. Bell invented the telephone and thereby gave birth to the telephone network, VoIP was not even a consideration. (Truth be told, the idea of
a network wasn’t yet a consideration either.) Other inventions would be
required before VoIP could become a reality.
The first telephone equipment was analog. Historians and technicians alike
have labeled the first phone service POTS, or plain old telephone service. VoIP
won’t function very well over a POTS system; it requires a digital network.
Digital networking for telephones was invented in the 1920s, but the first digital networks would not leave the laboratory until much later, in 1964. Today,
most phone companies in the United States have updated their equipment to
include digital service.
Over time, the POTS network gave way to the PSTN, or public switched telephone network. (The terms PSTN, public switched telephone network, public
telephone network, and phone network are used synonymously.)
Although it occurred in what seems like the ancient past, Alexander Graham
Bell’s work is important in understanding VoIP. The POTS network that began
with his invention has grown into the largest circuit-switched network in the
world. It also has become an expensive network, with individuals and companies spending hundreds of billions of dollars each year for communication
services.
VoIP, which was developed in 1995, is gradually replacing the PSTN. Some view
the PSTN as the antithesis of VoIP, but it still remains the standard of quality
by which VoIP is measured. For instance, people often ask whether VoIP provides voice quality as good as what is delivered through the PSTN. Most of the
factors used to evaluate the quality of VoIP are based in some way on the
PSTN, so understanding a bit about the older networks is important.
Analog Telephone Circuits
As mentioned, phone technology originally was analog, from start to finish.
Analog modulation is the technique used to convert sounds (such as your
voice) into an electromagnetic form. The analog circuitry of the POTS telephone transmitter converts the voice patterns coming from the caller’s mouth
into continuous electromagnetic signal patterns. These patterns are carried
on a telephone line circuit, sometimes called a trunk line, where they are
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carried to the terminating end of the circuit. There, analog circuitry converts
the signal back into audible sounds so they can be understood by humans.
A good basic illustration of a POTS circuit can be found in an old elementary
school science experiment. My fifth-grade science teacher, Ms. Davis, had us
punch a hole into the end of two tin cans and connect them using a long
string. If we held the string taut, Jodie Schnickmeister could whisper into one
can and I could hear her in the other. (I used to love it when Jodie whispered
in my ear.)
This simplistic experiment taught the basics of the POTS network: Sound was
converted to an analog signal (vibrations) that was carried over the taut
string to the receiving can. The string, in turn, vibrated the can and converted the analog signal back into audible sounds.
Telephony Goes Digital
Scientists, never content with two tin cans and a string, looked for different
ways to transmit sounds over long distances. The pioneering work of Harry
Nyquist in the 1920s gave us the basics of sampling theorem. In the 1940s,
Claude Shannon would mathematically prove Nyquist’s sampling theorem.
Their work is the foundation for what we now call digital networking. Basically,
they proved that you could take the analog signals of any POTS call and convert them to digital form. This meant that POTS calls could originate in
analog form, be converted to digital form, and be transmitted on the PSTN
using the now familiar ones and zeroes of computers. Digital networking had
arrived, setting the stage for the beginning of VoIP.
The work of Nyquist and Shannon led to many telephone and computer network inventions. For example, Nyquist is credited with the patent that led to
the first coder-decoder, or codec, device. Codecs can come in many sizes and
shapes and are often found in the electronic circuitry of large networking
devices. Codecs basically convert analog signals to digital form and viceversa. Nyquist’s work led to the design of many other networking devices
such as dial-up modems, high-speed broadband modems, IP routers, and
VoIP gateway servers.
The ability to convert analog signals to digital form also led to the development of several types of computer networks. From the early 1960s to the present day, several types of digital networks, including fiber-optic-based
networks and wireless networks, have emerged in support of computers and
telephone systems. Today’s digital networks, regardless of the form they
take, are capable of supporting VoIP telephony. We cover network types
beginning in Chapter 4.
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Combining Analog and Digital
When digital networks were introduced, the phone companies wanted to use
them right away because they provided a more efficient means of transmitting
signals all over the place. (Digital networks could carry data much faster than
analog networks.) The phone companies were presented with a problem, however: how to make existing analog phones work with a digital network.
The answer was to use a codec to convert the analog signal to digital. But
where should the conversion take place? At the phone company’s facilities or
at their customer’s location? In the early years of the digital revolution, the
conversion took place at the phone company’s facilities, which allowed the
phone company to utilize the existing wiring between their facilities and the
customer’s location. This wiring between a phone company facility and a customer is often called a local loop.
Over the years, the codec has been pushed closer and closer to the customer, all in an effort to make the phone network as close to 100 percent digital as possible. Most parts of the PSTN remain a combination of analog and
digital. Customers pick up a phone, which converts audible sound into
analog signals. These signals are carried over the local loop to the phone carrier’s facilities, where they are converted to a digital signal. The signals are
forwarded to the receiver’s end. After the signals are received by the last
piece of carrier equipment (closest to the end customer), they are converted
back to analog form. The analog signals go into the receiver side of the POTS
telephone and are heard as a replica of the caller’s voice. Figure 2-1 illustrates
how a phone call is transmitted over the PSTN.
Calling Pennsylvania 6-5000
In the 1940s, a consortium of leaders in the
telecommunications industry and in government standardized how customers would be
assigned telephone numbers. The telephone
number identified a specific pair of wires out of
millions of pairs of wires, and a specific phone
company switch out of thousands of such
devices. The term circuit-switched describes
this setup of circuit wiring, switching devices,
and telephone number assignment. The PSTN
is sometimes referred to as the circuit-switched
or switched network.
Because today’s public phone system is still circuit-switched, it still relies on the same basic
system for telephone number assignment. VoIP
introduced dramatic changes in how the network is used and, over time, VoIP could force
changes in how numbers are assigned. With
VoIP, phone numbers are no longer tied to specific wires and switches. VoIP routes calls
based on network addresses, and phone numbers are simply used because that is what
people are familiar with. (VoIP takes care of
translating a phone number into a network
address.) In the future, as more and more
people adopt VoIP-based systems, we may see
dramatic changes in phone numbering.
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Person called
PSTN
Caller
Carrier
company
facilities
Figure 2-1:
A typical
PSTN
telephone
connection.
Carrier
company
facilities
Local loop
Inside wiring
Trunks
Today, a customer can have either an analog or a digital phone. Depending on
customer location and end-user equipment, the POTS call can be 100 percent
digital.
For more than a century, POTS remained the dominant form of two-way
telecommunications. During that time, however, POTS-based telephone systems changed dramatically in the number, length, diameter, and type of wire
or cables used and in the types of telephone equipment both at the customer
end and at the carrier’s facilities.
Digital Telephony Invades PSTN Territory
When digital networks were implemented back in the 1960s, the telephone
carrier companies began using a technique that permitted them to accept
analog telephone calls coming into their switching facilities and convert
those signals into digital form for transmission on their shiny new networks.
They had not yet made the leap into packetizing telephone calls, which is
what we have today with VoIP. At the time, they thought it best to keep the
circuit-switched telephone carrier network physically separate from the
evolving packet-switched computer network.
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The phone companies were able to make other improvements to circuitswitched telephone services. After their circuit-switched carrier network
received the caller’s telephony signals, they were able to convert the signals
into digital form, as necessary. They discovered that digital signals allowed
them to aggregate many more calls onto a given circuit and through a given
switch than they could before. This enabled them to streamline how circuitswitched telephone calls could be made.
One innovation was the addition of area codes, which help to process calls
over a circuit-switched network. The entire telephone number, including area
code, identifies the number of circuits and the location of the switching
devices for a given phone on the PSTN network. For example, consider a call
originating in Mountain View, California (area code 415) to a person in
Pittsburgh, Pennsylvania (area code 412). The call is switched out over three
physically distinct circuit switches — 415 to 412 — to set up and carry the
call. Figure 2-2 illustrates the routing of such a circuit-switched call.
6514
PSTN
412
Pittsburgh
LATA
LongDistance
Switch
882
Figure 2-2:
Routing a
call from
area code
415 to area
code 412.
South
Hills
Any
LATA
Originating
telephone number
415-732-6514
732
Any
LATA
Any
exchange
Mountain
View
415
Mountain View
LATA
Any
exchange
Telephone number
being called
412-882-0956
0956
If these two locations are on the same computer network, and both are using
VoIP, the call could be carried over the company’s computer network in
packet form. This process is known as on-net VoIP telephony. None of the
packets would touch the PSTN. There would be no toll, regulatory, or
metered charges for this long-distance telephone call. Figure 2-3 illustrates
the routing of such a packet-switched VoIP call.
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Private VoIP Dedicated Network
On-Net
Pittsburgh,
PA
412-882-0956
T1
line
T1
line
Router
Router
Ethernet
Figure 2-3:
Routing a
call across
a VoIP
network.
Ethernet
PSTN
gateway
VoIP
phone
PC
Mountainview,
CA
415-732-6514
For local
calls
PSTN
gateway
Off-Net
PSTN
VoIP
phone
PC
The circuit-switched network
gets organized
As circuit-switched networks continued to evolve, other technologies were
developed that helped the carriers manage their telephony operations.
Carriers began offering more types of POTS access and POTS carrier services.
The early forms of local and long-distance carrier services had to be redefined according to where the carrier company had facilities to terminate the
circuits and transport lines, as well as where they might install their facilities.
In addition, government regulation of telecommunications picked up. The
concept of a local access and transport area, or LATA, as a geographical designation was defined. Eventually, the entire map of the United States would be
developed into thousands of LATAs. You can usually identify a particular
LATA by the area code associated with a telephone number.
The big advance with LATA was that it helped carriers get organized in a
manner that would let them offer other types of carrier services, including
those outside the circuit-switched services of the PSTN. For example, a numbering plan was developed that identified any circuit or access transport by
its area code and the prefix of the main telephone number. The area code
became known as the NPA, for numbering plan area, and the prefix became
known as the NXX, for number exchange. For example, the NPA-NXX 412-882
is the area code and prefix for the Pittsburgh 412 LATA and switch 882,
located in the South Hills of the Pittsburgh 412 LATA.
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What does the NPA-NXX number have to do with VoIP? In Chapter 7, I discuss
dedicated networks that have proven to be the highest quality of service
(QoS) network type for VoIP networks. All carrier lines for a dedicated VoIP
network are priced using the NPA-NXX of each location included in the
network.
Following the development of digital services, the corporate sector began
demanding more bandwidth from carriers to support their networks. It didn’t
take long for carrier companies to develop digital, high-bandwidth transport
lines that could meet the diverse needs of the corporate sector.
These newer transport lines would be digital all the way from a customer’s
location A to the same customer’s location B, regardless of how many miles
were in between. These customer demands led to the development of transport services that multiplied exponentially the amount of available digital
bandwidth that could be offered to the corporate sector.
These newer ultrahigh-bandwidth transports were not the same kinds of
wires as those in the POTS network. They were usually a thicker-gauge wire
or fiber-optic cables. When installed, they connected two or more locations
of a customer’s company in a point-to-point fashion versus the circuitswitched method of the PSTN.
These developments contributed to the emergence of private dedicated networks, which in turn ensured that VoIP would be here to stay. (As you find
out in later chapters, VoIP becomes a viable option for companies only when
used over dedicated networks.) Eventually, on-net VoIP over dedicated networks will replace expensive circuit-switched calling over the PSTN.
The digital services carrier network
The new types of digital lines installed by the carriers began to form a new
physical carrier services network. The lines did not cross-connect or intersect with any of the millions of circuit-switched lines that are in place and
continue to be installed by the carriers. At the carrier company’s facilities,
newer types of fully digital equipment terminated these digital lines.
This new carrier services network was called the digital services carrier network. (It is also known as the digital signal carrier network, or simply as the
DS.) This network used higher-bandwidth digital lines and operated with
packet-switched protocols to network computer data. (For more on protocols, which are simply rules for using the network, see Chapter 1.)
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Soon thereafter, the DS network was defined based on its fundamental unit of
bandwidth, known as the channel. The smallest channel unit provided a
bandwidth of 64 Kbps (64 thousand bits per second). This channel was called
a DS0, pronounced “D–S–zero.” (Many computer gurus start counting with 0;
it’s a binary thing.) DS0 became the base unit of bandwidth from which other
dedicated transports were defined. (In Chapter 7, I cover the popular DS standards in detail.)
The DS network also introduced to the telecommunications vocabulary
another term that characterizes most of the transport mechanisms that are
not part of the older circuit-switched network. Because the lines used by the
DS carriers were installed between private customer locations and the public
at large could not use or connect to them, DS lines became known as dedicated to the customer leasing them. The entire series of DS standards eventually became known as the dedicated carrier services network.
War Breaks Out Between
Circuits and Packets
The corporate sector’s thirst for leasing dedicated DS lines was unquenchable. Soon a dilemma emerged as to how to distinguish the circuit-switched
network and the newer dedicated network, which used packet-switching
technology. Since its inception, the circuit-switched network was a public carrier services network. The DS network was being called dedicated, or private,
because no one but the customer paying for the DS lines was permitted to
use them.
Public versus private a.k.a.
Confused over the different terms for the PSTN
and dedicated networks? The following list
comes to the rescue, showing the most popular
also-known-as terms for both.
PSTN
DS
public
private
public switched telephone network
private dedicated transport network
public telephone network
digital services network
switched network
dedicated network
circuit switched
packet switched
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It wasn’t a great leap to make the distinction between public and private
types of services. At this point, the name public switched telephone network
(PSTN) began to be used to characterize the circuit-switched network.
Eventually, the PSTN would be referred to by the telecommunications industry as simply the switched network. The DS name stuck with the network that
provided private dedicated transport services. Eventually, the DS network
would be referred to as simply the dedicated network.
Figure 2-4 illustrates the physically separate PSTN and DS networks.
POTS telephony continues to use circuit-switched protocols that don’t packetize telephony signals. (See Chapter 1 for an explanation of packets.) POTS
signals travel from one line to the next line on a given circuit of lines, just like
in the fifth-grade science experiment using tin cans and a string. Another
good way to understand circuit-switched protocols is to think about a railroad system. Trains must switch tracks along a circuit of tracks based on the
destination of the railroad cars traveling over the tracks. The direction of the
train is determined by the physical tracks that the train uses. Figure 2-5 illustrates such a circuit-switched train.
PSTN
DS
Circuit
switched
Packet
switched
PC
Router
Ethernet
Public
telephone
network
Figure 2-4:
Nonconverged
PSTN
and DS
networks.
Printer
Server
Private telephone system
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Circuit switch
882-0956
If you had
VoIP
you’d be home
by now!
412-LATA
Circuit
Figure 2-5:
The circuitswitched
network is
like a train
traveling on
physical
tracks.
0956
Circuit
0957
VoIP technology has enabled telephony signals to run over dedicated networks using packet-switched protocols. One of the preferred methods of running VoIP in the corporate sector is to use dedicated lines. Instead of being
primarily dependent on the PSTN for its telephone service requirements,
companies using VoIP protocols can send and receive telephone calls over
their private computer networks. Using VoIP, voice signals can be packetized
in a manner similar to computer data packets.
VoIP includes the caller and receiver’s network addressing information in the
packets sent over the network. If a given circuit on the network is down, VoIP
packets can switch to another computer network circuit because the packet
is not dependent on the circuit itself for directions. In the previous example,
the circuit-switched train is switched solely by the tracks it travels. If the
train runs into a broken track, it can’t continue to travel to its destination.
VoIP packets can have many alternative routes because the destination
address inside the packet tells the network where to route the packet.
Most companies today use packet-switched networks for their computers
and separate circuit-switched networks for their voice calls. Figure 2-6
depicts this typical scenario.
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Typical LAN
Printer
Data
server
E-mail
server
Ethernet
PC
POTS Telephone System
PSTN
Telephone
system
Figure 2-6:
Companies
typically use
nonintegrated
networks
for data
and voice.
Telephone
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Private Telephone Systems
Reduce POTS Line Costs
Computer data networks and circuit-switched voice networks are completely
separate, with individual staffing, billing, maintenance, and accounting systems. Although the maintenance costs of computer networks are affordable
for most companies, the recurring charges for traditional forms of telephony
are huge for small, medium, and large multilocation companies. VoIP is
designed to converge (integrate) a company’s voice needs onto the company’s existing computer network. If a company does this, they can eliminate
most (if not all) recurring circuit-switched telephony charges.
In the past, the POTS world had only two types of services: local and long distance. Local service covered the entire metropolitan area, with no distinctions for the various levels of toll service that we have today. In the early
days of the telephone, long-distance cost customers dearly. A call from New
York to the west coast might have cost $3 to $4 per minute. Today, that same
call might cost a consumer $.02 to $.05 per minute and a corporate caller $.01
to $.03 per minute. The corporate customer is most likely on some sort of
dedicated private network consisting of a phone system connected to the
PSTN.
It might appear that the cost of telephony today is dirt cheap in historical
terms. This would be a mistaken conclusion. In addition to the carriers getting more organized and the government increasing its regulation of the
telecommunications industry, many changes have evolved. These changes
have increased your bottom-line telephone bill and increased the number of
line items on that bill.
Now, instead of just two types of phone service offered on the PSTN (local
and long distance), we have five: local, intralata, intrastate, interstate, and
international. Each of these is discussed in detail in Chapter 3. These five services are based on the origin and destination of a call, using the LATA and
NPA-NXX to determine those locations. In addition, the same system is used
by the government to place various surcharges and fees on each telephone
access line.
No one would argue that the quality of carrier-switched telephony is excellent. However, the system that has evolved for charging telephony customers
leaves much unsaid and a lot to be desired. Except for local calling, VoIP can
reduce or eliminate the charges of the other four categories.
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To lessen the burden of newer and diverse telephone costs, many companies
have acquired their own POTS-based telephone systems. Company-sponsored
telephone systems can reduce the monthly bill that consumers and companies pay for telephony services. Four different telephony system models have
evolved in the past three decades.
The first model, POTS, has already been described; it is the use of telephony
access lines and carrier services over the PSTN through a carrier. The other
models are the Centrex, KTS, and PBX models. Each of these are discussed in
this sections.
The Centrex model
The second model is the central office exchange service, or Centrex, model.
Centrex is physically set up the same as the POTS access line model. Like
POTS, Centrex uses the same physical twisted-pair copper lines.
The difference between the POTS and Centrex models lies in how the line is
terminated at the carrier company’s facility. Instead of getting switched into
the PSTN directly, the Centrex line first goes to the more intelligent mainframe-level telephone system owned and operated by the carrier. From there,
the system can provide the customer with many more features not directly
available on a plain POTS line. To get these features on a POTS line, the customer typically has to pay for each feature. Centrex provides a bundle of
features with little or no added charges.
Because you get more with Centrex, you pay a little more for the line on a
per-line per-month basis. Centrex is a good alternative for companies operating out of temporary facilities (such as a lease situation) and for companies
that can’t or don’t want to maintain a full-blown telecommunications infrastructure. When you lease a Centrex system, maintenance is usually included,
which reduces the need for skilled staff on the company payroll. Figure 2-7
shows how the addition of a Centrex system modifies the model originally
shown in Figure 2-1.
The good news is that a VoIP solution exists for the more traditional Centrex
situation: VoIP Centrex. You need a computer network in the temporary
premises, but that is an expense you can unplug and take with you when you
move to your permanent location. With VoIP Centrex, you can start your VoIP
network, acquire features galore, and get the maintenance services you need.
When you move to your new, permanent location, you simply plug in your
network, and you are up and running.
Figure 2-8 shows the addition of VoIP Centrex to the mix.
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Persons called
Callers
PSTN
Carrier
company
facilities
Carrier
company
facilities
Figure 2-7:
A typical
Centrex
telephone
connection
over a
POTS line.
Telephone
System
Local loop(s)
Centrex
Inside wiring
Trunks
Centrex (hosted)
VoIP gateway
Person called
PSTN
Caller
Internet
access
Figure 2-8:
VoIP
Centrex,
sometimes
called
hosted VoIP.
Carrier
company
facilities
Carrier
company
facilities
Local loop
Inside wiring
Trunks
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With any Centrex option, you pay more per month in return for avoiding the
need to sink costs into your own infrastructure. Also, by using the Centrex
host’s facilities, you get a rich feature set with no additional monthly charges.
Another benefit is that you can walk away from a Centrex solution anytime
you want without penalty. Although some smaller companies keep Centrex
forever, most growing companies eventually convert to one of the models
described in the following section.
The KTS and PBX models
The other two system models are private telephone systems installed on the
company’s premises. Low-volume customers often use a key telephone
system, or KTS. High-volume, larger companies often use a private branch
exchange, or PBX. These two are a departure from the POTS-line model,
where a line is run to each phone on the premises. As such, they are also a
departure from the Centrex model, which uses the same type of access line
as POTS.
Figure 2-9 illustrates how a typical private telephone system would change
the phone mix.
Persons called
Callers
PSTN
Carrier
company
facilities
Figure 2-9:
A typical
private
telephone
system
connection.
Carrier
company
facilities
Local loop(s)
Private
telephone
system
Trunks
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One big benefit of private telephone systems is that they reduce the number
of required access lines. For example, the industry standard is one access
line for every six to eight employees who have a telephone. Any reduction in
the number of access lines represents an enormous cost benefit for companies when compared to the POTS or Centrex models. In addition, private telephone systems enable the company to provide most traditional call features,
such as voice mail, call forwarding, call transfer, and conferencing, to any
telephone in the company — at no added cost.
Private Systems versus VoIP
A private telephone system approach can’t begin to compare to a VoIP model
in terms of savings. Your guide should be “How much telephone calling traffic, across all five regulated PSTN charging categories, do you or your company have each month?” If your monthly call volume, which is charged by the
minute for each line across each charging category, is substantial, a private
telephone system model reduces your recurring charges because you use
fewer lines. However, VoIP can reduce your recurring charges even further, as
you’ll discover in the next chapter.
Following is a list of cost benefits and features that your company can gain by
converting to its own telephone system.
Greatly reduced number of access lines
Reduced recurring carrier charges
Reduced access line fees and surcharges
Reduced access line taxes
Elimination of call feature charges
Greater managerial control of telephony systems and services
There is no doubt that moving to a private telephone system saves a company significant money when compared to a POTS access-line model. But
keep in mind that all of these cost benefits are based on reductions in the
number of lines required or lower costs for features priced on a per-line
basis. These benefits are also realized with any VoIP model.
The conventional telephony models described in this section, KTS and PBX,
don’t remove the problems associated with telephone costs. They only minimize them by adjusting the number of access lines or calling features you
need to pay for. A VoIP system, on the other hand, represents a fundamental
change in telephony, and thereby offers huge cost savings, feature enhancements, and productivity improvements. VoIP eliminates the need for most
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access lines. (A few POTS lines are always required in any building.) VoIP
eliminates also the noncarrier costs (that is, your maintenance costs), line
fees, and government surcharges that come with those lines. And VoIP runs
on the computer network, which is usually already set up.
Converging Networks
In Figure 2-10, you see a packet-switched computer network running VoIP and
connected to the traditional PSTN. Note the absence of any POTS lines or private telephone systems (KTS or PBX) under the DS carrier service network
cloud. All telephone calls are originating on the company’s computer network
using VoIP. Only calls destined for the PSTN are diverted off the company’s
network. These types of calls, referred to as off-net, are the only calls that
may be associated with a recurring service charge. For customers and companies running VoIP, off-net calls typically are only the calls that go to the
public network (for example, to order a pizza or to call 911). On-net calls
require no additional lines over the existing computer network setup and,
unlike POTS-PSTN calling, have no additional recurring charges.
To other site
locations on
company network
PSTN
DS
Dedicated
T1 line
Dedicated
line
Circuit
switched
DS
Packet
switched
Dedicated
T1 line
POTS line
Router
Figure 2-10:
VoIP
connecting
to private
and public
networks.
Ethernet
POTS
telephone
PC
VoIP
phone
Telephony
service
A smaller company with just a single location may use VoIP to connect their
computer network to the PSTN to support calls that must travel off their private network. This solution requires installing a VoIP gateway that can convert the company’s on-net traffic to circuit-switched telephone calls that have
an off-net destination. For example, a call from your desktop phone to the
grade school that your daughter attends is likely to be a local PSTN call.
Figure 2-11 shows how a VoIP network works with a gateway.
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On-Net
Telephony
Private
dedicated
VoIP network
PSTN
Internet
T1
T1
VoIP
phone(s)
Off-Net
Telephony
Router
Router
PRI
Figure 2-11:
Adding a
PSTN
gateway to
a VoIP
network.
PC
Ethernet
Printer
PSTN
gateway
Server(s)
Converting VoIP telephony traffic to run on the PSTN is certainly a big benefit
of VoIP, but many more exciting features and benefits are explained in the
chapters that follow. For example, in Chapter 3, I describe how VoIP reduces
or eliminates those nasty, pay-by-the-minute service charges and other recurring charges such as regulatory fees and taxes.
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Chapter 3
Everything You Need to Know
About Charges
In This Chapter
Getting access to the network
Understanding the costs of service categories
Surviving your monthly bills
Analyzing savings with a case study
I
n the old days of making calls with a telephone (remember, just last year),
you paid for a phone line. Your company may have had one network to
handle dozens or even hundreds of phone lines coming into your business
and another network to handle computers. Now companies can converge
both networks into one. By using VoIP over a private data network, your company can bypass the older, more expensive way of using the public circuitswitched network.
Although some local telephone lines may be necessary, you can reduce or
eliminate the cost of your older telephony infrastructure, the total volume of
call minutes per month, line-related regulatory fees and taxes, and therefore
most if not all of your total phone bill. When was the last time your phone bill
was less than you thought it would be?
This chapter describes the bottom-line savings of using VoIP. You see how
traditional calling methods hit you with charges for everything under the sun
and how calling with VoIP can change this for the better. Along the way, I
explain the terminology used by traditional phone companies. By chapter’s
end, you’ll know about all the charges billed by traditional phone companies —
as well as which of those charges your conversion to VoIP can eliminate or
drastically reduce.
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Accessing the Network
All phone costs start with leasing some sort of access line or set of access
lines from the local exchange carrier (affectionately called LEC, which rhymes
with “heck”). For the line itself, you pay a monthly access fee that varies
depending on the type of line you lease. For most consumers, the line is a
POTS line that permits them to place and receive telephone calls on the
PSTN. Local line access costs the typical residential customer an average of
about $25 per month, not counting recurring per-minute usage charges, toll
charges, regulated fees, and taxes.
For businesses, regular POTS line access costs two to five times what a residential customer pays. If you run a small business, you might lease a group of
lines and accept, as consumers meekly do, the telephone numbers assigned
and provided by the LEC. A larger company with an in-house telephone
system might lease different types of access lines. Some may be POTS lines
that support two-way access, permitting callers to place and receive calls.
Other types of access lines may be used depending on the size and type of
company. (I’ll cover the other types of access lines beginning in Chapter 4.)
You may hear the term two-way used to refer to POTS lines that can be used
to both make and receive calls from the PSTN.
Never one to make things simple, your LEC has a different monthly access
cost for each type of line. In addition, if your company has its own telephone
system, you pay a one-time fee to buy a bulk list of usable telephone numbers
that you assign to your employees. As employees come and go, your company can reassign those telephone numbers accordingly.
Some companies lease higher bandwidth access lines, which are much more
expensive. These lines combine bandwidth and provide what are known as
POTS line equivalencies. In this way, companies can reduce the total number
of physical POTS lines needed and therefore reduce their monthly line-access
costs. But to be able to do this, the companies must have their own in-house
telephone system, which introduces another cost to the mix. (Telephone systems are introduced in Chapter 2.)
After you establish access, you can make and receive calls to and from the
PSTN. That’s when recurring usage charges kick in. (Just when you thought
you were safe!) Usage charges for consumers are based on two factors:
Total length of the call in minutes
Calling service category
Timing the call to calculate your usage charges is pretty simple: Multiply the
total time in minutes by the rate per minute. Although this is considered
simple math, few people time their calls. This is especially the case when the
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calls originate at work because we all think “it is a business call and the company pays for it.”
The other factor, the calling service category, presents a more complex challenge because few people know or care to know the differences among calling
service categories. There are five such categories, four of which relate
directly to your toll usage charges each month. A description of each is
coming up next.
Service Categories Cost You Big Time
If you’ve ever tried to read your monthly phone bill, you know that the
system of charges for traditional phone services is virtually incomprehensible to the average person. One of the big benefits of VoIP is that it makes the
POTS-PSTN model, together with its complicated billing structure and weird
terminology, just go away. Traditional carrier services, unlike VoIP telephony,
are heavily regulated. That’s why you get a phone bill with more small print
than the phone book, filled with monthly line-access charges, per-minute
usage charges, service charges, taxes, and special fees all applied to the
number and type of individual lines your company or family uses.
To add to the confusion, under the PSTN model used in the United States,
recurring service charges are tiered into service categories. The service categories were developed over the years by the telecommunications industry
along with the Federal Communications Commission (FCC) and the various
states’ governing authorities.
After your phone company charges you line-access costs and for any call features you add to each line, they bill you for per-minute usage charges based
on your service category. Each phone line you use may be billed for any of
the following five service-charge categories:
Local
Intralata
Intrastate
Interstate
International
Figure 3-1 provides a bull’s eye diagram of the five service-charge categories,
organized by the degree of regulation. At present, international service is the
most highly regulated category. Interstate is the second highest in terms of
regulation. Intralata and intrastate come in third in terms of degree of regulation. Local service continues to be the least regulated.
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But higher regulation and longer distances don’t necessarily mean higher
cost anymore. Interstate is more regulated than intrastate and intralata, but it
is much cheaper on a per-minute rate basis. For example, a corporate customer calling from Pittsburgh to Los Angeles (longer distance) might pay $.02
per minute. A call from Pittsburgh to Philadelphia (shorter distance), on the
other hand, could cost anywhere from $.06 to $.62 per minute.
In the POTS-PSTN way of doing telephony, more regulation translates into
more add-on service charges per line. Under VoIP, you can eliminate all regulated fees and charges because VoIP is totally nonregulated.
It is virtually impossible for VoIP to eliminate all charges for phone service.
For instance, if you are a consumer, I recommend at least one POTS line in
the home for 911 service and other local calls. Local ordinances require businesses to have at least one POTS line for fire control and 911. Your primary
goal is to reduce or eliminate the recurring monthly costs with the other four
service-charge categories, and your secondary goal is to reduce your local
service costs. With VoIP, you can accomplish these goals by making most or
all toll-related calls on-net. But until the rest of the world converts to VoIP,
you still need some connectivity to the local calling area using POTS.
International
Interstate
Intrastate
Intralata
Local
least regulated
moderately regulated
Figure 3-1:
A bulls-eye
view of
regulated
charges.
moderately regulated
highly regulated
most highly regulated
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PSTN service categories a.k.a.
The carrier services industry established the five regulated service category names. Of the five,
only local and international have stuck without any a.k.a.’s. The other category names are confusing and unclear to the average person, so other terms have emerged:
Intralata: local toll, intralata toll, regional toll; local long distance, regional calling
Intrastate: in-state, interlata, state toll, in-state calling, long distance (usually incorrect, depending on the context, but frequently used)
Interstate: long distance, LD, state-to-state, toll-calling services, calling across state lines
Paying the local piper
So you went out and got yourself a local-access line for your home or a slew
of access lines for your business. Just how much do you pay for the local
calls you place on those lines? Figuring out those costs is a little complicated.
The local rate category refers to the immediate geographical area, usually no
more than a one- to two-mile radius from the telephone from which you’re
placing a call. Your LEC may try to make the local calling service appear to be
free, but the fees are built into the monthly line charges.
Then there’s the tricky bit about what exactly constitutes a local call. The
LEC’s customer-service people can readily specify what your local calling
area includes, if you ask. But they are not required to make you understand.
You have to ask them to put it in writing or refer you to existing documentation that defines the local calling area for your area. Also, if you live in a
larger metropolitan area (such as New York, Pittsburgh, or Dallas), the directories provided by your LEC have maps that indicate what areas and prefixes
make up the local calling area.
Why do you need to know your local calling area, anyway? Because not knowing can cost you big time. Today, if you’re a residential customer, most LECs
provide free local calling service. The LEC calls this unlimited local calling.
People tend to interpret this as unlimited free calling within their local area.
But you want to know a secret? LECs earn the greatest revenue on local calls
that terminate in the local toll, regional, or in-state toll calling areas.
Most callers do not know the difference between local unlimited calling areas
and local toll calling areas. The term local toll is ambiguous (and should be
outlawed). As a result, customers often think they’re making free, local calls
when in fact they’re paying recurring minute usage charges for what amounts
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to intralata or intrastate calls. Because these “hidden” charges don’t turn up
until their next monthly bill, they may not realize this is happening until it is
too late. Because the LEC is making more money from this lack of awareness,
don’t hold your breath waiting for them to clarify it for you.
For example, from my Pittsburgh downtown residence, I can call anywhere in
the immediate downtown area for free, and each call in this local area can
have an unlimited amount of minute usage with no extra cost to me. But
whenever I make a call to my doctor’s office in Murrysville, a Pittsburgh
suburb 19 miles away, I am charged $.12 per minute. Hence the puzzling term
local long distance.
Do not be misled by all this unlimited, free, local call mumbo-jumbo. If your
local service is free and unlimited, it is because the LEC has every hope that
you will make lots of calls just outside the local area. Then they can hit you
with intralata toll charges and laugh about it all the way to the bank.
If you’re a business, the problem is even more acute and costly. Businesses
must pay recurring charges for calls in the local calling area. If you work in a
business with multiple lines, every PSTN outbound call placed on your business telephone is charged a variable per-minute rate based on the destination of the call. In the Pittsburgh region, for example, businesses often pay
$.05 per minute for calls in the local calling area. If you add the total cost of
each POTS line to the total minute charges for all the local calls made on
each POTS line in the company within a given month, you can begin to see
exactly how much you’re dishing out for what you thought was a free local
area call.
Even if your company uses higher bandwidth transport lines (covered beginning in Chapter 4) with an in-house telephone system, some LECs consider
local calls from this type of line to be running on POTS-equivalent lines. With
that little semantic sleight of hand, they still charge you the local recurring
usage charge on a per-line basis.
Going the distance with intralata rates
Intralata refers to calls that terminate outside the local calling area but within
your local access and transport area (LATA). Unfortunately, most people
don’t know the boundaries of either their local calling area or their LATA. If
they did know, they could manage their intralata calls and charges much
better.
It used to be that if you leased an access line from the LEC, they automatically became your toll-call carrier. Today, customers can choose what carrier
they want for calls made outside the local calling area. If you don’t select an
intralata carrier when you begin the lease of your local access line, though,
you automatically inherit the LEC as your intralata carrier.
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Say you’re in Pittsburgh and are calling your son, who is at school at Penn
State University’s local satellite campus eleven miles away. Such a call
crosses local calling areas within the Pittsburgh LATA, making it a call in the
intralata service category.
First the call goes into your carrier’s nearest switching facility. Based on the
area code and prefix of the number you dialed, the call gets routed over the
PSTN to the carrier’s destination switching facility. From there, the call is sent
over the PSTN to the facility and switch that terminates your son’s line. Then
the call goes to your son’s line and the actual telephone attached to his line
in his dorm room. The telephone rings, and when your son answers the
phone, a session is established for the call’s duration. As a consumer, you
pay a hefty per-minute charge for this type of intralata call.
Intralata calling for consumers is expensive in comparison to local calling
rates. Also, consumers have little choice in intralata calling plans. It’s always
a per-minute rate that can change as the distance between endpoints
involved in the call increases or the availability of carrier facilities increases
outside the local calling area. If you or your company plan to stay on POTSPSTN telephony, ask your carrier to give you (in writing) the boundaries for
each of the five regulated service categories.
For example, the call to my son is a higher rate than the call to my doctor in a
suburb of Pittsburgh, even though this suburb is farther away. Why? The call
to my son must travel over rural areas where the carrier has less up-to-date
facilities and must use more expensive, slower, alternate routes.
But both calls would usually be less than a call to Philadelphia, which is still
in the state of Pennsylvania but farther away from my local calling area than
either my doctor or my son’s campus near Pittsburgh. The cost of a POTS call
usually increases for the consumer based on the distance of the call — outside the LATA. For a business using POTS, it may increase, be a flat rate, or be
free, depending on what type of service level agreement exists between the
business and the carrier.
Intralata calls are carried the same way for consumers and businesses, but
businesses can negotiate intralata rates with their regional (that is, intralata)
toll carrier. (Consumers can merely select a carrier and live with the perminute rate they are assigned.) The carrier can offer businesses a bundled
deal based on the anticipated yearly volume of minutes and the amount of
minutes the company is willing to commit to.
Carriers can offer business customers flat nonrecurring rates. For example,
they can offer a flat rate per call with no recurring minute charges. In this
way, the carrier is selling intrastate carrier services like the LEC sells local
carrier services. Sometimes you can fashion a long-term deal based on the
monthly volume of call minutes. Because carriers are eager to get longerterm contracts, they make those deals look very attractive. But don’t be
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misled: Rates and call volumes change over time. If you’re locked into a longterm deal, it may not look like such a deal after several rate hikes.
If your company fails to reach the projected volume it commits to in a
monthly, yearly, or even longer-term deal, you’ll usually incur penalties. Make
sure you check the fine print on any agreement.
How can VoIP help you with intralata charges? It varies depending on
whether you are a consumer or a business. If you are a consumer, you would
enter into an agreement with a VoIP carrier. You would pay a flat charge per
month to call anywhere outside your local calling area.
If you are a company with multiple locations in and around one or more LATAs
and your locations are connected with a VoIP network, all the calling that goes
on between these various locations is free of recurring carrier service charges.
When one location needs to call someone off-net at a distant location, the call
can be carried on-net as far as possible before it goes off-net.
Intrastate service rates
The next service category is intrastate, which involves carrier services for
calls outside the LATA but inside the boundaries of the state where your local
access line is installed.
As with intralata, if you tell your LEC nothing about which intrastate carrier
you want to use when you begin the lease of your local access line, you automatically inherit the LEC as your intrastate carrier. Intrastate services are
basically the same as intralata services except they cover a much larger geographic area. Intrastate is sometimes called interlata because several LATAs
are situated in any given state.
If you’re a consumer, you’re probably paying an intrastate per-minute rate for
all your in-state calls with destinations outside your specific LATA. If you’re a
business, your carrier services company probably set up some kind of plan
based on a flat rate with a certain minute-volume or number-of-calls commitment level.
Carriers that own their telecommunications network infrastructure are better
equipped to offer you bargains on in-state calling if you sign a long-term deal
with them for both local and intrastate carrier services. Carriers that lease
lines from larger carriers and then resell carrier services to you have less
flexibility.
Many carriers offer a flat rate for in-state calling. In Pennsylvania, for example, some offer flat rates with no recurring charges. But if you’re not using
VoIP, read the terms of the deal carefully. Does it start out as a recurring perminute charge and then metamorphize into a flat rate only after you’ve used
(and paid for) a certain number of minutes?
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Planned confusion
Intralata and intrastate are among the most misunderstood rate categories. It’s no surprise that
LECs want you to stay confused. Companies
with multiple locations across different LATAs
are the hardest hit by charges in these two categories of carrier services. I’ve worked with
some clients who rationalize these charges as
normal business operating expenses that they
can write off. That’s true, but you’re still throwing money out the window. Newer technologies
such as VoIP can make mincemeat out of
intralata and intrastate recurring charges. If
you’re not ready to use VoIP yet, at least be
careful when it’s time to sign on with a new
intralata or intrastate toll carrier.
So how can VoIP help? VoIP has no recurring carrier service charge for calls
to locations around the state that are on your company’s computer network,
such as your branch office up north or your factory down south. Also, if you
have locations around the state on a VoIP network, you can place a VoIP call
through the location nearest to your calling destination. Your call would then
usually become a local call in that location’s calling area.
Interstate carrier service
Like Dante’s circles of hell, phone carrier services just keep spreading out.
The next circle of charges is interstate. Interstate includes calls to a destination outside the local calling area’s state but still inside the United States.
Interstate is sometimes referred to as calling across state lines or state-tostate calling.
More often than not, interstate calls involve more than one carrier. For this
reason, it is difficult for businesses (or consumers) to get any special deals
based on their usage. If your carrier doesn’t have facilities covering all these
types of calls from the point of origin to the calling destination, they lease
services from other carriers. These costs are passed on to the carrier’s customers (that’s you).
How can VoIP help you with interstate charges? For consumers it is basically
the same process as with intralata or intrastate costs. You pay a flat charge
per month to a VoIP carrier. These carriers have different levels of service,
but most permit you to make unlimited calls anywhere in the country for no
additional cost.
If you’re a company that has a VoIP network spreading across multiple states,
all the calling that goes on between the various locations is free of recurring
interstate carrier service charges and regulatory fees.
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Slamming
One time, my son Gabe, then age seven,
answered the phone. Someone asked, “Is your
mother home?” Gabe said “yes,” and the phone
went dead. We didn’t know what to make of it.
However, on our next month’s telephone bill, we
saw that our interstate toll carrier service had
been changed.
This happened in the era of slamming. Between
1996 and 2000, unscrupulous toll service carrier
salespeople would call consumers and trick
them into saying the word “yes.” After getting
the “yes,” these salespeople would hang up
and cut an order to have that consumer’s toll
services changed over to their company’s carrier services. When the LEC would question the
toll carrier’s service change request for that
customer, the toll carrier would state that the
customer said “yes.”
Now, carriers are no longer permitted to get
away with such unethical practices, and you
can safely change over to any long-distance
carrier you prefer and not worry about others
trying to switch you against your will. But turnabout is fair play, and these same companies
that slammed you at your dinner hour are now
facing a tough future. Over the next few years,
VoIP will probably eliminate the need for these
carriers or at least cause them to switch over to
a more VoIP-oriented line of service.
International carrier service
Last but not least is the service category known as international. International
service originates where you are and terminates in another country. This is
the carrier service category that is ripest for elimination by VoIP networks
because international carrier service is the most expensive per minute of the
five regulated categories. Among corporations that do lots of international
calling, it’s no surprise that a movement is building to deploy VoIP.
Remember our old friend regulation? Much of the cost of international calls
comes in the form of increased regulatory fees. In fact, more recurring regulatory costs are associated with international minutes than with any of the
other four categories of regulated service.
Companies can run a VoIP network globally. They can run a VoIP network for
domestic calls. Either of these network approaches can also have an attached
VPN (virtual private network). The VPN can support telephony calls coming
in or going out through the Internet. These network options would eliminate
most of the cost of international carrier services calling. Kind of makes you
want to open a branch office in Paris or Beijing.
VPNs use the carrier transport capabilities of the global Internet to support
mobile and global communications. VPNs started out supporting computer
data and e-mail back in the mid-1990s. Since then, VoIP has added telephony
to the list of VPN applications. I discuss VPNs in greater detail in Chapter 9.
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If your company doesn’t make many international calls, VoIP can still save
you a barrel of money in all the other domestic-based rate categories.
Summing up carrier services
Several layers of costs exist whenever you make a phone call due to regulations and the categories of carrier service. All five categories combine to
form the bulk of the monthly recurring charges for customers (both residential and corporate) under the existing PSTN model of telephony.
Carrier service companies do just about anything to keep their corporate
customers using their services. They try to make a strong business case for
your company to stick with them. If you’re unaware of the different rate categories, your company’s total number of access lines, and how each category
and line relates to your company’s particular telephony needs, it can cost
you big bucks each and every month.
Your carrier may try to reduce your per-minute rates across the board. In the
case of intrastate calling, they may offer flat rates that are not metered and
charged by the minute. However, the carrier wants some kind of commitment
from your company in return. The commitment can usually take one of two
forms.
The first form is a volume-of-minutes plan. In this form of the plan, your company, including all the locations connected through the carrier’s network,
agree to use a specific, aggregate number of minutes on their carrier network.
In this form, they always specify a term within which the minutes must be
used, such as ten million minutes per month or per year. Read the small print
regarding what penalties may apply if the company fails to meet the volumeminute quota in a given month or year.
The other form may relate to the total number of calls made irrespective of
the total aggregate volume of minutes across your company’s enterprise. You
can see this form when the company already has a flat-rate charging plan in
place. For example, instead of paying metered charges for local, intralata or
intrastate calls, a company might have a flat rate such as $.05 or $.06 per call.
The recurring minutes or total usage minutes become secondary as a cost
factor — with flat rates, the number of instances of placing calls are used to
figure your carrier service usage bill.
It’s also possible to have a plan that combines both minute-volume and flatrate plans into a sort of hybrid plan. The larger your company and the more
locations in different states, the more you’ll need a thorough analysis to
achieve the optimal plan if your company’s telephony needs are to be satisfied by a POTS-PSTN carrier.
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The biggest pitch that carriers use to get your signature on a multiyear service contract is to promise you deep discounts based on your company’s
overall calling volume in minutes. For example, if your company does several
millions of intralata minutes per month across all your company’s locations
and you’re paying an average of $.07 per minute, the carrier’s account representative might offer you a new deal that reduces your intralata costs to $.05
or $.06 per minute.
After you’re using millions of minutes, a $.01 change in the rate translates
into a lot of money. For instance, one million minutes at $.01 per minute
equals $10,000 of cost to your company in one month. That kind of savings
would sound swell — if you didn’t know that under a VoIP network plan you
would have little or no charges for intralata carrier services. In a VoIP network, all on-net traffic would cost $0, and any calls that must go into the
POTS-PSTN network would be reduced to local calls.
Your carrier account rep won’t want to tell you about the penalty if your company fails to meet the volume commitment in any given month. The penalty
could be an even higher per-minute rate than you had before the new deal or
an increase in the term of your contract by one month for every month that
you fail to meet the minimum.
If your company must stay on the POTS-PSTN carrier network, I suggest that
you consider evaluating VoIP, if only for a few telephones or one small local
area network at one of your site locations. If you already have the LAN running, your cost will be minimal. Let your POTS-PSTN carrier account rep
know that that you’re looking at VoIP, and see how fast it gets him or her to
come around with a new deal that seriously reduces your monthly carrier
charges. But don’t sign a long-term deal; as soon as you complete your VoIP
testing, you’ll want to put much of your company’s telephony on VoIP.
Saving with VoIP
If you’ve read the chapter up to this point, you’re a much more savvy POTSPSTN customer. You now know exactly how your carrier makes money at
your expense. You also know how the five regulated service categories can
combine to increase your monthly and annual telephony costs and therefore
reduce your revenue. Something that increases costs and reduces revenue is
something you need to control or change. VoIP can help you do exactly that.
So, how will you fare under a VoIP system?
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Good news for the family budget
Most carriers no longer apply service charges to residential accounts for
local calls, beyond the monthly recurring costs of the access line. All other
rate categories are billed on a per-minute basis. If you convert to VoIP for
your home phone, you typically have no recurring service charges for any of
the other services categories for calls outside your local area. This, in itself,
is a tremendous savings for anybody who does even a moderate amount of
nonlocal calling.
Because you must use broadband to get VoIP in your home, I suggest that
you pay the additional fee to keep your POTS phone connected to your
broadband service. Use the POTS phone for local calls and 911. When the
older PSTN catches up with the newer VoIP technology and can support E911
(enhanced 911) calling, you can drop the POTS connection. (With E911, your
contact and address information is transmitted along with your call to the
911 emergency center.)
Taking savings to the office
If you run a business, local-area calling-plan charges average about $.05 per
minute. Under a VoIP model, the cost of calls to the local calling area are the
only significant recurring usage charges you won’t get rid of — at least not
until the rest of the world adopts VoIP.
Even local carrier charges can be reduced under a VoIP model, however. You
can do this if you leverage volume by total minutes and make a contractual
commitment to the local carrier. Tell them you are going VoIP, and see how
quickly they will accommodate you. If most of your local calls are to other
offices on your company’s network, VoIP eliminates any recurring service
charges for those calls because this traffic is on-net.
It’s in the other service categories — intralata, intrastate, interstate, and
international — where your company can save the bulk of the usual monthly
service charges by using VoIP. Keep in mind that these monthly charges can
be huge. One of my clients had 367 locations across the country and 17 international locations, and a combined computer and telephone network billing
of $4.2 million per month. And 75 percent of the billings were telephony carrier services charges. That’s about $3.78 million per month for POTS-PSTN
telephone services. VoIP would eliminate more than 90 percent of these telephony charges because the company is already paying for its computer network. Under a VoIP telephony model, any company with substantial intralata,
intrastate, interstate, or international calling service requirements saves a
bundle of cash.
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Toll-bypass: Saving with calls
at a distance
The same VoIP cost-savings rationale for the international company
described in the preceding section applies to intralata, intrastate, and interstate calling carried on-net over a company’s VoIP network. Although the
costs on a per-minute basis for interstate have come down significantly since
the Telecommunications Act of 1996, a company with many locations across
many states can accumulate millions of minutes per month just to support
the communication that goes on among all its locations.
Did you ever take a plane trip only to find out you paid $500 more for your
ticket than the person next to you? Interstate per-minute charges for businesses today make airline ticket pricing policies look downright logical:
These charges run the gamut from less than $.01 to $.10 per minute.
Interstate charge plans for companies using the PSTN vary so much because
the plans depend on the minute-volume commitment and the plan’s term.
The longer the term a company agrees to, the better the current rate provided by the carrier.
However, under a VoIP approach, your on-net calls have no carrier service
charges. Therefore, you have no need for a telephony carrier services priceterm plan. Also, on-net calls eliminate the toll charges that come with all the
various calls to areas outside the local calling area. Because the calls travel
over your VoIP network, you don’t use the LEC’s facilities. A company’s
monthly carrier service charges for all on-net interstate calls made on the
company’s VoIP network total nada, nothing, zip, zero. You get the idea! This
benefit has become known as toll-bypass.
POTS-PSTN per-minute calling costs remain highest for international calling.
These costs can be eliminated or greatly reduced if international calls are
carried over your company’s private VoIP network. Much of the cost of an
international call comes from the huge regulatory fees that pile up as the call
moves along from country to country. But a VoIP network eliminates all those
fees. In addition, VoIP makes these recurring charges your favorite number
and mine: $0.
Add-on recurring costs
Tallying the costs of traditional phone service is like adding up the cost of
sending your kid through college. There just doesn’t seem to be an end in
sight to the charges. As if the access line costs and recurring carrier service
charges weren’t enough, you must deal with other monthly costs and regulatory fees. These payments, which go to various government entities rather
than to your LEC, are based on a percentage of each line’s monthly access
cost. Examples include the Federal line surcharge and the 911 fee.
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It may seem like these monthly charges are nominal but, just like the national
debt, they really add up. Just dig out your last phone bill and take a look at
the total cost. Depending on the location of your telephone lines (that is,
which LATA applies), these regulated fees typically total about 4 to 7 percent
of your total monthly access costs. A medium-size company with twenty locations, call centers at each location, and lots of calls across the United States
racks up a monthly carrier services bill of approximately $500,000. This company would be looking at add-on monthly recurring costs of approximately
$20,000 to $35,000. That annualizes out to $240,000 to $420,000. Final costs
depend on the LATAs involved and the specific types of access lines. But
these are add-on costs that do not need to be counted in a VoIP network; they
largely go away.
If you convert to VoIP, you’re still charged regulatory fees for your dedicated
network lines, but you already pay these costs to support your computer
data network. You do not have to pay them again because VoIP calls are carried on your computer network. There are no additional regulatory costs for
running VoIP telephony over your computer network. And with your telephony carrier services needs now being supported by your computer network lines, you can drastically reduce or eliminate the number and types of
lines your company needs to support the POTS-PSTN way of doing telephony.
Finally, we come to the calling features, such as voice mail, call waiting, and
call forwarding. The LEC charges for features à la carte, and if you’ve ever
ordered à la carte in a restaurant, you know it costs more. This is because
you pay for each individual feature (item) separately. For example, call forwarding might be a $5 per month per line charge on top of all the other
charges you pay.
Your LEC may be able to bundle features and leverage your company’s total
monthly usage minutes for all your lines to offer you calling features at a
lower cost. Be careful if the carrier asks you to commit to a more lengthy
term to achieve cost reductions; in the end, they may cost you more!
Most companies with their own internal telephone system provide their own
calling features. With pure POTS and Centrex line models, calling-feature costs
can have a big effect on your company’s monthly telephone bill. Remember
that features are priced based on each line. If your company has hundreds of
lines, the overall cost for all features for all lines can be astronomical. For
example, adding voice mail ($8), call forwarding ($5), and conference call ($4)
features to two hundred lines would cost your company an additional $3400
each month. Wouldn’t you rather hire additional employees or install a largescreen TV in the break room with that money? As you may have surmised by
now, VoIP comes with all the features of the POTS world, plus many new and
exciting ones. (VoIP call features are covered in Chapter 10.)
The bottom line? With VoIP, you can reduce your monthly recurring charges
by as much as 95 percent — and that’s a lot of money in anyone’s book!
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VoIP Savings: A Case Study
One of my clients in the Pittsburgh area has eleven locations distributed
across several local calling areas within two Pittsburgh LATAs. Five locations
are in the city itself. The other six are in the South Hills, with two inside
Allegheny County but outside the city, and four located to the south across
the county line in Washington County. The client spent enormous amounts of
money on phone service because an interoffice call between locations often
crossed intralata boundaries.
This company had a patchwork of standalone LANs at each location and a
few Internet dialup accounts. Each of their largest two locations had its own
phone system, but they defeated part of the potential benefit of those systems by running POTS access lines into them instead of higher bandwidth
access lines.
Moreover, the client had many additional access lines that did not terminate
at their own telephone system. They leased these lines like a consumer
would lease a POTS line, but they were paying business prices and did not
connect these lines to their telephone systems. The other nine locations had
basic POTS access lines. All told, ninety-one POTS access lines ran across the
eleven sites.
In addition, they had two LECs providing their access and eight toll carrier
service providers: The client received monthly bills from ten companies! The
client’s key people were stressed out just from all the bills they were getting.
They also couldn’t understand from the bills why they had such high
charges. Some of the locations were less than ten miles apart but had the
highest recurring charges each month.
Analyzing the client’s usage
When I came on the scene, I analyzed their monthly billings for the past three
months. I found that their total average monthly billings for intralata services
came to just under a whopping $11,000 per month, or a projected annualized
billing of $130,000. Intralata recurring charges were about 63 percent of their
total monthly telecommunications bill.
At our first meeting, I passed out a spreadsheet which detailed their current
costs and compared them with the probable costs associated with my recommended solution. See Figure 3-2.
Before we began to review the spreadsheet, I asked, “What do you see as
your number one challenge?” Their answer? Customers complained that they
got busy signals every time they called. Their second most important concern was that only one of their eleven sites had high-speed Internet access.
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Five sites used dialup Internet access, but this service did not come close to
what their customers and suppliers thought they should have. Also, when
the sites that did have dialup were online, no one could call in through the
POTS lines. You would think that for what these folks were paying they would
have had the best telephony service and Internet access money could buy.
Instead, they were spinning out of control, and they were ready to listen.
Figure 3-2:
Monthly
recurring
and access
charges
before VoIP.
POTS access lines (72 @ $65)
PSTN usage (not including Intralata)
PSTN intralata usage
T1 Internet (line and access)
$4,680
$690
$10,800
$995
TOTAL
$17,165
The VoIP solution
I designed a VoIP network that provided a dedicated access line between the
two main locations. These sites were seven miles apart but in different counties and therefore different LATAs. We put in digital subscriber line (DSL)
access at the other nine locations.
DSL was a no-brainer because these sites already had at least two access
lines. Because local ordinances require that all businesses have at least one
POTS line for emergencies and fire control, we used one of the existing POTS
lines for that requirement with no additional cost. Also, because DSL requires
that you to have an existing POTS line in operation, it was simply a matter of
having the LEC upgrade one POTS line at each location to include broadband
DSL service. Figure 3-3 shows their VoIP network.
We selected one carrier for all local and toll-related carrier services. (You
could almost hear the sigh of gratitude just for eliminating all the different
monthly bills.) Before VoIP, their combined monthly recurring access and
usage charges averaged more than $17,000. In the first month of operation
under VoIP, these charges dropped to just over $2100. Most of this savings
resulted from reduced intralata costs and the elimination of access lines.
The dedicated T1 line enabled us to provide a high-bandwidth private-access
link that bridged the intralata boundary between their two main sites. The
private line made the two intralata areas one.
Calls originating from any of the sites in the city destined for any of the sites
outside the city were routed to the main site within the city, transported over
the private VoIP line to the out-of-city main site, and forwarded to the destination telephone. As a result, all on-net calls were treated like local calls for
billing and bypassed the regulated intralata charges.
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PSTN
PSTN
Norstar ICS
Access gateway
VoIP
Access gateway
Norstar ICS
Dedicated
point-to-point T1 line
Tier-1
Internet/WWW
Figure 3-3:
VoIP comes
to the
rescue
for one
company.
Router DSL
gateway
PSTN
DSL Router
gateway
Router
POTS lines
10/100 Mbps
PSTN
Router
SHIVA
POTS lines
SHIVA
Ethernet
Ethernet
South Hills
724-881-XXXX
Pittsburgh
412-531-XXXX
10/100 Mbps
Satellites
in suburbs
Satellites
in city
As mentioned, the main site in the South Hills had Internet service, but none
of the other ten sites could access it. In the second month, we used some of
the money they were saving to put in an Internet gateway in the South Hills.
Now every location could access the Internet through the company’s VoIP
network.
By the second month of implementing VoIP, their intralata toll service
charges had dropped to $184 because all interoffice voice traffic was now carried on their private VoIP network instead of the regulated PSTN. Moreover,
they could now understand the single bill that covered their entire VoIP network services; this alone brought sanity to their operation. In addition, all
eleven locations could now access the Internet. They were already beginning
to plan their Web site design and working out processes with their suppliers
to use several e-commerce applications that were not possible before VoIP.
Some startup costs were not exactly inexpensive. However, their savings
from VoIP more than covered these costs with money left over. Figure 3-4 is a
breakdown of what it cost to bring VoIP to their enterprise.
Applying VoIP to your situation
The moral of this story? If your company has facilities distributed across
more than one local calling area within the same LATA, look at your intralata
toll charges. If all your sites switched to VoIP, you’d eliminate most, if not all,
intralata charges you currently incur.
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One-time startup charges
2 IP access gateways
$6,000
2 DS1 (T1) interface cards
$5,000
2 routers w/gateway and Ethernet interface
$6,000
TOTAL
$17,000
Monthly recurring charges
Figure 3-4:
Monthly
startup and
recurring
charges
after VoIP.
POTS access lines (22 @ $65)
$1,430
T1 line
$481
DSL service (9 @ $79)
$711
Internet access, main site
$995
PSTN service (not including intralata)
PSTN intralata service
$2,646
$184
TOTAL
$6,447
In addition, you may be able to add services you never thought possible and
pay for the services through your savings. In the case of my client, the VoIP
network saved them more than $9000 per month even after all startup costs
were paid. In addition, they expanded dedicated Internet access to all their
locations, upgraded their telephone systems to support VoIP, and acquired
needed equipment to make the changes. At the end of the first year under
VoIP, their annualized savings were just under $112,000. In short, they got
greater service and spent a lot less money. Figure 3-5 summarizes the costs
and savings over the first year for this VoIP conversion project.
Figure 3-5:
Summary of
annual
costs and
savings
after VoIP.
Recurring costs pre-VoIP
Monthly access and usage
Annualized total cost
$17,165
$205,980
VoIP Start-up Costs (1-time)
$17,000
Recurring costs post-VoIP
Monthly access and usage
Annualized total cost
$6,447
$77,364
Startup costs recovery period
2 months
First year savings after costs
Monthly
Annualized
$9,301
$111,616
Do you already have a computer network connecting all your sites, or can
you readily upgrade to connect all sites? If so, the cost of going to VoIP is
greatly reduced because VoIP operates on the same network as your computer data.
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Part II
Taking VoIP to
Your Network
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In this part . . .
et ready for a mind-bending tour of how you can
integrate voice with your data network through the
magic of VoIP. In this part, you discover an expansive view
of networking, and how you can take advantage of all the
benefits that VoIP has to offer.
Chapter 4 provides a road map to the different methods
through which VoIP can be implemented. The chapters
that follow look at virtually every method you can imagine: circuit-switched networks, broadband networks, dedicated networks, wireless networks, and the Internet. Each
chapter provides all the details you need to determine
which network type is right for you.
Finally, Chapter 10 discloses how to use telephones with
VoIP. You find out about the latest VoIP-enabled phones,
and also see whether you can use your existing phones
with VoIP.
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Chapter 4
Road Map to VoIP Transports
and Services
In This Chapter
Recognizing the abstract world of CSIs
Understanding transports
Uncovering the five carrier service infrastructures
Fitting VoIP and the Net in the CSI structure
L
et’s face it — telecommunications can be daunting to those who have not
given much thought as to how their voice gets from their phone’s handset
to their Aunt Matilda in Dubuque. Be that as it may, the technology between
you and Aunt Matilda is simply amazing.
This chapter introduces you to the wonderful world of networks, transports,
and transport services. Here you discover what a CSI is (besides a great family
of television shows) and why you should even care. Before you are finished
with this chapter, you’ll have a good grasp of things you didn’t even know
you needed to grasp. (Spooky, huh?)
This chapter lays the groundwork for Chapters 5 through 8. Here you find the
conceptual framework that lets you make sense of different ways of transmitting data, such as broadband, dedicated lines, and cable. You also discover
why packet-switched communications methods are much better than traditional circuit-switched methods.
If you don’t want to take a peek behind the curtain of telecommunications,
you don’t really need to read this chapter — and you don’t even need to feel
guilty about it! That’s not an effort to discount the information provided here,
but a recognition that the information may not interest everyone. You can
safely skip this chapter and come back to it later when you finally develop
a healthy curiosity as to why things work the way they do in the telecom
world.
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CSI: Telephony
All types of networks operate within a much larger structure known in the
telecommunications industry as a carrier services infrastructure (CSI). The
carrier services infrastructure is an abstract concept for most people. As you
begin to discover the various VoIP network types (such as DSL or a T1 line),
it’s essential to know about each network type’s underlying CSI. Whatever
network type you may choose to use for your VoIP, it is always a subnetwork
of a larger CSI.
Figure 4-1 identifies the CSIs. We get into the details of each CSI later. For now,
just focus on the fact that there are five CSIs through which all public and private communications travel.
Switched
Figure 4-1:
The five
types of
CSIs.
PSTN
switched
DS
dedicated
OC
dedicated
HFC
dedicated
The different CSIs are theoretically owned by the carrier companies that
lease the various network transports and services. But in reality you can’t
own something that exists largely in abstract terms. A good analogy is the
National Football League. Is it owned by the NFL? We could say that it is. But
to be more correct, we might say that it’s owned by all the teams that make
up the NFL. And an individual NFL team exists by virtue of the NFL granting
(selling and approving) a team franchise.
Truth be told, the NFL doesn’t own much of anything in the physical sense
of the word. Football fields are owned by their respective teams. NFL players
are said to be owned or at least under contract by their specific team.
At the same time, the NFL is not totally out of the picture. We hear lots about
the NFL regarding regulatory measures and enforcement actions they may
take against teams and players in the NFL. The NFL sets the rules for all teams
to operate collectively. All the football stadiums together, with the players
and the games they play, form the NFL.
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Chapter 4: Road Map to VoIP Transports and Services
Like the NFL, CSIs are not owned by any specific carrier company. Each carrier has a certain amount of physical network transports (lines) within one or
more of the CSIs. Today, more than a thousand different carriers operate in
the domestic United States. Many are local and regional. Others are national
and even international. Like the various NFL teams, the carriers compete with
other carrier companies for business from the corporate marketplace as well
as the consumer marketplace. They do this by leasing transports and network services from a given CSI to their customers. Everyone needs carrier
services and most companies have a diverse set of telecommunications needs.
All five of the CSIs relate to the telecommunications industry, but each CSI
contains different types of network lines and services. In the case of the wireless CSI, which ultimately uses lines at its core, there are no lines for the customer in the physical sense of the word. But there is a frequency spectrum
and frequency channels, just like the various station channels that operate
on radio.
It pays for you to know your VoIP network options across all five CSIs, but
don’t expect your carrier to keep you up-to-date. If you’re near your contract
renewal anniversary, you most likely will hear from several carriers about the
latest and greatest services now available. If you’re currently using a nonVoIP
carrier company, your carrier won’t have much of an incentive to talk to you
about VoIP because it significantly reduces your dependence on conventional
telephony networks.
Choosing a Transport
CSIs are made up of network transports (lines or channels) and the carrier’s
equipment used to terminate these lines. Each CSI has multiple carrier transports to offer any customer.
A transport is a physical or wireless channel (or aggregate of contiguous
channels) that supports the transmission of electrical, optical data, telemetric data, voice, or video signals.
Wow! That’s a mouthful. It really is easier to just think of a transport as a
physical line. In the case of wireless communications, the transport is a channel that corresponds to a unique frequency assigned to your cell phone or
PDA. Currently, more than fifteen transport types are available.
With so many transports to choose from, how is anyone supposed to
decide which to use? Cost and bandwidth become large factors in any CSI or
transport-related decision. This is true whether you’re a large company with
offices all across the country, a single location with a large campus-like setting
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of many buildings, a single location with one or more floors, or just a residential customer looking to reduce your monthly telephone bill and improve your
Internet access. Ultimately, deciding what transport to use becomes the key
decision point for any network, including VoIP.
To better understand transports, consider the T1 transport, easily the most
popular dedicated transport in the corporate sector. It’s not unusual for companies to have many T1 lines throughout their private network. One reason
that T1 lines are popular is because the bandwidth they provide can be optimized using dynamic channel allocation. This means a T1 line can be subdivided into twenty-four smaller bandwidth channels. These channels may be
assigned to a bandwidth pool that supports computer data, VoIP, and video
traffic. The terminating equipment for the T1 line can assign, at the moment
needed, a specific channel or group of channels to bring up a VoIP telephone
call or a videoconference call. When the need is over, the channels are
returned to the bandwidth pool.
Dynamic bandwidth allocation is not available on all network transports. This
is one of the reasons why it is important to know what type of transport or
transports you’re planning to use. Your carrier may or may not make these
points of distinction in a transport leasing deal. Dedicated (private) transports are not owned by the customer; they’re leased and there is a monthly
access charge based on the distance from point A to point B. But the higher
cost of dedicated transports is well worth it.
An important rule to follow when selecting network transports is to start with
the question “What will we be using the network for?” This leads to a discussion of uses for network transports. These applications (uses) are called
transport services.
Any transport can be used for one or more transport services. A POTS line,
for example, is used for telephone services. Many customers use a POTS line
at home for computer modem dialup services or to support broadband DSL
services. As a result, a POTS line running DSL can support VoIP telephony in
the home.
A T1 transport is often called private line service because it’s dedicated to
the customer’s use. None of the carrier’s other customers or customers of
other carriers can share the line. The customer may run all sorts of applications (transport services) on the T1 line. These applications may include
computer data, VoIP telephony, and videoconferencing.
VoIP is considered first and foremost a transport service. VoIP runs on many
of the same transports that support computer data and video. It uses packetswitching protocols to support telephony services, so it has the potential to
eliminate or replace older transports and services that can’t integrate data,
voice, and video on the same transport.
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The carriers of the future need to incorporate VoIP and related products and
services into their business offerings. The most successful carriers are those
that not only include VoIP but can lease VoIP services out of two or more of
the five CSIs.
The Five Golden Rings of CSI
It’s useful to understand from which CSI a network transport service comes.
The CSI to which a transport service belongs affects the way in which that
transport service is implemented. Figure 4-2 shows the five types of CSI,
along with popular transports and VoIP transport services.
DS
dedicated
PSTN
switched
T1
POTS
line
Figure 4-2:
CSIs with
popular
transports
and
transport
services.
OC
dedicated
DSL modem
Level 3
fiber-optic
switch
HFC
dedicated
OC-3
Splitter
Router
Switched
HFC
line
TV
Ethernet
Ethernet
VoIP
phone
Wireless
Cable
modem
VoIP
phone
VoIP adapter
Private VoIP
POTS
telephone
Private VoIP
Broadband CM
VoIP telephony
VoIP
pocket PC
As an example of how a CSI and transport can affect a transport service, consider the case of VoIP. An integral part of VoIP is the concept of transmitting
voice packets over the transport. But each CSI, each transport, and the VoIP
transport service provided therein support voice packets differently. This is
because each CSI operates with different underlying protocols.
A transport line on the PSTN CSI, for example, is a limited bandwidth, circuitswitched medium that can support telephone services. A T1 transport is a
much higher bandwidth line out of the DS CSI that can support many transport service applications that use packet-switching protocols. Although VoIP
works under both the PSTN and DS CSIs, the faster T1 transport on the DS CSI
affects the efficiency with which VoIP operates. If you’re thinking about using
VoIP or have concerns about the operation of your existing VoIP, evaluate
your network transports and transport services, paying particular attention
to which CSIs are involved.
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The following sections examine, in some detail, the various CSIs available,
along with how VoIP works in relation to those CSIs.
The PSTN CSI
The public switched telephone network (PSTN) is the oldest CSI, actually
beginning with the work of Alexander Graham Bell in the late 1800s. I won’t go
into too much detail about this CSI’s history because I cover it in Chapter 2.
Over the years, carriers have been installing, expanding, improving, and interconnecting various parts of the PSTN. Compared to all other carrier service
infrastructures, the PSTN is the largest.
It was under the PSTN CSI, on a POTS transport, that VoIP first started —
and it wasn’t pretty. The inherent bandwidth limitations and circuit-switched
protocols required by POTS impose clear limitations when it comes to the
packet-switched requirements of VoIP. These limits were discovered by accident in the first VoIP call made by a pair of Internet hobbyists in 1995. Figure
4-3 illustrates how the PSTN was related to the Internet and the first VoIP call.
Packet switched
Internet
Circuit switched
PSTN
POTS line
POTS line
Dialup modem
Dialup modem
Figure 4-3:
The first
VoIP call
utilized the
Internet
through
the PSTN.
Computer
Computer
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The earliest VoIP experiments were not pretty by today’s standards. But by
the late 1990s, VoIP was being viewed by dot com startups, the carriers, and
even several telecommunications equipment manufacturers as having great
potential for the future of packetized telephony.
Even though VoIP can work over the PSTN for a single call, it’s not a viable
solution for large companies that need to make multiple calls at the same
time. Quality of service (QoS) quickly comes into play, and dedicated lines
start becoming the minimum level at which sufficient QoS can be achieved.
The PSTN CSI doesn’t provide dedicated lines, so it doesn’t provide a suitable
solution for robust VoIP.
Poor QoS in the PSTN CSI is caused by the inherent bandwidth limits of POTS,
the circuit-switched protocols used on the PSTN, and the fact that the number
of switching hops in a POTS call add too much overhead into each and every
packet in the transmission. This overhead, more than anything else, is the
major culprit.
That said, if you are an individual (not a company), and you want to run only
a single line over VoIP, you can get satisfactory QoS using a regular broadband connection such as DSL. Better still, this makes VoIP quite affordable
because the cost of DSL is relatively low these days. However, using such a
transport for VoIP is not reasonable for larger businesses that need better
QoS for larger numbers of calls.
The DS CSI
In 1964, the carriers began channelizing and aggregating analog inbound telephone calls onto digital, high-bandwidth transports. The digital service (DS)
carrier service infrastructure was born. The type of wiring used for DS transports was copper, like the PSTN transport lines in the PSTN. The DS transport
lines, however, were of a thicker gauge and were capable of sustaining higher
bandwidth capacities. The carrier often referred to DS type transport lines as
“high-cap” T1 lines to distinguish them from other types of copper transport
lines in the PSTN. Today most T1 transport lines are provided using fiberoptic lines.
Because of higher bandwidth capacities, transports under the DS CSI are terminated differently than lines in the PSTN CSI. This is in part what led to the
designation of DS lines as being dedicated. Unlike PSTN transport lines, which
potentially could be terminated and switched out all over the CSI prior to connecting to their destination point, DS transport lines were installed to provide
a direct connection between source and target destination points.
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DS transports do not share any switching points with other customers in
the carrier service infrastructure. For this reason, after a DS transport line is
installed, it is said to be “nailed up” for that customer’s use only. This direct,
nailed-up connection enables not only higher bandwidth, but also much
greater throughput and no contention from other parts of the CSI.
Contention occurs when a number of users try to use a limited number of
resources at the same time. In a public network, all users vie for a limited
amount of bandwidth. That’s why you get the “We’re sorry, but all circuits
are busy now” message periodically. A dedicated DS line has no contention
because it has no other users — it is your line and your line only.
VoIP transports can be dedicated
When Ethernet LANs were standardized in the late 1980s, a huge demand
emerged from big multilocation companies wanting to connect their LANs in
a wide area network (WAN). Many had hundreds or thousands of locations,
each of which was running its own Ethernet LAN. Back then, networks had
strictly a computer data context (VoIP had not yet been discovered).
In response to customer demand, the telecommunications industry provided
frame-relay transport services, one of the most important transport services
to come out of the DS CSI. Frame relay takes the frames on the LAN side destined for another location on the WAN and packetizes them for transport over
the WAN. Today, 86 percent of corporate America continues to use framerelay for computer data service.
A frame is just another word for a data packet. Technically, a frame is a data
packet on a local network. Only when the frame is encapsulated for transfer
over nonlocal networks (see Chapter 1) does a frame become correctly
referred to as a packet.
Frame relay is losing ground to DSL because DSL is now available at commercial bandwidth levels. But frame relay still appears to be the transport service
of choice when it comes to interconnecting large, multilocation, data-only
LANs. Usually all sites are connected with a T1 or T3 transport line, but
under frame relay they do not always operate with the line’s full capacity.
Thus, their bandwidth is purposefully throttled by the carrier to provide
frame-relay service through what would otherwise be a very large “pipe.”
The carrier charges a monthly access fee for the transport line itself. In addition, charges are paid monthly for the transport usage in a frame-relay network. This charge is for port speed, which is based on the number of channels
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(versus the entire transport line’s capacity) that the customer uses. Therefore,
it is not uncommon to see a lot of fractional T1 (a T1 line that uses only a fraction of the total twenty-four channels) services in a frame-relay network. The
good news is that any frame-relay network can be updated cost-effectively to
support a dedicated VoIP network because the T1 or T3 transport lines are
already in place.
The DS CSI’s two most popular transports are the T1 line, which has 24
DS0 channels, and the T3 line, which has an aggregate capacity of 672 DS0
channels. (DS0 channels are 64 Kbps channels, as described in Chapter 7.)
Because DS transports are dedicated and channelizable, the T1 and T3 transports work well with VoIP. On a dedicated transport, specific channels on
the DS line can be allocated to VoIP calls when needed and returned to the
DS transport’s channel pool when not needed. As a result, DS transports
can be used not only for VoIP but also for integrated computer data and
videoconferencing.
Other VoIP transports
Many companies are finding the T1 line an effective transport for supporting
VoIP. The cost of a T1 line has dropped significantly in the past five years. It is
still priced based on total mileage covered, but with the emerging fiber glut,
many T1 lines can be leased to companies from the carrier’s excess fibertransport lines. When this occurs, the T1 line is said to be carved (multiplexed) out of the much higher bandwidth fiber-optic transport line. A
fiber-optic line has enough capacity for thousands of DS0 channels.
As mentioned, a T1 line provides twenty-four DS0 channels. If a fiber-optic
transport line is already in place, it’s just a matter of the carrier programming
their equipment to deliver the twenty-four channels to the customer. Figure
4-4 illustrates how a building containing multiple businesses typically gets its
transport access lines. The LEC delivers a single, huge bandwidth pipe, in
this case an OC-3. The OC-3 is then subdivided as needed to provide various
types of other bandwidth lines.
The LEC often installs a larger transport line and then throttles back what is
delivered through the line because the labor costs are about the same for any
dedicated line. The LEC’s logic is reasonable: Pull (install) the most effective
high-bandwidth transport possible. In this way, they position themselves to
support the current and future bandwidth needs of all the companies in the
building. The LEC expends labor costs once in return for many future bandwidth requests.
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PSTN
DS
OC
Three private T1 lines
OC-3 transport line
Figure 4-4:
Delivering
multiple
bandwidth
options to
a single
building.
The optical carrier CSI
The DS carrier service infrastructure gave us two important building blocks
that were used to further extend the capacity for supporting VoIP networks.
First and foremost, the DS network established that analog signals could be
regenerated in digital format. Second, the DS network established that digital
signals could be aggregated with other digitally regenerated signals in the
form of DS0 channels. Thus, the capability to channelize digital bandwidth
evolved. Dedicated channels have proven that they can support VoIP with
the same if not better quality of service that we have come to expect with
POTS over the PSTN.
With the DS series of standards established, a basis existed for specifying
how we might further scale and extend bandwidth capacities when the new
fiber-optic cabling carrier services infrastructure evolved. Compared to fiberoptic cables, the copper-based wiring of the PSTN and DS CSIs is much more
expensive to install and more prone to failure due to electromagnetic interference, weather, and the need to protect the wiring inside expensive conduits.
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Fiber-optic cabling uses laser light and is not as vulnerable to these elements.
Moreover, fiber-optic cable is more flexible and easier to install. And after the
use of fiber-optic cable reached critical mass, it became far less expensive to
install compared with nonfiber alternatives.
In 1982, the first fiber-optic cabling systems were commercialized. That same
year, MCI became the first telecommunications provider company to choose
fiber-optic cable to support its national POTS carrier network. Since the 1980s,
an entirely new, totally fiber-optic-based infrastructure has evolved. Known
today as the optical carrier (OC) CSI, it followed the template established by
the continuing development of the DS and PSTN CSIs. In addition, it further
extended the DS infrastructure by using dedicated and channelized bandwidth techniques. Not surprisingly, the former DS series of standards was
used as the model for determining how to calculate increases in bandwidth
thresholds over fiber-optic cable, how to extend the geographic coverage
areas (including areas not serviced by the DS network), and how to finalize
the standards for OC bandwidth threshold levels for the transport services to
be provided through the OC carrier services infrastructure.
When data network standards for LANs, MANs, and WANs were developed in
the mid-to-late 1980s and external transports were needed to interconnect
various LAN and MAN sites, both the DS and OC carrier services infrastructures were able to rise to meet this challenge. Beginning in the 1990s, carriers
elected to install fiber-optic cable whenever possible to supply the transport
demands of their customers. T1 and T3 lines formerly based on copper were
now being carved out of much larger bandwidth transports of the optical carrier CSI. Figure 4-4 is a good example of this.
VoIP transports go fiber-optic
In the early 1990s, the fiber-optic-supported ATM (asynchronous transfer
mode) transport service evolved. Before VoIP, ATM was the only dedicated
network type that integrated data, voice, and video applications on the same
network transport. Not long after the inception of ATM, some manufacturers
developed an ATM option that could be deployed for a LAN solution. But by
the time the design costs were calculated for the infrastructure, the overall
cost was higher than any other LAN solution available.
ATM ended up competing with Ethernet, and Ethernet won. ATM was developed on the communications side of the fence and Ethernet was adopted on
the data (computer) network side. In the beginning, Ethernet was not as fast
as ATM; it ran only on slow local area networks. However, over time, Ethernet
protocols were adapted to faster transports, such as T1 and T3. Over these
higher-speed transport lines, Ethernet was more economical because the
equipment to implement it was already in place on the data network side of
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the fence. In addition, the widespread adoption of Ethernet meant that the
necessary equipment became cheaper and cheaper because of the volume of
users. Thus, the need for ATM was simply “passed by” with Ethernet’s faster
lines and cheaper service.
VoIP runs on Ethernet LANs, and the savings from running voice and video
over the same ATM LAN was not enough to offset the startup costs when
compared to Ethernet and VoIP. Today, VoIP cost-effectively integrates data,
voice, and video on the same network with Ethernet as the LAN side of the
network.
Other VoIP transports
Ethernet is a given on the LAN side for any customer implementing VoIP.
However, one of the major decision points for any multilocation company is
what to use as the transport on the WAN side to connect all those locations.
In the 1990s, ATM running within the OC CSI had the competitive edge because
VoIP was not yet mature. Today, this has changed. VoIP can run on the LAN
side and operate very well with ATM on the WAN side. Or VoIP can run on
several other OC transport services without the need for ATM.
Nevertheless, ATM took off as a MAN and WAN solution for some companies
and most of the carriers during the 1990s. Today, ATM remains the major
transport service used by most network carriers. As a MAN and WAN transport service, ATM was hailed as the superior transport service in terms of
quality of service (QoS), speed, and the convergence of data, voice, and video.
ATM’s quality of service far exceeded the VoIP alternatives of the 1990s.
At the same time, however, ATM costs were high. Early on, it required a minimum of an OC-3 transport at each location. (A single OC-3 transport runs at
155 Mbps and is capable of delivering more than twenty-four hundred DS0
channels.) Because ATM was so expensive, its largest customer base would
continue to be the network carriers, who used ATM to build their architectural presence in both of the dedicated CSIs (DS and OS). The carriers used
their ATM networks to lease or sell other data, voice, and video transport services to their customers. Many today use their existing OC service networks
to carry the emerging traffic from a fast-growing VoIP marketplace.
Any sizable WAN network running ATM service no doubt has made a large
investment in the cost of ATM-related equipment and transports. The good
news is that you can run VoIP over such an infrastructure, leveraging the sunk
costs of an OC carrier network against the revenue coming from carrying VoIP
and other types of traffic. All LANs in your company have to be Ethernet, and
each LAN needs to be upgraded to support IP telephony.
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The hybrid fiber-coaxial CSI
When fiber-optic cable began to be deployed widely, the cable companies
started using fiber to build out their infrastructure. But by that time, much of
the coaxial cable infrastructure supporting localized connections had already
been established. This is why a large share of today’s cable customers have
coaxial cable coming into their premises from the nearby telephone pole.
The cable companies’ network is today known as the hybrid fiber-coaxial
(HFC) CSI. It combines the use of coaxial cable with fiber-optic cable. The
HFC CSI may one day be all fiber-optic cable. In its present state, it provides
not only cable TV services but also cable modem, one of the two popular
methods of broadband Internet access. To run VoIP in your home, you need
broadband service. If you have cable modem service, you can usually add
VoIP transport services with little or no additional expense added to your
existing POTS telephone bill.
The HFC CSI began to evolve in the 1980s as strictly a cable-television application. Companies in the business of supplying closed-circuit cable television
programming used satellite technology to capture both broadcast television
signals from far-off places and local TV signaling, and pipe those TV signals
through their cable-based infrastructure to consumers willing to pay for the
better quality and channel selection.
Companies in the cable TV business had to bear the cost of building out the
HFC infrastructure because there was nothing in place when they first got
started. The cable carriers utilized many of the inground conduits and telephone poles already in use by the OC and DS CSI carriers. They also built
buildings and facilities for terminating cable services. When the consumer
demand for broadband Internet access developed in the early 1990s, the HFC
CSI was in a reasonably good place to integrate Ethernet access — and therefore VoIP — within the home using their existing cable television network.
Today, broadband Ethernet running over the HFC carrier network has more
than twenty million customers and is growing rapidly each month.
The wireless CSI
Wireless telecommunications have been around for more than eight decades.
First we had the radio in the 1920s. During World War II, we had the inception
of walkie-talkies. These led to the development of cell division multiple access
(CDMA), one of the most popular carrier services supporting cell phone networking today. In the 1960s, the first wireless transports connected mobile
telephones using radio telemetry, which connected the caller (using radio frequency channels) to the circuit-switched PSTN.
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Wireless telephones used radio telemetry until the first cellular network towers
began to evolve in the early 1990s. The wireless telephones went through many
variations, with each iteration getting smaller, cheaper, faster, and better.
Wireless telephones first used analog modulation, then digital and hybrid
techniques — and even satellites.
How does VoIP fare with the wireless CSI? The jury is still out, but at this
point little can be done with VoIP over cellular networks. Why? Because the
cellular network, even though it goes over the wireless CSI, is essentially an
extension of the PSTN.
However, there are two exceptions to this. First, a computer could be running
a VoIP soft phone application (see Chapter 10), which allows the computer’s
user to be connected to a VoIP network and conduct voice conversations
through the computer connection. The computer’s connection to the Internet
or to a company’s WAN could be established through a cellular data service.
(Many cellular telephone companies are now offering high-speed data connections for their users.) In this case, VoIP is being operated through a cellular connection, which means it is going over the wireless CSI.
The second exception is for dual-use telephones, which can access both cellular networks (the wireless CSI) and VoIP over wireless computing networks.
These phones are able to place VoIP calls over a wireless data network when
one is within range, and over the regular cellular network when one is not.
It is easy to confuse wireless networking with the wireless CSI. They are not
the same. Wireless networking is an extension of Ethernet networking, and is
discussed in depth in Chapter 8. The wireless CSI is, today, the cellular network used predominantly for voice communications.
Summing up the CSIs
A CSI is like a highway system that lays out all the many roads that enable
people to drive to their destinations. Within our highway system, we could
characterize some roads as being large or wide, some roads as small or narrow,
and some roads as being between these two extremes. Roads may be further
broken down by type of surface, that is, asphalt, concrete, gravel, or dirt.
Similarly, we could characterize a CSI as having great amounts of bandwidth
capacity or limited bandwidth capacity; as single channel or multichannel; as
switched or dedicated; or as circuit-switched or packet-switched. Table 4-1
summarizes the overall state of CSIs.
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Table 4-1
Carrier Services Infrastructure Types and VoIP Services
CSI
Inception
Network
Type
VoIP
Transports
VoIP Service Options
Public switched
telephone
network (PSTN)
1879
Switched
PRI line
VoIP over PRI
DSL using
POTS line
VoIP over broadband
DSL (VoDSL)
Digital service
(DS)
1964
Dedicated
DS1 (T1),
DS3 (T3)
VoIP over private
dedicated network
channels
Optical carrier
(OC)
1980s
Dedicated
OC3, OC12
VoIP over private
dedicated network
channels
Used to provision other
dedicated transports
such as DS1, DS3
Hybrid fibercoaxial (HFC)
1980s
Dedicated
Cable fiber
VoIP over broadband
cable modem
Wireless
2003
Switched
Frequency
spectrum
channels
VoIP soft phone for
pocket PC
VoIP over WiFi
(VoWiFi)
VoIP over WiMax
(VoWiMax)
VoIP runs best in a dedicated, packet-switched carrier services network. For
a company with multiple locations, this means primarily using transports
coming out of the DS and OC CSIs. Wireless transports may be used to augment or support the routine need for remote telephony services.
Carrier service companies are constantly adding and upgrading network
transport lines and equipment in all five of the CSIs. They also grow by merging with carriers that are more heavily vested in another CSI than they are.
This is important to understand if you’re running VoIP in a multilocation network. If you have private, dedicated transports, you’re not so much concerned with how much of the dedicated line is owned by one or more carrier
providers as you are with the underlying requirement that it be dedicated to
your VoIP network 24 hours a day, 365 days a year. At the same time, if you
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can acquire dedicated lines that are owned from point A to point B by one
carrier company, chances are that the single owner may be more apt to
resolve maintenance problems than a dedicated line owned by several carrier companies.
Just like the highway system, CSIs are not owned by any one carrier because
all carriers own a portion of each CSI. What they do not own they must lease
from other carriers at wholesale and resell to the customer. Most carrier service companies can lease network transports from all five CSIs.
Carrier companies have countless miles of copper and fiber-optic cable running through underground conduits across the country and the world. In
addition, the carriers strategically locate their facilities throughout the country to terminate and switch out all their network transport lines and wireless
channels to best support their customer base. Taken in total, all these networks constitute the five CSIs described in this chapter.
How VoIP and the Internet
Fit the CSI Picture
To understand how the Internet relates to the five CSIs, it helps to first recognize what the Internet is. No doubt Bell would be captivated by the enormity
of what we call the Internet. By definition, it is a network of networks. But
just like VoIP can run on any of the five CSIs in varying degrees of quality, the
Internet can also be accessed from any of the five CSIs in varying degrees of
quality and security.
VoIP over Internet
Yes, the Internet is a network of networks, and the Web is one of its largest
applications. But the Internet is also a network that is accessible through all
five CSIs. Figure 4-5 provides an illustration of how this access is provided.
Since the Web emerged into the private sector in the early 1990s, the entire
Internet has been converted to a tiered infrastructure that predetermines
broadly what kind of quality you can expect over your Internet connection.
What tier your Internet provider operates at is a major factor that controls
your bandwidth throughput and therefore the quality of your VoIP services.
Several new terms surfacing in light of VoIP are VSP, for VoIP service provider,
as well as VoIP provider and VoIP hosting provider. (Using VoIP over the
Internet is covered in more detail in Chapter 9.)
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Global Internet
PSTN
switched
DS
dedicated
T1
line
POTS
line
Adapter
Figure 4-5:
Internet
access is
possible
through all
five CSIs.
OC
dedicated
Level 3
fiber-optic
switch
HFC
dedicated
OC-3
line
Splitter
Router
HFC
line
TV
Ethernet
VoIP
phone
Switched
Ethernet
Wireless
Cable
modem
VoIP
phone
VoIP
phone
POTS
telephone
Broadband DSL
VoIP
Private VoIP
Private VoIP
Broadband
cable modem
VoIP
VoIP
pocket PC
VoIP in the corporate sector
Technically, the Internet is a network (a transport) and VoIP is a network
transport service. Both the transport and the transport service are provided
in varying degrees of quality on all five CSIs. All five CSIs can provide access
to the Internet, just as all five CSIs can support VoIP services.
Keep in mind that if you run VoIP on the Internet, at least one CSI is involved.
The Internet is not a CSI: It is a network (global though it may be) that results
from all five CSIs providing access to it.
Even though VoIP was developed in 1995, the corporate world did not consider adopting it in a big way until 2001. Issues pertaining to quality and security complicated VoIP’s adoption. These issues have been largely addressed,
and the corporate sector is rapidly adopting VoIP. The transports available
on the DS and OC CSIs are being used most often by companies to set up
their VoIP networks to run over private, dedicated network transports.
VoIP in the consumer sector
Another point in common between the Internet and VoIP is that they use the
same group of protocols. When some people hear the “IP” portion of “VoIP,”
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they incorrectly assume that because VoIP uses the TCP/IP protocols used on
the Internet, VoIP itself can run only on the Internet. This is not accurate, as
you will see in the chapters that follow.
From a consumer’s perspective, however, such confusion is easy to understand. To implement VoIP, consumers require broadband access to the
Internet. Internet access and VoIP go hand-in-hand.
Note that broadband Internet access for VoIP is an artifact of only consumer
implementation of VoIP. It is often not a consideration in corporate VoIP,
which most often relies on dedicated lines that provide no Internet access.
Do not confuse the use of the IP protocols with the use of the Internet; keep
their distinction separate. TCP/IP protocols can run on any network in any
CSI. VoIP’s service quality varies, but it can run on any of the five CSIs. It can
run on all dedicated and wireless transports.
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Chapter 5
Getting Switched
In This Chapter
Supporting VoIP over the PSTN
Controlling millions of calls
Understanding quality of service issues
I
n previous chapters, I discuss the beginnings of the public switched
telephone network, or the PSTN. I also outline some history of the PSTN.
Perhaps the most significant piece of history was the development and
deployment of digital telephony services in the early 1960s. Since then, the
PSTN has experienced other significant transport line and service developments, including ISDN and DSL. In the consumer market, these newer transports and services are provided over the existing POTS line, providing
greater bandwidth.
Today the PSTN is also known simply as the switched network. This chapter
provides you with the details you need to understand the other transports in
the switched network. Also covered are VoIP services available on the PSTN
and how calls are controlled on the PSTN.
Understanding How the
PSTN Supports VoIP
No other network in the world can compare to the reliability of the U.S.
switched network. (Granted, a handful of disasters have disrupted PSTN
services in specific regions, but these are the exceptions, not the rule.) Such
reliability, however, comes at a high price: The cost of the switched network,
particularly recurring (per-minute) charges, is the highest in the world.
Regional toll and international calling using the PSTN are the most highly regulated switched network services. This means high regulatory fees in addition to recurring usage charges. But VoIP greatly reduces and may eliminate
these types of charges.
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The PSTN-VoIP baseline
The quality of service and high performance of the switched network have
rarely been in question in the past fifty years. It is only natural that this quality, which we’ve come to accept and expect, would be considered a baseline,
or standard, that VoIP needs to live up to.
Living up to the quality standards of the PSTN presents a problem for VoIP.
Remember that VoIP is unregulated, which means it has no enforceable quality standards. Quite frankly, VoIP can’t meet the level of quality set by the
PSTN in each and every network design, and therefore VoIP is not for everybody. This will change as VoIP replaces the traditional telephony services
and customers demand acceptable quality standards.
As it is now, VoIP runs best when implemented on a private, dedicated network. With this in place, any company can utilize any of the other transports
to place and receive telephony calls at low or no cost. (The dedicated network
options are covered in detail in Chapter 7.) In this chapter, I clarify the three
switched transports (POTS, ISDN, and DSL) that may be used to deliver reasonably good quality VoIP to the consumer market, to smaller companies,
and to those in the home seeking to connect through their company’s larger
corporate network.
The POTS transport
As you already know, POTS is a transport that runs through the circuitswitched PSTN. All transport lines in the PSTN have a circuit-identification
number, which is either all numeric or alphanumeric. For example, a POTS
telephone number has an area code, a prefix, and a suffix that correspond to
the physical circuit and the lines that make up that circuit.
Although POTS does not run VoIP directly, POTS is required for the later digital transport, DSL. Because of the need for a POTS line to have a circuit ID,
you must have a POTS line established before you can order broadband DSL.
DSL runs on the same line as your POTS telephone service. This raises an
interesting question. If you are looking to get broadband DSL so you can run
VoIP, do you need to have the added cost of the POTS service? For now, you
do. I expect this will change as competition heats up and POTS carriers continue to lose consumers to the broadband cable carriers. (More about this
dilemma in a moment, in “The DSL transport.”)
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The ISDN transport
Work on developing ISDN began in the 1970s but would not be sold to the
bandwidth-hungry customer until the early to mid 1990s. Many said it was
too little too late, and the consumer market for ISDN never took off. After
the news of the first VoIP telephony call over the Internet spread in 1995, a
renewed interest in ISDN emerged for a short while. But by this time our
attention was turned to the emerging DSL technology first deployed in 1998.
The eventual ISDN standard provided for two flavors of ISDN: Basic Rate
Interface (BRI) and Primary Rate Interface (PRI). The ISDN standard defines
the basic unit of bandwidth as a B channel, which provides 64 Kbps of bandwidth. B stands for bearer channel, which is another name for the channel
that carries POTS calls over the PSTN.
In the digital world, all transport lines provide one or more channels, just like
your cable television provides different channels to carry various programs.
Unlike POTS calls, ISDN calls originate in digital form and travel over the
switched network to the destination being called.
BRI
By the time ISDN rolled out to the public, other transports and services had
evolved that provided more bandwidth without the complexities and cost
factors associated with the BRI flavor of ISDN. Some BRI customers are still
out there, but they are usually in the process of converting to DSL, cable
modem, or some variation of wireless technology. The monthly recurring
charges for BRI transport services are considered exorbitant — and are even
higher than POTS recurring charges. As a result, BRI has generally dropped
out of the VoIP picture.
PRI
The PRI implementation of ISDN has proven to be a cost-effective transport
option for companies with a single location seeking to run IP telephony on
their LAN. PRI supports local POTS calls into the PSTN.
PRI is the one ISDN transport that has remained useful for supporting VoIP. It
provides a customer with 23 B channels of digital bandwidth. In addition, the
carrier configures the PRI to have one 64 Kbps D channel, which is used to
manage the line. The industry summarizes the PRI aggregate digital bandwidth as “23 B + 1 D.”
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In general, a VoIP call is made over a PRI transport as follows:
1. A caller uses their IP-enabled phone to dial a number.
2. The number initiates a packet on the LAN. For inside calls, the packet
stays on the LAN. For outside calls, the packet is switched to the PSTN
gateway.
A PSTN gateway is a hardware device whose basic function is to sit
between two dissimilar networks and translate the packets that pass
through into the format required by the destination side. Many different
levels of gateways include other functions, such as routing and network
management.
3. The PSTN gateway may use a PRI transport to connect directly to the
PSTN. When the gateway gets the call request, it allocates a B channel
on the PRI transport, initiates the call, and passes the call to the PRI
transport.
4. After the call is on the PRI, it is translated for operation over the PSTN
as a circuit-switched call.
5. When the call reaches the destination telephone, a circuit is established between the caller and the receiver for the life of the call.
6. When the call is complete and either party hangs up, the PRI B channel is returned to the channel pool controlled by the PSTN gateway.
Figure 5-1 provides an illustration of a network layout that could support this
call scenario using a PSTN gateway.
Because PRI is a switched transport, it easily connects to the PSTN, which is
also switched. PRIs are compatible with the call control used on the PSTN to
manage POTS-related calls. (Call control is discussed at some length later in
this chapter.)
In effect, the PRI is capable of handling twenty-three individual telephone calls
simultaneously, delivering an aggregate bandwidth capacity of 1.472 Mbps over
the PSTN. In addition, the PRI transport can be used for computer data as well
as videoconferencing. The PRI transport continues to be employed because it
is effective, compatible with the PSTN, and cheap, averaging about $275 to
$425 per month. Local recurring telephony charges still apply, as they do with
POTS or any off-net VoIP call.
The PRI is not a good fit for every VoIP network environment. But for a singlelocation LAN running IP telephony (VoIP on the LAN) with separate Internet
access, the PRI is an effective solution for gaining access to the PSTN for your
network.
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PSTN
Switched
PRI
Internet
Main
Gateway
Dedicated
T1 line
Router
IP
Voice mail
server
Core LAN
switch
Telephony
server
Data
server
Figure 5-1:
Making
VoIP calls
over a PRI
transport.
Internal
gateway
Fax
IP
PSTN
Analog PC
modem dialup
The DSL transport
DSL stands for digital subscriber line, a form of broadband service primarily
used by the consumer market and those who telecommute from home. (DSL
is also used by some companies for data-only Internet services.) DSL has
become one of the most popular transports for running VoIP in the home.
Many criticize the fact that DSL customers must have a POTS line with an
assigned phone number. A counter argument is safety — and backup phone
service. If you keep your POTS phone plugged into your broadband service,
you can call 911 directly. (Consumer VoIP carriers are only now being required
to deliver real-time local 911 services, but it will take at least two to three
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years for the service be uniform and operational.) In addition, if your VoIP
provider’s network should go down or lose power, you can still make telephone calls using your POTS phone. The main benefit of having VoIP in the
home at this time is to eliminate recurring toll charges, not to replace 911 or
local calling.
So what can a user expect to pay for getting the benefits of VoIP in their
home? Table 5-1 details the typical costs of home VoIP service, when running
over a DSL line.
Table 5-1
Costs for VoIP over a DSL Transport
Item
One-Time Charges ($)
Recurring Charges ($)
POTS line
65
25
DSL service
100 (waived)
50
VoIP adapter
225 (waived)
0
VoIP service plan
35
50
Total
100
125
As you can see, it doesn’t take much to financially justify having VoIP service
in your home. This is particularly true if you are already using DSL as your
Internet access method. Thus, the monthly cost that is strictly VoIP is the
one-time service-plan activation charge of $35 — and the monthly recurring
charge of $50. If your monthly toll usage charges for intralata, intrastate,
interstate or international run higher than this amount (or more than $600
per year), you are money-ahead by getting VoIP.
Controlling Calls
You might wonder how the PSTN manages to control millions of circuitswitched telephone calls each day. Most people know that their telephone
connects to the public telephone network, but they don’t know what happens
to make it work beyond that point.
A critical part of the PSTN infrastructure is making each telephone call successful. To do this, there needs to be some mechanism by which a call is
initiated (sometimes referred to as call setup), maintained, and terminated
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(sometimes referred to as call tear down). Call setup establishes a channel
over which communication can occur, and call tear down releases that channel so it can be used by a different call. These steps — setup, maintenance,
and tear down — are collectively referred to as call control, or CC for short.
Call control does not apply to VoIP on-net calls. When you are operating
within the PSTN or are initiating a call on a VoIP network and the destination
is on the PSTN, call control becomes relevant. In this section, I discuss various aspects of call control, with particular emphasis on how it affects VoIP.
Signaling system 7 (SS7)
We have come to expect a certain degree of quality with POTS telephony. That
quality is ensured by the use of signaling system 7 (SS7), the call-control protocol. SS7 assigns a separate channel in parallel to each PSTN call and provides call control information through this separate channel. That information
is responsible for maintaining the call so that the line doesn’t “go dead” while
you are talking with someone and so you don’t get other distractions such as
line fade or crosstalk.
SS7 is also responsible for the high-quality accounting services that support
the billings and usage involved with every PSTN telephone call. In summary
form, customers are able to manage their aggregate monthly telephony usage
costs, assess their monthly recurring line access costs, find out what regulatory fees are being applied monthly, and even determine who is and isn’t
using the telephony system and what they are using it for. SS7 makes all these
reports possible.
A good analogy for SS7 is the air traffic control network in the United States.
To control the thousands of hourly flights, a parallel network provides realtime information that the air controller staff uses to control the flights in
their respective regions. Figure 5-2 illustrates the parallel nature of SS7 in
relation to regular phone calls.
Call control and VoIP
Call control on the PSTN is one of the reasons why today’s quality of service
is so good — and one of the historical impediments to VoIP. The obstacles
presented by call control were overcome through improved technology such
as PSTN gateways and newer call-control methods that support dedicated
packet-switching calling into the PSTN.
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SS7 Network
Switch
Switch
Switch
Figure 5-2:
SS7
operates Parallel signals;
in parallel same POTS line
to regular
phone calls
on the
POTS
PSTN.
telephone
SS7 runs silently
in parallel for the life
of each POTS call
Parallel signals;
same POTS line
POTS
telephone
POTS
telephone
Achieving these newer forms of call control, however, is both complex and
costly. For this reason, many companies are opting to design their networks
to use their private dedicated transports to support on-net VoIP telephone
calls as much as possible. Companies with large multilocation networks that
cover the entire country (or even just one or two regions of the country) can
design their VoIP networks to route calls destined for other calling areas as
far as possible over their private network before going off-net to the PSTN.
This type of design optimizes private network use, reduces or eliminates
costs incurred with the PSTN, and still provides the QoS benefits of the PSTN.
Only in cases where the company has exorbitant local recurring PSTN charges
does it make sense to consider changing how calls into the PSTN are controlled. When a call must go off-net, converting from the packetized VoIP network to the public-switched network is at the very heart of converging the
calls.
Delays and errors
When converting to VoIP, another call-control consideration pertains to controlling network errors and delay. In data networks, delay is not a big deal
because the network can compensate for it by reassembling packets at the
destination. If that fails, a well-designed network can request that the data be
retransmitted.
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Even though all the error correction and retransmission can be performed at
top network speeds, data packet speed transmission requirements are much
slower than those required for transmitting VoIP packets. If I don’t get an
e-mail message for a couple of minutes, this is no major disruption. But if
there is a delay in a real-time voice transmission, it messes up the quality of
the conversation.
To work at the same QoS levels as POTS, VoIP demands real-time speed that
exceeds the requirements of traditional data networking. That is why you
can’t adequately operate VoIP on networks that run at less than broadband
speed. Unlike data packets, VoIP does not retransmit packets. What you hear
(and see, when transmitting video) is what you get.
A big part of the need for minimal broadband speeds pertains to the underlying requirements for network design. As covered in Chapter 1, the computer
network uses the TCP/UDP/IP networking model and its related protocols to
support both data packets and VoIP packets that travel the network. Keep in
mind that any network connection can and usually is several network connections strung together to ultimately provide the end-to-end connection. As
a result, the design of the network used to support VoIP is critical to the QoS
that you have with VoIP telephone calls.
Quality and VoIP
When we talk about various forms of telephone quality of service (QoS), it is
understood in the industry that toll quality means the highest form of telephony service quality controlled by SS7. One of the largest problems with
early VoIP was QoS. Connections could be made over the PSTN and into the
Internet, but what callers heard was far from what we’ve become accustomed
to with the toll quality of POTS. Since then, we’ve learned that VoIP QoS
comes down to controlling specific errors that are commonplace on VoIP networks. Today, all of those errors can be controlled through network design.
VoIP telephony service using DSL is said to be near toll quality. With a private, dedicated approach to VoIP, your company can achieve toll quality
(or better) VoIP service.
VoIP hardware and software is improving to the point where error rates will
soon be a thing of the past on all network types. Even so, it is important to
understand the three factors that can affect QoS on a VoIP call:
Network delay
Poor compression
Signal attenuation
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Network delay
In 1995, the delay for a VoIP call using the Internet ranged from 400 to 4000
milliseconds (ms), or 4/10 second to 4 seconds. This delay was quite noticeable in a conversation and was typical when using VoIP over POTS lines.
Fortunately, since 1995, network options have improved, which has reduced
delay and thereby improved quality.
Delay continues to be a factor in VoIP network design and management. It is
something that network professionals watch for continuously. Actual delay
depends on the type of network access, the overall distance between the
caller and the receiver, the total number of users on the network, the network type involved in the connection, and even the equipment used.
Leading IP telephone manufacturers and VoIP carriers use a benchmark of
150 ms as the maximum acceptable delay. That delay metric, by the way, was
established long ago as the delay benchmark for POTS.
Closely related to delay is a factor known as jitter. Whenever VoIP packets are
received outside the expected window of time (delayed), jitter occurs. Jitter
may be caused by timing delays introduced by equipment or transport failures, increased network traffic, or changes in the configuration of the network.
A jitter buffer can be used to store packets as they arrive at the receiving end;
the packets are then distributed to the destination VoIP telephone in the correct order. In this way, delayed VoIP packets don’t disrupt the conversation.
Poor compression
VoIP converts the sound of your voice into packets of data, sends them across
the network being used as the transport, and then reconstructs them into
sound at the receiver’s end of the network. The sound information, often
called the payload, is put together with overhead information identifying
where the packet should go to create the final packet transmitted over the
network.
VoIP often uses compression techniques to reduce the total size of each
packet. The benefit of compression is that it increases speed and optimizes
available bandwidth. As a result, there is less delay and higher QoS.
VoIP is not regulated and is still rather new, so compression techniques used
by consumer-market VoIP carriers are not standardized and are still being
developed.
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VoIP carrier service providers can be differentiated in terms of service quality relating to compression and network speeds. How much of a commitment
will the carrier make to ensure a high quality of VoIP service? You want to
read in your service level agreement (SLA) how much speed and bandwidth
you can expect. Reputable carriers usually list 256 Kbps as the minimum
speed and as high as 1.536 Mbps as the maximum speed. If they state that it
is “best effort” within this range, that is not so bad. If they state nothing or
give no range, move on to a different carrier.
Signal attenuation
Signal attenuation is the degradation of a signal over distance and time. Did
you ever drive out to the country or into the mountains with a radio on? As
you get farther and farther from the source of the signal, the radio fades out
or you hear more static.
This is similar to signal attenuation over the VoIP network. VoIP packets are
represented on many transports as a change in voltage, and that voltage can
degrade over time and distance. By the time the packets arrive at their destination, the signal inside the packets is no longer in its original form. If attenuation
is very poor, the person you are calling may not even be able to distinguish
who you are or what you are saying.
Attenuation can be reduced or eliminated by improving the speed at which
packets are delivered on the network. One way to fight attenuation is with
compression, discussed in the preceding section. The better the compression, the better the attenuation.
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Going Broadband
In This Chapter
Transmitting over broadband
Setting up VoIP over cable
Setting up VoIP over DSL
I
n the beginning, the only public access to the Internet was through slow,
dialup modems, which had a typical maximum speed of 56 Kbps. During
the 1990s, people clamored for higher-bandwidth alternatives. Much of the
demand centered on access to the Internet for applications such as e-mail
and e-commerce. Companies wanted more bandwidth also to make use of
telecommuting applications that remote employees could access through
corporate networks.
By 1998, two high-bandwidth options, which had been in development for
several years, were finally rolling out to the public. These two types are now
known as cable modem (CM) and digital subscriber line (DSL). Because both
options increased the available bandwidth when compared to a traditional
modem connection, they were labeled as broadband. Actual throughput varied,
but the minimum speed for both broadband types was 256 Kbps, and the
maximum speed was 1.536 Mbps.
At the same time that the media coined the term broadband, the term narrowband began to be used to characterize older, slower connections on POTS
lines. By 2000, the two broadband options had made their mark, and narrowband was well on its way into the bandwidth history books.
Broadband access — either cable modem or DSL — provides an easy way to
implement VoIP. From a network perspective, you need only a VoIP adapter
box and a service plan to make good-quality VoIP calls. The VoIP adapter box
is connected to your broadband service device (either a broadband modem
or router). The adapter box provides ports for connecting your VoIP phone
or your POTS phone (or both) as well as your computer. In addition, many
consumers add a wireless router to the adapter box to gain more ports and
wireless (WiFi) connectivity. Each of these devices must plug into a power
outlet. I suggest you get a power strip with surge protection.
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Broadband Transmission Methods
Two types of transmission are used with both cable modem and DSL broadband services: asymmetric and symmetric. These transmission types are necessary to optimize and share bandwidth, which is more of a requirement in
highly populated areas, where the lines can get congested. These two types
are distinguished by the amount of bandwidth available to the end-user and
how the actual transmission takes place over the transport line.
Asymmetric
Asymmetric transmission is the typical option used for consumer broadband.
Asymmetric transmission means that the data rate is different depending on
the direction of the data. For example, a typical consumer broadband setup
may have an upstream of 384 Kbps and a downstream of 1.536 Mbps. The difference in transmission speeds is based on the concept that end-users are
normally consumers of information, not providers of information.
VoIP requires both upstream and downstream data transfers. Fortunately,
VoIP requires only a 64 Kbps channel to deliver high-quality services, so it
can operate over regular asymmetrical lines.
Symmetric
As you might have guessed, symmetric transmission means that the upstream
data rate is the same as the downstream data rate. Symmetric transmission
normally comes with a higher price tag that varies according to the bandwidth desired.
Even though symmetric transmission is more expensive than asymmetric,
such a connection may be necessary, particularly if you are running your
own Web server or e-mail server over the connection. In that case, incoming
traffic is generally low, but outbound traffic — delivering content to users —
can be critical.
As with asymmetric transmission, VoIP requires a minimum of 64 Kbps to
operate. If your symmetric connection is faster than this minimum, you’ll do
fine operating VoIP over the link.
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Broadband by the numbers
The Federal Communications Commission
reported at the end of the first half of 2004 that
the number of broadband transport lines in the
United States had reached 32.5 million. The
report indicated there were 11.4 million DSL
users, 18.6 million cable modem users, and more
than 2 million other users (satellite and miscellaneous connections).
The market for broadband lines is still wide
open. I have no doubt that the maturation of
VoIP over broadband Internet connections is
persuading consumers and small businesses to
adopt VoIP. I can see the day when satellite
providers will market “broadband,” and many
will think that it is actually ultrahigh-speed
Internet access. Apparently any network transport service, hardwired or wired, that accesses
the Internet at a speed faster than a POTS line
is a candidate for the broadband category.
VoIP with Your Cable Modem
Cable modems provide Internet connectivity through the HFC CSI (described
in Chapter 4). The HFC CSI was originally designed to deliver television
signals to the residential market. As the need for residential Internet connections exploded, the cable industry optimized its network to provide highspeed Internet access. VoIP then became a possibility for this market.
VoIP shares something with your TV
Today the HFC CSI is used not only for cable television, but also for traditional
POTS telephony and data services such as Internet access. These services are
sold and billed separately on a monthly basis. Based on the cable company,
customers may be able to choose which services they use. Traditionally, companies have required that users have at least basic cable service, but such a
requirement is being dropped by some companies. In some areas, it is possible
to get just telephone service or just Internet service over the coax cable traditionally used to deliver the television signal.
You may wonder how VoIP can run on the same cable that provides cable
television. Just as the cable can deliver hundreds of different television channels, it also supports the assignment of channels for Internet data services.
For POTS telephony service, the cable companies can pick off the POTS
signal and divert it into the PSTN.
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Because VoIP transports voice signals inside IP packets, the cable infrastructure doesn’t need to distinguish regular data packets from those packets
transporting VoIP. After the customer is connected to the Internet, the VoIP
provider takes care of sending and receiving the VoIP packets. The VoIP
provider may or may not be the cable company.
Adding VoIP
The cable customer is free to enter into a VoIP service agreement with any
Internet-based VoIP provider. As of this writing, VoIP service plans range from
$20 to $50 per month, depending on the number of minutes desired per month.
Some VoIP providers have unlimited minute plans. The VoIP carrier provides
the VoIP adapter box at no cost provided you sign a term deal (such as two
years), or you may be required to purchase or lease a broadband VoIP adapter
box. Make sure you read the details in the service agreement.
Table 6-1 illustrates the typical costs associated with running VoIP over a
cable modem connection. Remember that the amounts shown in the table
vary depending on where you live and what services you choose.
Table 6-1
Costs for VoIP Using a Cable Modem
Item
One-Time Charges ($)
Recurring Charges ($)
Cable TV line
35
40
Internet access
0
50
Cable modem
0
3
VoIP service
30
30
VoIP adapter
0
0
POTS services
0
15
VoIP toll service
0
0
Totals
65
138
Setting up VoIP on a cable modem
After your cable modem is in place and functioning properly, adding VoIP is
relatively easy. Figure 6-1 illustrates the typical method for connecting VoIP
through a cable modem.
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Cable
television
Cable modem
Figure 6-1:
Connecting
VoIP
through
a cable
modem.
Coaxial
cable to fiber
neighborhood
node
Splitter
VoIP telephone
VoIP adapter
Following is the procedure for setting up VoIP service over your cable
modem:
1. Connect the VoIP adapter box to the cable modem.
2. Connect your computer to the VoIP adapter box.
3. Install the software provided by the VoIP provider.
4. Configure the telephone number and other parameters as directed by
the VoIP provider.
5. Connect a microphone and speakers or plugs into the VoIP headset or
handset.
6. Use the IP soft phone directly from your computer and begin to place
VoIP telephone calls.
An IP soft phone is software that provides a way to use your computer as a
telephone. The software displays an easy-to-use dialing pad on the screen,
along with controls for other common telephone functions, as shown in
Figure 6-2. Some versions of soft phones provide an interface to a common
directory, such as one maintained in Microsoft Outlook.
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Figure 6-2:
A typical
VoIP soft
phone
dial pad.
Possible cable modem problems
It’s not uncommon to get a thirty-day trial period during which you can, for
any reason, cancel your cable modem agreement or your VoIP over cable
modem services agreement and stop using VoIP. If you have no trial period,
the next best thing is a month-to-month plan. Note that you will need to pay
an activation fee. If you can’t get a trial period, record any problems you have
with the service during the first month.
If the service doesn’t work for you, you can terminate the trial or make the
case that your activation cost should be refunded. In this section, I describe
some things to be on the lookout for during your first month of VoIP service.
Network contention
The HFC CSI is contention-based, which means that it offers limited resources
that are allocated to customers based on demand. It essentially assigns channels to customers as they come online. If you’re one of only a few customers
in your neighborhood, you will enjoy very good bandwidth and fast data
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transfer speeds. However, if many users in your neighborhood have cable
modems, and you are among those who come online later in the day, you
can expect delays due to greater contention for the available resources. The
amount of delay depends on how the cable company built the network in
your neighborhood and how they manage their network.
The HFC CSI continues to rely on coaxial cable to transport signals. However,
research is being conducted on the emerging FTTH (fiber to the home) standard, which would use ultrahigh bandwidth (100-Mbps) fiber-optic cable to
the home. FTTH uses a star topology (see Figure 6-3), which has the advantage of better fault isolation, thereby minimizing or eliminating contention
and the resulting throughput problems.
Elizabeth
City
HFC line to
the home
Fault isolation
provided here at the
provider’s switching
facility
Camben
Cable Modem
Termination Service
South
Mills
Figure 6-3:
HFC
network
over a star
topology.
Hertford
Potential network failure
Because the older parts of the HFC CSI uses a ring topology (see Figure 6-4), if
one part of the network ring is down or not working properly, the entire ring
is affected. Moreover, if there is a power failure in the neighborhood, everyone on the network is down. This means any services going through the
cable network — including the telephone and Internet — are unavailable.
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Mislabeling wireless
In just six years, broadband has become the
most popular method to support consumer VoIP.
You can even use wireless connectivity (WiFi or
WiMax) to implement VoIP. But you should not
confuse this wireless connectivity with broadband. They are complementary, but they are not
the same. The media, more than any other
entity, has often incorrectly called the newer
wireless technologies broadband. Both WiFi
and WiMax technologies enable users to connect wirelessly to the Internet or to any network
supporting wireless. The fact that they provide
wireless access to the Internet does not change
the fact that WiFi and WiMax both implement
Ethernet connections, the same as wired networks do.
Elizabeth
City
No fault isolation across
communities or end-users
Camben
HFC line to
the home
HFC Network Supporting
Four Communities
in Close Proximity
South
Mills
Figure 6-4:
HFC
network
over a ring
topology.
Hertford
VoIP Through Your DSL Connection
DSL, described in Chapter 5, is a high-speed data connection method that
uses the ordinary telephone lines that come into your home or business.
Utilizing a star topology (see Figure 6-5), DSL provides two benefits important
to VoIP: excellent fault isolation and better throughput due to less resource
contention.
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Elizabeth
City
DSL over POTS
line to the home
Fault isolation
provided at the LEC’s
switching facility
Camben
PSTN
South
Mills
Figure 6-5:
DSL star
topology.
Hertford
POTS plus!
DSL utilizes the PSTN CSI and is therefore a switched transport service. All
customers must have at least basic POTS telephone service to use DSL. After
you are running both POTS for telephone service and DSL for data, you can
enter into an agreement with any VoIP provider to obtain VoIP services.
As with using VoIP over a cable modem connection, VoIP over DSL plans average about $50 per month for unlimited calling. (Refer to Table 6-1.) The VoIP
provider either gives you a VoIP adapter box or requires you to purchase one.
You can keep the POTS line service while running VoIP through the adapter
box, essentially making two calls at the same time on a single phone line.
If the VoIP provider you select doesn’t have an unlimited plan, seeks to limit
your minutes, or charges you by the minute, I suggest you consider a different provider.
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Setting up VoIP on your DSL line
Setting up a VoIP connection through your DSL line is similar to connecting
through a cable modem. The primary differences are that you use a different
adapter and that adapter connects to the DSL router or modem rather than
to a cable modem. Figure 6-6 illustrates a normal VoIP connection through a
DSL line.
To make your connection, follow these steps:
1. Connect the VoIP adapter box to the DSL router or modem.
2. Connect your computer to the VoIP adapter box.
3. Install the software provided by the VoIP provider.
4. Configure the telephone number and other parameters as directed by
the VoIP provider.
DSL modem
Figure 6-6:
Connecting
VoIP
through a
DSL line.
POTS line
to carrier
switching
facility
Fax
VoIP telephone
VoIP adapter
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5. Connect a microphone and speakers or plugs to a VoIP headset or
handset.
6. Use the IP soft phone directly from your computer and begin to place
VoIP telephone calls.
DSL does not require you to abandon your POTS telephone nor its services.
Using an inexpensive splitter that plugs into the VoIP adapter box, you can
continue to enjoy POTS telephony as well as VoIP. Figure 6-2 shows a fax line
coming out of the VoIP adapter, but this could just as easily be a regular
telephone.
Potential DSL problems
The technology used by DSL requires that the distance between your computer and the nearest carrier facility be no greater than 18,000 feet (about 3.5
miles). Distance is a factor with DSL in determining overall data speed: The
shorter the distance, the better the throughput. Thus, the closer you are to
the carrier facility, the better the quality of your VoIP experience. If you are
near the distance limit, you may not be able to get speeds that provide satisfactory quality.
DSL does not provide enough bandwidth to support VoIP traffic for a multilocation company. Therefore, DSL is not acceptable as a transport for a multisite corporate network. However, DSL is more than adequate for consumer
and home-business VoIP.
VoIP over POTS
DSL runs over the same PSTN CSI that carries your POTS service. To accomplish this feat, the DSL signal is modulated at a higher frequency than the
frequency used for regular voice. Analog POTS lines can’t support VoIP for
reasons already outlined in Chapter 4, but DSL technology — piggybacked on
the POTS line — can support it. DSL uses multiplexing equipment that amplifies, regenerates, and reconstructs the VoIP signals so that the packets can
travel to and from the Internet in an acceptable manner.
Figure 6-7 illustrates how your VoIP packets traverse the network through
your DSL connection, the PSTN, and the Internet.
A DSL line is like having two channels that are each operated using different
networking techniques, both going over the same physical line. One channel
is your analog POTS line, and the other is the digital DSL line.
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Packet switched
Internet
Circuit switched
PSTN
DSLAM
POTS line
Figure 6-7:
Sending
VoIP
packets
through
a DSL
connection.
Adapter box
DSL modem
POTS line
DSL modem
Adapter box
VoIP
telephone
VoIP
telephone
Computer
Computer
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We’re Dedicated
In This Chapter
Understanding dedicated transports
Transporting over digital service and optical carrier networks
Converging networks
Managing your bandwidth
Keeping a circuit-switched line
A
s the old axiom states, you get what you pay for. This statement certainly applies to network bandwidth. When you examine the various
types of network transports available (see Chapter 4), it quickly becomes
apparent that the highest QoS attainable with VoIP is with networks that
employ dedicated transports. This chapter examines how dedicated transports can help provide the best VoIP experience.
Basics of Dedicated Transports
Transports are the physical lines installed at the company or consumer
premises to provide all sorts of network access. Many folks think of T1 or
T3 transport lines when they hear the phrase “dedicated transport,” and
with good reason. T1 and T3 lines are the most popular dedicated network
transports in the country.
VoIP is making dedicated transports even more popular. If you’re going to
run VoIP on your company’s network, dedicated transports give you the best
quality VoIP. Dedicated transports also allow you to connect all the data
applications used by your company at all your locations.
When transport lines are dedicated, the bandwidth they provide is available
fully to the customer at all times. Unlike switched transport lines, which are
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shared by the public, dedicated lines are 100 percent committed to one specific customer’s private network. For this reason, dedicated networks are
often called private networks or private line networks.
Bandwidth and speed
Bandwidth and speed are the darling twins of data networks. When you compare speeds between dedicated and switched networks, you’ll find that a
switched network transport generally provides far less throughput. For example, a B channel on a switched PRI transport (see Chapter 5) does not provide
the same throughput as a DS0 channel on a dedicated T1 transport. (DS0 and
T1 are both described in gory detail later in this chapter.)
Throughput is the total amount of data that can be passed over a transport
line in a given amount of time. Throughput is directly related to bandwidth
and is often used synonymously with data speed.
Two factors affect both bandwidth and speed when it comes to dedicated
lines: routing and exclusivity. Routing on a dedicated line is directly between
two points, passing through few routers and switches. Data passing through
a switched network, such as the PSTN, will go through many routers and
switches. The more switching points involved, the less throughput because
each switching point adds overhead to track the data.
Exclusivity refers to the fact that a dedicated transport permits only a single
customer’s data on the line. In a switched network, data is aggregated and
shared with others, reducing the bandwidth available to any single customer.
Aggregation also involves resource contention, which can increase delay and
signal degradation.
Figure 7-1 contrasts the difference between the routes followed by a VoIP call
over a switched network and a dedicated transport.
Costs of dedication
Dedicated lines cost more than a regular broadband connection. For companies with multiple locations or heavy data needs, this cost is easily justified
by the associated increased bandwidth, availability, and VoIP cost savings.
Dedicated transports, although more expensive than their switched counterparts, continue to come down in price. For example, in Pittsburgh, within a
distance of less than 15 miles between two endpoints, network access through
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a T1 line ranges from $450 to $625 per month with no other usage-based recurring charges. The final cost depends on which carrier installs and leases the
line and how much they mark up the price. Switched transports are just the
opposite: You pay less for the line itself, but then you must pay the carrier for
recurring usage charges according to the tier levels of regulated per-minute
charges. A switched PRI ranges from $250 to $325 per month.
Packet switched
Internet
VoIP carrier switch
PSTN
DS
POTS line
running DSL
DSLAM
Dedicated
VoIP network
DSL modem
Figure 7-1:
Comparison
of switched
and
dedicated
transports.
Ethernet
LAN in Adapter box
the home
Calling
412-882-XXXX
Receiving
line
724-255-XXXX
VoIP
telephone
Computer
Just four years ago, before VoIP took off, a T1 line cost from $575 to as much
as $925 per month for the same distance. In the past, some carriers would
discount more if you also leased other services to run over the T1 line. For
example, if a customer got Internet access service over a T1 line, the combined cost for this T1 would range from $825 to $1200 per month for similar
distances. For a PRI, the cost ranged from $350 to $475, not including recurring usage charges.
One of the reasons for higher costs with dedicated transports is that they run
on more expensive cabling systems than do broadband connections. Dedicated
transports routinely use ultra-high-speed fiber-optic cable, which is more
expensive than copper lines to install and maintain. The extra cost of a dedicated transport makes it more suited for corporate and multilocation company
networks seeking to run VoIP because it provides high QoS.
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Carriers charge a monthly access fee for the dedicated line that connects your
location to the carrier’s facilities. This line is called the local loop, or the last
mile. The government regulates what the carrier can charge you for dedicated transports. In addition, you are assessed about 7 percent of the total
monthly recurring charge for regulatory fees and taxes. These are the only
recurring costs you have for the dedicated transport itself. Basically, these
are the costs you pay to obtain access to the local loop.
The local loop is one of the biggest costs in any dedicated network. However,
if your company runs VoIP, it can eliminate or greatly reduce costs by putting
most of their traffic on-net. In many cases, this savings can pay for the local
loop access costs for all locations with money left over.
As an example of how much can be saved, I’ll tell you about a large network I
designed that had 384 locations nationwide. The client’s total recurring charges
for the 384 local loops came to $268,000 per month, and their monthly usage
charges were $4,200,000 per month. If they converted to VoIP, they would still
have the local loop charges, but they could have saved 35 to 60 percent of their
usage charges — a whopping savings of $1,470,000 to $2,520,000!
As you can see, the higher costs of a dedicated transport are easily offset by
lower or eliminated usage charges. Because a private, dedicated network can
be used to carry all of a company’s internal telephone calls, the company has
no monthly usage charges for internal VoIP telephone calls. On-net telephone
calling using VoIP reduces or eliminates traditional telephone usage billings.
For calls that must travel off your VoIP network, your company will still have
some traditional carrier service bills.
The wireless last mile
The last mile is a hot area for deploying WiMax
wireless transport services. WiMax is capable
of supporting dedicated access bandwidth
speeds at a range of up to 30 miles. It is too early
to tell how WiMax will figure into the grand
scheme of local loop access. It is also unlikely
that first-generation WiMax could support hundreds of locations and thousands of callers at
the same time. (The first generation of any new
technology seldom does all we want it to.) But
second- and third-generation implementations
may help drop local loop costs significantly and
lead to wide acceptance. In a WiMax world, the
carrier companies will have no cable to install
between their facilities and the customer
premises, so lower labor costs (no installation
to speak of) will translate into substantial cost
savings.
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Real-time network management
The quality of any network is affected by errors
and contention. These are normal factors in any
VoIP network. VoIP network managers watch the
levels of network contention on a daily and even
hourly basis. If a manager sees a spike in utilization, it is a sign that something has changed in
the normal operation of the network. Perhaps
several users are doing massive downloads, or
the VoIP telephony calling has increased, or a
new server is being installed on the VoIP network. Dedicated transports enable real-time utilization information and management. Such a
level of network management is not possible in
a circuit-switched POTS-PSTN network.
High-quality VoIP calls
With a dedicated transport, your network can support massive volumes of
on-net VoIP calls. Huge networks with multiple locations and hundreds or
thousands of callers are best supported with dedicated transports. Dedicated
transports enable a QoS that meets or exceeds the quality found in traditional
circuit-switched PSTN telephone calls.
Types of Dedication
For the corporate sector, dedicated network transports come in two major
flavors: the digital service (or digital signal) CSI and the optical carrier CSI.
Chapter 4 covered quite a bit about these CSIs, but you need to know more to
make an educated decision about which transport is right for your needs.
The DS transports
The original digital service (DS) series of standards had five levels of dedicated lines. Each DS standard provided a set number of 64 Kbps channels, or
DS0s. For example, a DS1 (T1) transport includes 24 channels, and a DS3 (T3)
includes 672 channels.
In the old days when DS transports were new and costly, the DS0 was leased
as a single 64 Kbps transport line. Today, hardly anyone leases a DS0 transport. If you’re implementing VoIP on your company’s network, you won’t
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want to consider using just a single DS0 channel. Not only is it not enough
bandwidth, but it isn’t cost effective.
T1 line
The T in the T1 version of transport represents terrestrial, or over land. The
tariffs controlled by the government for setting the pricing of DS transports
are based on the total terrestrial mileage between point A and point B.
The T1 transport continues to be the most popular transport on the market,
and prices continue to drop. A big reason why the T1 is so popular is that it
permits network configuration folks to divide the total available bandwidth
into smaller individual channels. This makes the T1 particularly suitable for
VoIP networks that run computer data, telephony voice, and even videoconferencing over the same network transport. T1, however, does not provide
adequate bandwidth for large multilocation networks with hundreds of users
in each location.
If a company has fewer than three hundred employees per location, one option
is to multiplex, or bond, multiple T1 lines to act as one big T. For example, if
you multiplex (MUX) six T1s, your effective bandwidth would increase to about
10 Mbps. The costs in this scenario should be considered carefully. The T1
lines would cost about $3000 per month. Additional one-time costs include
the six DS1 interfaces required to terminate the T1 lines at your location. In
addition, there is the cost of the MUX equipment.
T3 line
If you need more bandwidth than what you can obtain from a T1 or a group
of T1s, consider the T3 transport. The T3 transport provides a total aggregate bandwidth of 45 Mbps. This breaks down to about 672 DS0 channels. A
growing company can also consider upgrading to T3 transports or some mix
of T1 and T3 lines. (The latter is more commonplace for larger companies,
which use T1 lines for smaller locations and T3 for the larger locations.)
I had the opportunity to design a crosstown network that required a T3. The
client was a small college in the middle of downtown Pittsburgh. They wanted
to connect their two high-rise dormitory apartment buildings, and they also
wanted Internet access on the network. The total distance between the college
and the apartment buildings was three miles. The monthly charge for the T3
line was $19,000. A T1 line for the same distance was $450. In addition, the onetime cost of terminating the T3 was $5000, much more than the termination
costs of a T1 line. For terminating a T1 line, even if the client had to buy a new
router with DS1 interface, the cost range would be $800 to $3000.
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The OC transports
The advent of fiber-optic cabling in the 1980s changed the way that DS lines
were installed. By the 1990s, most dedicated transport lines were going in as
fiber-optic cables or being implemented through existing fiber lines. The terminating equipment would then be programmed to deliver the equivalent of
however many DS0 channels were needed (1, 24, or 672).
Fiber-optic transports are defined according to the OC (optical carrier) CSI
standards. The four most common transports are OC-3 (155 Mbps), OC-12
(622 Mbps), OC-48 (2.5 Gbps), and OC-192 (10 Gbps). These types of dedicated transports are used by only the largest corporations and the carriers
themselves. The most popular OC standard is OC-3.
Not surprisingly, most small and medium-sized companies rarely have the
need for even an OC-3. But carrier companies put in a minimum of an OC-3
whenever they install carrier services for multitenant buildings and the
largest customers. Their rationale is to put in enough fiber bandwidth to
cover any future customer needs. When those needs arise, the carrier then
simply programs their equipment to deliver the necessary bandwidth.
Recent advances in optical multiplexing have taken the OC CSI to new thresholds. For example, Dense Wave Division Multiplexing (DWDM) can achieve
bandwidth thresholds in the terabit (trillions of bits per second) range. Such
technologies are most often used by carriers to transport data between metropolitan areas across their network backbones. (A backbone is a major communication line used to carry the majority of a carrier’s traffic.)
Converging Dedicated and
Switched Networks
Network convergence is a tricky term that means to bring together or to integrate two or more diverse network types. Everyone considering VoIP needs
to be concerned about converging their digital network (the heart of VoIP)
and their PSTN (voice) networks. Convergence takes two or more varying
modes of carrying telephone calls and enables them to operate together.
VoIP brings together the switched and dedicated networks like never before.
Other attempts to converge the two have been incomplete solutions. For
example, using a dedicated T1 line to carry POTS telephone calls to the PSTN
is not the same as a packetized VoIP telephone call. And POTS-equivalent calls
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over a dedicated T1 line may still be billed as a regular POTS call. True convergence of the two carrier networks means to merge the packets of a VoIP
packet-switched phone call with the circuit-switched signaling of the PSTN.
Figure 7-2 illustrates the convergence of the PSTN with the DS carrier network.
The convergence is made possible through the use of a network-to-network
interface (NNI). NNIs are typically very expensive and are used by carriers
and only the largest customer networks, which have the volume to justify the
high monthly cost.
Public-switched
telephone
network
Carrier-networkto-carrier-network
interface
Digital service
NNI
PSTN
DS
Circuit switched
Packet switched
POTS line
running DSL
Convergence of
circuit-switched and
packet-switched
carrier networks
POTS telephone
DSL modem
Figure 7-2:
Network
convergence using
an NNI.
LAN in
the home
Ethernet
Adapter box
Calling
412-882-0956
VoIP
telephone
Computer
A less expensive option does exist for connecting your VoIP network to the
PSTN. Figure 7-3 illustrates how a company can converge their network onto
the PSTN using a far more cost-effective PRI transport option.
In this example, on-net VoIP calls are carried over the company’s dedicated
network. Outgoing local calls travel on-net as VoIP packets and then travel to
the PSTN through the gateway and its attached PRI transport line. Inbound
calls from the PSTN travel as circuit-switched calls. The gateway translates
inbound calls into VoIP packets.
Inbound calls are paid for by the calling party. Outbound calls over the PRI
are billed at whatever rate the carrier charges. This is a good example of VoIP
convergence: the packet-switching of the VoIP network operating with the circuit-switching of the PSTN to support both inbound and outbound telephone
calls.
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Internet
gateway
T1 line
PC
Unprotected
segment
IP phone
Printer
Protected
segment
Firewall
WEB
server
Switch
Commerce
segment
Switch
DNS
server
Voice mail
server
Core LAN
switch
Telephony
server
Data
server
Figure 7-3:
Costeffective
network
convergence.
Gateway
IP phone
PRI
PC
PSTN
Managing Bandwidth
As mentioned, dedicated transports are channelizable, meaning that their
total bandwidth can be divided by channel and assigned to support specific
applications (computer data, voice or telephony, and videoconferencing).
Each dedicated transport is standardized to have a preset number of digital
service bandwidth channels.
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Dedicating channels to applications
As defined in the DS CSI, each transport channel is called a DS0 and provides
64 Kbps of bandwidth. A DS0 is the smallest unit of bandwidth in the dedicated carrier services network. All dedicated transports are based on some
multiple of DS0s.
For any dedicated transport, the transport line can be programmed to deliver
its total aggregate bandwidth capacity (all channels). Or the channels can be
divided and assigned to specific applications. For example, a T1 line has a
total aggregate bandwidth capacity of twenty-four DS0 channels. In a small
local area network running VoIP that connects to a larger wide area network
running VoIP, the LAN might optimize their dedicated channels by assigning
eight channels to support VoIP, eight channels to support their data network,
and eight channels to support their videoconferencing system. Figure 7-4
shows an illustration of such a network.
Sometimes this type of configuration is referred to as a fixed-channel solution.
The T1 transport enters the company’s premises and is terminated on a multiplexer. From there, individual cables connect to their respective application’s terminating equipment. But fixed-channel is not the only option for
channelizing dedicated bandwidth.
Dynamic bandwidth allocation
The dedicated transport can also connect to equipment such as an IP-PBX
that assigns bandwidth channels on demand, a process known as dynamic
bandwidth allocation. Here is how it works: An IP-PBX supports an onboard
T1 interface module. A dedicated T1 line is used to physically connect the
location through this T1 module on the IP-PBX. At the carrier’s facility, the
same T1 line connects this location’s IP-PBX to the customer’s private, dedicated WAN running VoIP. (A multiway gateway, router, or level-three switch
could also be used in place of the IP-PBX.)
Whenever anyone on the LAN side makes an on-net call, the IP-PBX assigns it
a single DS0 channel from the channel pool. When the call ends, the system
returns the DS0 channel to the pool. The VoIP system at this location is capable of bringing up and maintaining twenty-four simultaneous VoIP calls.
Based on historical PSTN standards, one POTS line can fully support the calling pattern needs of six to eight people, on average. It is no different in the
VoIP world. A VoIP channel can support six to eight people, on average. So a
T1 transport used for VoIP can support 144 to 192 persons (6 x 24 to 8 x 24).
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DS
Videoconferencing
DS1 (T1)
24 channels
Internet
8 channels
8 channels
Dedicated
T1 line
Router
IP
8 channels
Voice mail
server
Core LAN
switch
Telephony
server
Data
server
Figure 7-4:
Allocating
channels to
specific
network
purposes.
IP
Internal
gateway
Fax
PSTN
Analog PC
modem dialup
VoIP enables dynamic bandwidth allocation and therefore optimizes bandwidth utilization. This is not the case in traditional networks that run computer data and telephony on separate networks. In traditional networks that
use dedicated transports, it is well established that about 60 to 70 percent of
dedicated network bandwidth is not even used.
Dynamic bandwidth allocation ensures that your network gets the bandwidth
it needs when it needs it, and it enables a company to manage its bandwidth
to minimize cost and increase productivity. It is a major reason why companies can add VoIP to their current networks using the dedicated transports
already in place.
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Keeping a Switched Line
In fully converged networks, dedicated transports are used for integrated
operation of computer data, voice, and video applications. At the same time,
there is a role for switched transports in the VoIP network. Note that when it
comes down to the local level, the telephone call must ultimately go off-net to
reach local telephone numbers connected to the PSTN. Figure 7-5 illustrates
an example of a fully converged network with switched transport access to
the PSTN.
As you can see, switched transports are used on this network to support
local calls. Also supported are fax services into the PSTN. Until the entire
world converts to VoIP, any VoIP network, however extensive, needs at least
limited access to the PSTN. For the time being, switched transports continue
to have a role in dedicated networks, and VoIP networks must make provisions for carrying calls into the PSTN.
Private
IP network
PSTN
VoIP
phone
Voice mail
server
Internet
gateway
PC
Router
Unprotected
segment
Printer
Protected
segment
Switch
Web
server
DMZ
Switch
Core
LAN switch
Data
server
Telephony
server
Figure 7-5:
A fully
converged
network
with PSTN
access.
PC
DNS
server
VoIP
phone
PSTN
gateway
Fax
Analog PC
modem dialup
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Another important consideration for the use of switched lines is for emergency services. The conversion of 911 emergency call centers to support
VoIP has only just begun. The 911 network evolved in the PSTN and continues
to be largely circuit-switched. This means it is completely dependent on the
PSTN to operate effectively. Therefore, your VoIP network needs to have the
ability to make circuit-switched 911 calls.
The good news is that the easiest solution is to have a PSTN gateway server
(see Figure 7-2) on your network. The server simply converts on-net VoIP
calls to circuit-switched calls and pushes them onto the PSTN. The cost of
the gateway and switched line is recovered in the short term from your savings with VoIP.
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Chapter 8
Going Wireless
In This Chapter
Determining the benefits of wireless
Assessing the WiFi option
Taking wireless VoIP to higher bandwidth levels
Getting familiar with session initiation protocol
W
ith VoIP available on all hardwired networks (broadband and dedicated lines), you might guess that VoIP could not possibly be available in any other form. Guess again! Wireless networking not only supports
VoIP but embraces it completely. This is made evident by the extent to which
the wireless infrastructure provides access to each of the CSIs detailed in
Chapter 4.
This chapter discusses the effect of wireless networking on VoIP, and viceversa. Because the wireless CSI (introduced in Chapter 4) is the newest of the
five CSIs and the one undergoing the most change these days, it’s easy to get
confused about what it provides. It includes traditional cell phone, wireless
broadband, and even telephone services over your pocket PC or PDA. The
good news is that VoIP works with all these technologies, but the information
here focuses on how you can use VoIP with existing and future wireless networks. Chapter 10 provides more detail on using VoIP with wireless telephones.
Why WiFi?
It is fairly safe to say that wireless networking has caused a revolution in
small networks and among the ranks of those perpetually on-the-go. Wireless
networks allow computers to be positioned without regard for wires and
make movement of computers to new locations painless. For those who are
mobile, wireless networking means that they can easily connect almost anyplace they go.
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At its simplest, WiFi networking is a method to extend Ethernet protocols
over a limited area without the need for wires. Instead, the wireless signals
become the medium by which communication happens. Before you can fully
understand wireless (and how it relates to VoIP), you need to understand a
bit about how wireless works. The following sections describe the basics of
wireless networking.
Ethernet networking and VoIP
Ethernet comes in several flavors. When first standardized back in the midto-late 1980s, Ethernet was strictly a computer-data network technology that
operated at 10 Mbps. Today there are 100 Mbps, 1 Gbps, and even 10 Gbps
speeds. To support VoIP, each location in the network must use Ethernet as
its network protocol. The network type may change as the VoIP packets traverse the distance between caller and receiver, but the network must be
Ethernet at the point where the caller connects.
Ethernet, including its wireless forms, uses the Media Access Control (MAC)
frame for carrying LAN traffic. The MAC frame is a way to organize the data,
voice, or video bits so that they can be transported on the local network.
Whenever the network traffic needs to go from the LAN to another location
or to the Internet, the MAC frames on the LAN get repackaged through the
LAN’s edge device as VoIP packets. As packets, they can travel either on the
WAN or to another network to reach their destination.
Today, thanks to VoIP, wireless forms of Ethernet such as WiFi can support
voice and video applications as well as data across multilocation networks.
Examining the IEEE 802.11 standard
WiFi was invented in the 1990s as a wireless method for connecting to the
LAN. It was accepted by the IEEE in 1997 as the 802.11 standard. (The IEEE, or
Institute for Electrical and Electronic Engineers, is the organization responsible for the set of networking standards known as the 802 series.)
WiFi is basically wireless Ethernet. The first version of 802.11 operated at 2
Mbps and supported only computer applications. Very much like the original
Ethernet 802.3 standard, the 802.11 standard evolved to incorporate everfaster speeds. Today, variations of 802.11 include the following:
802.11a: Operating at 54 Mbps, 802.11a is considered the hands-down
favorite for IP telephony within a limited range. Although 802.11a is the
wireless option with the best quality, it has the shortest distance limitations; you can use it up to 100 feet without the need to be connected via
some wire.
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802.11b: Operating at 11 Mbps, 802.11b operates up to 300 feet without
the need for a wired network connection. 802.11b works great for coffee
shops or even small campus-type environments. Voice quality over
802.11b is passable, almost like a long-distance cell phone connection.
802.11g: Operating at 54 Mbps, 802.11g is still relatively new, but is
being touted as a high-speed replacement for 802.11b.
Notice that both 802.11g and 802.11a can transmit data at 54 Mbps. 802.11g
has technical advantages over 802.11a, however. It is backwards compatible
with 802.11b, which means that if you have an 802.11g network device, it will
work in an 802.11b network (or vice versa). Thus, 802.11g provides a clear
upgrade path for older 802.11b users, whereas 802.11a does not.
Newer, cheaper, faster, and better wireless transport alternatives are in the
works. They follow the technology milestones completed by the 802.3 and
802.11 series of standards.
Moving up to wireless
Wireless networks take the idea of network access to a new, never-beforeseen level of service, allowing more flexibility in how users may connect to
the network. If your organization has already migrated to IP telephony, the
LAN side of the enterprise (or the LAN side of each site location in a multilocation company) is running a standard Ethernet-based network. Because the
LAN architecture is Ethernet, it is based on the IEEE 802 series of standards
and is therefore compatible with WiFi.
To upgrade an Ethernet LAN running IP telephony to support wireless telephony, the only requirement is to add VoIP-compatible wireless access points
(WAP). The WAP devices have a limited range, so they should be added to
the network in a manner that is most useful for wireless VoIP users. All WAP
devices should be connected to the LAN through switched ports as opposed
to simple hubs. A hub merely provides a physical, plain-vanilla connection to
the network, whereas Ethernet switches provide fault isolation at every port
and therefore are more conducive with the wireless telephony application.
Finally, users need a wireless IP telephone. Such a phone looks a lot like a cell
phone and operates within a few hundred feet of the WAP devices. However,
users can avoid the expense of a separate phone by using VoIP soft phone on
their WiFi-ready computers. Any computer that permits you to add a WiFi
card can run VoIP. Wireless IP telephones and soft phones are discussed in
more detail in Chapter 10.
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Adding VoIP to the Wireless Network
The 802.11 standards make VoIP and IP telephony possible with nothing
more than your laptop armed with a wireless interface card, perhaps a set
of headphones, and IP telephony software from your VoIP provider. Theoretically, you can walk into any coffee shop or hotel that provides wireless Internet
access and make a telephone call while you’re surfing the Web. There are
many more scenarios for using wireless VoIP, but I think you get the picture.
The following sections provide an overview of some of the VoIP telephony
devices you can use with a wireless network.
IP soft phones for pocket PCs
You already know that VoIP uses packets to transport phone calls from
sender to receiver. Thus, any computer that uses IP protocols can theoretically connect to a VoIP network and make or receive telephone calls. This
includes pocket PCs.
Many pocket PCs running the Windows operating system can connect to
local area networks and exchange data. Provided the data rate for your
pocket PC is high enough, you can use the device for your phone calls. The
software used on the wireless pocket computer to make and receive phone
calls is referred to as an IP soft phone for pocket PC. In most cases, the pocket
PC can also operate as a cellular phone. This makes the device versatile in a
mobile, wireless environment.
Wireless extension to cellular
When using a land line, the caller pays the regulated recurring per-minute
charges involved with the call. The caller has to pay these charges whether
the call is answered or goes into voice mail. Wireless extension to cellular
(WEC) is a technique that enables an incoming call to ring at your hardwired
telephone (land line) and your cell phone at the same time. It enables you to
take the incoming call or send it to voice mail wherever you are at the time of
the call. Plus, the call does not get billed to your cell phone plan. It is treated
as an inbound call to your office number.
WEC requires the PRI transport service, as discussed in Chapter 5. The PRI
transport line has proven to be a cost-effective way to support WEC because
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it is directly compatible with the PSTN. The PRI line terminates on a PRI interface card, which is installed in the customer’s premise equipment, such as a
PBX. (Chapter 11 provides more detail on PBX telephone systems.) When
implementing WEC, all desk phones and cell phones must be digital, not
analog.
The network administrator sets up each internal extension that has the WEC
feature operating on it. Each WEC user has the ability to turn WEC on and off.
WEC is not a feature that a company should give to every extension because
the PRI has a limited number of channels. Typically WEC is given to critical
personnel who need to be reached anywhere, anytime.
After the administrator sets up an extension to have WEC, he or she provides
the user with an access code for enabling or disabling the WEC application
via the desktop phone. Calls coming into the company’s telephone system
ring at the internal desktop extension and simultaneously go out through the
PRI to the PSTN. From there, they are switched to the wireless cellular network. The cell phone rings. All standard cellular phone features such as
caller ID, call waiting, and voice mail are available. The cell phone is treated
as a local extension of the in-house telephony system, even though the call is
routed off-net through the PSTN and wireless CSIs.
Taking VoIP to the WiMax
WiMax is essentially a wireless technology that allows Ethernet connectivity
over long distances — up to 30 miles. This characteristic means WiMax is
likely to be used in the implementation of WANs or as the local loop for a dedicated line (see Chapter 7).
VoIP has no problem running over a WiMax network, and no special hardware
or software is needed. From a VoIP perspective, WiMax is another form (wireless though it may be) of access to the wired, packet-switched network.
Graduating to IEEE 802.16
WiMax is short for Worldwide Interoperability for Microwave Access. Like
WiFi, WiMax specifications are covered by an IEEE standard: 802.16. WiMax is
demonstrating speeds in excess of 70 Mbps, which is more than six times the
maximum speed of WiFi’s 802.11b implementation.
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As mentioned, WiMax covers a distance of up to 30 miles, which is a large
enough range to span a city the size of Chicago. The maximum range with
WiFi is several thousand square feet, depending on which of the 802.11 standards you’re using. WiMax is being installed in a limited number of regions as
a replacement for smaller WiFi hot spots because they cover a larger geographical area.
Putting WiMax to use
The evolution of WiMax has ushered in a new way of doing wireless. Although
WiMax has not reached the marketplace to any great degree (as of this writing), manufacturers and service providers are developing models for how
to design and sell or lease wireless networks using WiMax technology. The
increased bandwidth and flexibility offered by WiMax are influencing how the
marketplace views wireless telephony.
When the 802.16 standard was formalized in 2001, it quickly became apparent
that WiMax had the potential for seriously changing the way we establish networks in metropolitan areas. The traditional model for network development
is to install a local loop at each site location (LAN) to be connected to the
larger overall network (WAN). Instead of running a T1 local loop to each location (at an expense averaging $450 to $1200 per month per location), you
could have one WiMax hub that wirelessly interconnects all four locations.
If you run VoIP over this WiMax network, you also reduce the cost of intersite
telephony to $0. You can also reduce the cost of your off-net regional (intralata)
telephony to the price of local calling. All VoIP on-net traffic would be carried
on-net to the closest of the four LANs, and there it would go out to the PSTN as
a local call.
If your company has other locations that are beyond the range of your WiMax
infrastructure, you can interconnect them by connecting all the WiMax hubs
at each metropolitan area. You can then run traditional dedicated transports
between the regional WiMax hubs.
For example, suppose you have a WiMax hub covering four offices in
Chicago. You could connect this hub via a dedicated line to a similar WiMax
hub that covers your offices in Los Angeles, Pittsburgh, or any other metropolitan area. Figure 8-1 shows how such a network would look if you didn’t
use WiMax. Figure 8-2 shows the same network redesigned to take advantage
of WiMax.
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Dedicated
transport
line (T-3)
Los
Angeles
MAN
Dedicated
transport
line (T-3)
Chicago
MAN
Pittsburgh
MAN
Dedicated
transport
lines (T-1)
Dedicated
transport
lines (T-1)
Ethernet
Figure 8-1: A
traditional
network
composed
of dedicated
lines.
West
Side
West
Side
Ethernet
North
Side
North
Side
East
Side
All phones are VoIP
enabled
North
Side
East
Side
All phones are VoIP
enabled
Los
Angeles
MAN
Chicago
MAN
All phones are VoIP
enabled
Dedicated
transport
line (T-3)
WiFi
connectivity
WiFi
connectivity
WiMax
Ethernet
WiMax
West
Side
Ethernet
West
Side
East
Side
All phones are VoIP
enabled
Ethernet
West
Side
West
Side
West
Side
West
Side
North
Side
East
Side
Pittsburgh
MAN
Dedicated
transport
line (T-3)
Figure 8-2: A
network
taking
advantage
of WiMax
technology.
West
Side
West
Side
West
Side
West
Side
Ethernet
North
Side
East
Side
All phones are VoIP
enabled
North
Side
East
Side
All phones are VoIP
enabled
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Getting Hip to WiSIP
Session initiation protocol (SIP) is a catalyst for the next phase of open
communications using not only IP telephony and VoIP but also the full suite
of IP-related protocols. SIP is an interoperable protocol designed to allow
equipment from different vendors to communicate with each other. SIP
enables new leading-edge VoIP calling features not available on traditional
phones, including features such as LDAP directory access, presence, and
multiple call appearance. (You find out about these features — and more —
in Chapter 10.)
WiSIP is the flavor of SIP that delivers advanced telephony features to other
WiSIP wireless phones or end-user devices. These devices can use WiFi and
WiMax connectivity to the Internet to bypass the conventional cell phone and
PSTN networks.
It is important to realize that you do not need a WiSIP phone to benefit from
the advanced features of VoIP through the SIP protocols. A VoIP end-user with
multiple endpoint devices such as a cell phone, a desk phone, a PC client,
and a PDA can rely on SIP to permit all these devices to operate as a single
system. SIP brings about increased efficiency and productivity.
In a VoIP converged network with SIP, organizations can choose from a variety of vendors to create a seamless converged communication network. For
instance, some equipment vendors use SIP to support trunking functionality.
(Trunking is a way to make a network support a protocol it might not otherwise support.) Other vendors may use SIP to control gateways and calling
features. The way in which SIP is used is entirely up to the communications
vendors. SIP allows their equipment to communicate with equipment from
other vendors.
SIP enables smoother conversions
SIP does to traditional telephone service what the World Wide Web does to
the Internet. In fact, SIP is a cousin of the main protocol of the Web, hypertext
transfer protocol (HTTP); both are text-based protocols. SIP has emerged at
the forefront of most if not all VoIP-related applications. SIP has been embraced
by the leading VoIP telephony manufacturers and is being built into VoIP hardware and software, including IP-enabled telephones.
SIP integrates with traditional circuit-switched interfaces and IP-switched
interfaces. This integration allows the user to easily convert from traditional
circuit-switched telephony infrastructures to next-generation IP infrastructures, including wireless networks supported by WiFi and WiMax.
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Using SIP today
Wireless SIP telephones enable the user to place telephone calls through any
WiFi hot spot, over the Internet, to anywhere in the world. The call bypasses
the PSTN; there are no fees, recurring charges, or any costs associated with
the call, except perhaps a charge for gaining access to the WiFi network. (You
could always go to another WiFi hot spot where there is no charge for access.)
If you use a WiSIP phone, there are absolutely no carrier charges no matter
where in the world you call. The downsides are the cost of the phone itself
and the fact that whoever you call with a WiSIP phone must also have a WiSIP
phone. In the future, this will undoubtedly change to enable any WiSIP phone
to call any wireless device regardless of type, provided the receiver supports
VoIP protocols.
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Chapter 9
Using VoIP on the Internet
In This Chapter
Understanding how your choice of network affects QoS
Examining protocols
Securing your network with firewalls
Making the Intranet accessible
Connecting with a virtual private network
T
he Internet is often referred to as a network of networks. The fact of the
matter is that the Internet is just another network, albeit with an enormous and global reach. You can access the Internet through the public
switched network (PSTN), your wireless personal digital assistant (PDA), or
your WiFi notebook at the coffee shop nearest you. You can use your broadband link to access data, voice, and video at home. Your company can access
the Internet through any of the dedicated transport lines. (Chapter 4 covers
all Internet access network types.) Slow-speed, high-speed, or ultra-highspeed avenues of access can all work simultaneously to support millions of
users accessing some portion of the Internet somewhere in the world.
No other network in the world has such a level of accessibility. But this
accessibility also makes the Internet inherently less secure than other networks. Whenever a company establishes a connection between their dedicated network and the public Internet, they open their dedicated network up
to many of the same security hazards endemic to the Internet.
Regardless of the hazards, many companies need to provide Internet access to
their employees and open at least a part of their private network to the public
through the Internet. Companies establishing Internet connections need to be
concerned about security — period. Corporate sabotage, identify theft, and
denial of service attacks (common on the Internet) have generated billions
of dollars in losses. Although these threats pertain largely to computer data
applications, and not VoIP voice packets, anything that negatively affects the
overall network can also affect VoIP applications. There is no doubt that corporate use of the Internet has raised the bar on network security.
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This chapter discusses two primary issues related to VoIP and the Internet.
First, it discusses using VoIP over the Internet, particularly the quality of the
VoIP connection over the Internet. The second issue is related to security:
connecting your VoIP-enabled network to the Internet and still ensuring the
safety of your servers and data.
Network Options Affect
Quality of Service
Running VoIP over the Internet is an option, but it is clearly not the best
option for most companies. The goal of any VoIP implementation is quality of
service, and the key to achieving that quality is figuring out what is best for
your specific network configuration.
Most companies install an intranet to facilitate internal access to applications
and data. An intranet is a network that uses the same protocols and tools as
those used on the larger Internet, such as e-mail, Web browsers, and instant
messaging. The difference between an intranet and the Internet is that an
intranet is private, typically created for the access of employees and selected
vendors or customers, whereas the Internet is public and open to anyone.
You do not need a connection between an intranet and the Internet, but if
your company chooses to create a connection, it uses a firewall with a gateway at the connection point. These allow a company to monitor and secure
traffic over the connection. With a firewall and gateway in place, a company
protects itself against Web-related traffic affecting their private, dedicated
network — including their VoIP network.
Some small, single-location companies that cannot afford their own private
wide area network use the Internet as a medium for transferring VoIP traffic
from their LAN to the outside world. If voice communications are critical to
this business, I don’t recommend running VoIP this way because the quality
of the voice calls is at the mercy of factors out of the company’s control. It is
better (and more secure) to use a VoIP hosting company. This separates VoIP
traffic from all other Internet traffic while keeping the rest of the network in
place.
Large companies with many sites often use private, dedicated transport lines
to ensure the requisite quality for their VoIP traffic. The network uses highbandwidth connections between major company facilities, with smallerbandwidth connections to the smaller company sites. In companies with a
myriad of site locations, it is common to establish large regional hubs for
their networks. Each smaller site connects to its respective regional hub
using dedicated transport lines, sized according to their bandwidth needs.
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Provided that the company’s dedicated network has enough bandwidth,
intranet traffic can also be run over the same connections. If Internet access
is needed over the company’s network, they often establish an Internet connection at one of their facilities (such as company headquarters) and then
use that connection to provide Internet access to remote sites on the company network. This type of access plan provides a way for companies to limit
the number of firewalls and gateways necessary, as well as minimize Internet
access fees.
Figure 9-1 illustrates a typical regional hub for a company running both VoIP
and an intranet. VoIP calls get carried on the private dedicated network. The
private network is physically separated from the corporate Internet connections and, therefore, the actual Internet. Notice that the firewall controls all
traffic from the Internet for security purposes. It also controls access for nonemployees accessing the corporate intranet through the public Internet.
(Firewalls are discussed later in this chapter.)
St. Louis
Dallas
Chicago
Los Angeles
Other sites
Private dedicated
VoIp Network
Internet
Dedicated network
transport line
Dedicated
line
Gateway
router
Intranet
DMZ
Protected
segment
IP
Firewall
Core LAN
switch
Voice mail
server
Figure 9-1:
Regional
hub for a
large
multisite
network.
Data
server
IP
Switch
PSTN
gateway
DNS
server
Telephony server
PRI
PSTN
Web
server
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Internet Protocols and Quality of Service
As discussed in Chapter 1, TCP/IP uses a layered approach to networking.
When VoIP is the network transport service, the UDP protocol is substituted
for the TCP protocol. UDP (user datagram protocol) is one of the many protocols included in TCP/IP, so VoIP can be made to run on any network type.
The Internet is not the only network that supports VoIP. Any network —
private or public — that runs the TCP/IP protocol suite can run VoIP. Quality
of service varies from network type to network type, and the ISP you choose
can affect the QoS you experience.
ISPs make the Internet go round
An Internet service provider (ISP) is a company in the business of providing
Internet access to consumers and businesses. It is common to rank the quality of ISPs based on their tier level (see Figure 9-2). Tier-0 is a logical ring
formed by all the Tier-1 ISPs. Tier-1 ISPs are considered the largest and usually the best type of Internet access because there is only one “hop” between
the tier-1 ISP network and the end-user’s network.
Global Internet
Tier-1 level
OC-192 transport
T3 Line
Tier-2 level
OC-48 transport
Private
network
Tier-3 level
Figure 9-2:
PRI
The tiered
Access for
nature of
dialup customers
the Internet.
OC-3/12 transport
ISPs below tier-3 typically use
a T1 line or PRI or a group of bonded T1 or PRI lines
Access for
corporate
dedicated
accounts
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In geek speak, a hop is a connection between networks. Thus, if a packet travels from your network to your ISP’s network, that is one hop. If the packet then
travels to a larger carrier (perhaps someone from whom your ISP leases lines),
that is another hop. It is not unusual for packets traveling through the Internet
to go through fifteen, twenty, or more hops from source to destination.
National and international ISPs are all tier-1 and typically have multiple, ultrahigh bandwidth pipes connecting them into the core of the Internet. Regional
ISPs tend to be tier-2. Smaller ISPs that acquire their Internet access through
a tier-2 ISP are tier-3 ISPs. A few ISPs operate at the tier-4 and tier-5 levels.
When it comes to VoIP, each hop adds transmission overhead that may diminish the overall throughput of the call. On the one hand, if the network types
involved in providing the end-to-end connection are using strictly dedicated
bandwidth transports (see Chapter 7), you may not notice degradation. On
the other hand, if you are using an ISP (regardless of their tier) that uses
switched transports somewhere in the end-to-end connection, you are going
to experience some degradation. This is because switched lines do not pass
packets as well as dedicated lines. (That is why VoIP networks are designed
using dedicated transports for on-net traffic and use switched lines only
when it is necessary to go off-net to the PSTN.)
Depending on the number of hops over the Internet and the types of network
lines between the VoIP caller’s network and the VoIP receiver’s network, there
may be delay; it is inevitable when using the Internet. Having multiple hops
does not necessarily equate with a poor connection, but it can be a significant factor.
How you choose to access the Internet and whether you then use the Internet
to support VoIP are choices you need to make. In general, for companies with
more than four or five locations, the Internet is not a good choice for VoIP,
although it may be a good choice for transferring computer data.
Examining protocol layers
You already know from Chapter 1 that VoIP runs with and requires the use
of TCP/IP protocols. The good news is that the way these TCP/IP protocols
work for data networking is the same way they work for VoIP, with the exception that VoIP utilizes UDP instead of TCP and also requires that some additional information be packaged with the data packet.
In the process of being transmitted from source to receiver, VoIP data follows
the same process to construct and transmit packets as is followed by other
TCP/IP data packets, as shown in Figure 9-3. The difference is that UDP is
used instead of TCP at the transport layer; this is probably the most significant difference between computer data packets and VoIP telephony packets.
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“Hello! how are you?”
Surfing the Web
Application
NTP - RTP - RTCP
UDP packet part
Figure 9-3:
Differences
in TCP/IP
implementation for VoIP
and data
packets.
HTTP
Transport
PC
TCP packet part
IP address packet part
Internetwork
IP address packet part
MAC address packet
(frame) part
Network
interface
MAC address packet
(frame) part
Physical electronic
signaling outbound
Physical
Physical electronic
signaling inbound
Because VoIP packets are constructed pretty much the same way as data
packets, VoIP can run on any type of data network that utilizes TCP/IP.
Because most corporate networks already handle TCP/IP traffic, the fact that
VoIP packets can travel on the same network means that converting to VoIP
can be relatively painless.
Firewalls for Security
Many of the security measures devised since the early 1990s have been centered on protecting private networks from the public Internet. Today the
larger corporate networks use a firewall when connecting their private networks to the Internet. They then can run VoIP on their private network without threat from the Internet.
In the same way, smaller companies with fewer than four or five locations can
elect to go with a private network in a similar way. But depending on their
business needs and total number of employees, it may make more sense to
use a virtual private network (VPN). VPNs present interesting firewall security challenges. (More on VPNs in a virtual minute.)
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Consumer VoIP and firewalls
Consumers running VoIP over their broadband
service have little to worry about with Internet
security. No doubt someone will try to sell you
a firewall security package to protect your VoIP
service from a virus attack, but it would be foolish to spend the money.
Broadband providers and VoIP carriers include
with their services a first level of firewall security. Your VoIP calls have firewall security first
from your VoIP carrier and then again when
your voice packets travel through your broadband provider’s network.
Does this VoIP protection keep you safe if you
download unsafe data files to your computer?
No! You still should have a firewall security
package running on your computer that protects you against nasty, corrupt, data Internet
files. You don’t need such protection for your
VoIP calls, however.
Most of the security measures utilized today read and inspect the packets
that traverse the network. Security therefore comes down to deciding where
in the network the packets will be examined and what type of systems you
will use to monitor the packets. For most companies, the examination location is at the connection point to the Internet, as described earlier in this
chapter.
Companies that implement a VPN require each location on that VPN to use
a firewall to access the Internet. If the company is to run VoIP over the VPN
with good QoS, each site must use private, dedicated transport lines to connect their respective locations to the Internet.
The firewall must be configured to support tunneling of VPN traffic. Tunneling
is a method for ensuring that packets traverse the public Internet in a secure
manner that prevents disruption. With this type of network infrastructure,
each location’s LAN is secure from outside Internet threats and VoIP telephony traffic is carried over the Internet.
Three major categories of firewalls are available. Each comes with a different
price tag and level of sophistication or complexity. Depending on the firewall,
a company may need to have full-time skilled staff or corresponding contractors available to set up, program, and maintain the system.
The three types of firewalls follow:
Packet filter: This is a simple firewall that entails only nominal cost. Some
are even free. Consumers, mobile users, and very small businesses use
the low-end flavors that cost from $0 to $59. Some small companies use
router devices that come preprogrammed with this level of firewall security and cost from $800 to $2500.
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Proxy server: Full-fledged proxy servers tend to be complex to establish
and maintain. They are more suitable for use at a single location. Because
they must first permit unwanted packets on the network before they can
discard such traffic, they are controversial in multisite networks. Costs
range from $5000 to $15,000.
Stateful event monitor (SEM): These firewalls are the most comprehensive and therefore the most complex. They are typically used in large
networks that have an inside protected network that needs to be separated, at the physical layers of the network, from their public Internet
access network and their semipublic intranet network. SEM firewalls can
examine the entire contents of any packet it sees, make decisions based
on any field contained in the packet, and, like any firewall, can reject any
packet from access into the company’s protected network or even to its
intranet. SEMs include extensive network management capabilities.
Costs range from $24,000 to $35,000.
Figure 9-4 illustrates how a SEM firewall does its duties. This is the same type
of firewall used in large networks, such as those shown in Figure 9-1. Most
large corporate networks don’t use VoIP over the Internet. VoIP packets
instead traverse the company’s private dedicated network and never even
see the other side of the firewall.
Internet
Dedicated
transport
Router
To DMZ or
commerce
segments
To protected
Figure 9-4: (inside) network
segments
A SEM
firewall.
SEM firewall
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A SEM firewall protects the network it runs on in many ways, but its main
duty is to read packets that arrive at its “doorstep” and decide whether the
packet is authorized to be there. If the packet is bad, the firewall discards it.
If the packet is from a friendly network or user, packets that most likely are
from customers and visitors, it may permit access to a portion of the company’s intranet. If the packet is from an employee or other authorized person,
the firewall permits access to the inside protected network, to the resources
the person is authorized to have.
If you have a VoIP phone that includes Web features — such as displaying
Web pages — these features require fetching data that travels through the
corporate firewall. This data, however, is standard Web data; it is not VoIP
packets, which remain on the dedicated network.
Connecting Through a VPN
If the Internet must be used for your company’s VoIP traffic, you have only
one option to consider: a virtual private network (VPN). It has proven to be
both cost-effective and capable of delivering good quality VoIP service for
companies with limited VoIP needs.
The term virtual private network is an apt description. The virtual component
was intended to convey virtually anywhere. The private is derived from the
fact that a VPN uses private dedicated transports at each location on its network to connect to each of their respective local ISPs.
The VPN concept emerged in the early 1990s as a way to transfer data
securely over the Internet. Consider the case of a small company with two
locations, one in New York and the other in Los Angeles. Instead of using a T1
line to connect the offices at a cost of $12,000 per month, the company would
pay $1200 per month to get a T1 connection at each location from a local ISP.
They would then use the Internet as the backbone network to do countless
computer data applications. Figure 9-5 shows an example of a VPN that connects three locations.
Historically, the use of the Internet as a network backbone is called extranetting, or riding the Internet for free. In the 1990s, VoIP and security issues were
not even in the picture.
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LAN side
SEM firewall
with IP tunneling
Internet
SEM firewall
with IP tunneling
LAN side
Figure 9-5:
A simple
three-site
VPN.
LAN side
SEM firewall
with IP tunneling
Today, any discussion of using the Internet as the backbone of a private network inevitably leads to a discussion of VPN. VPNs require some sort of
secure gateway, firewall, or router at each location connected to the network.
Private, dedicated transport lines are used to connect each location to their
local ISP. Each gateway is configured to route all traffic — including VoIP
traffic — over the Internet to each of the other locations in the company, as
well as to the Internet generally.
Because of the contentious nature of the Internet and the high cost of securing each VPN location’s network, VPN designs are proving to work well when
the network has no more than five to eight locations and less than twenty
people per location. However, no significant studies have determined what
the maximum permissible number of users per location should be.
Before implementing a VPN, a company must undertake a thorough analysis
to assess calling patterns, call volumes, hardware needs, bandwidth requirements, Internet access, and security needs — for each location on the VPN.
After your present network requirements are determined, you also need to
plan for future growth. All of this would then need to be balanced against the
total cost of operation and the complexity of having a VPN.
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VPN costs
In a VPN design, each site bears the full cost of the following:
Dedicated private connection to their ISP
ISP Internet bandwidth access
Terminating hardware including firewall and router (minimally)
These costs are much higher than a typical single site’s cost to connect to a
larger private dedicated network due to each VPN site’s need to have their
own Internet access. VPN sites also require more complex network hardware
configuration. However, after the connection is set up, no other recurring
costs are involved because the Internet is basically a free ride. Consequently,
running VoIP over a VPN can be very cost effective if the configuration can be
completed in a manner that ensures security and high QoS.
The more sites added to a VPN supporting VoIP telephony, the less costeffective it may become. Remember that each site added requires their own
high-speed access to the Internet, their own router, and their own firewall.
You also must consider the administrational burden for network administrators (for managing that firewall and router). All this doesn’t come cheap.
Ultimately a point is reached where establishing a dedicated network
becomes more cost-effective than continually upgrading your VPN. Exactly
where that point is depends on many factors, but the primary ones are distance between offices and the number of offices you need to connect. Your
company should do a thorough analysis to determine exactly which
approach is best for your goals.
If your company has quite a few mobile or remote users, establishing a VPN
may make strategic sense. Their personal computers can function as routers
and firewalls, and the fact that they can connect to the company network
over the VPN from any Internet access point can be a big plus. Make sure you
consider the needs of your mobile and remote users in any analysis you
undertake.
Implementing a VPN
VPN hardware and software technology has evolved into two distinct categories: gateways and firewalls. Gateways allow individual LANs to connect to
the Internet. They can perform VPN-related tasks, as well, such as encrypting
and decrypting data transferred through the gateway. The gateway physically
connects each LAN to the transport lines used for Internet access.
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Gateways include software that enables the network administrator at each
site to manage the network. Anyone attached to the LAN would then be able
to access the Internet-based external network and any of the other corporate
LAN sites attached to the VPN. Through the use of IP-enabled telephones or
digital telephones optimized to support VoIP, any user can make VoIP telephone calls to anyone at any of the sites on the VPN.
Mobile users connect to the VPN through client software (provided with the
gateway) installed on their laptop. When the user is in the office, the laptop
connects to the VPN just like everyone else’s computer. When away from the
office, the mobile user uses the client software to access the corporate VPN
through any Internet access port. To support VoIP telephony, the user needs
to run IP soft phone software on the computer. After obtaining access to the
VPN, the user can make and receive VoIP telephone calls through the IP soft
phone.
Firewalls, the other VPN category, are used to implement security on any network to which they are attached. (Firewalls were discussed earlier in this chapter.) Privacy and protection are important when using the Internet for any
service, including VPN and the VoIP services that may operate over the VPN.
Part of the complexity involved with the design of a VPN is the configuration
of the firewall and other computers exposed to the Internet. But this complexity enables each location on the VPN to nail down tight security. Through
the gateway or through a separate additional firewall device, each site can
set up protection from unauthorized intrusion.
The Internet Engineering Task Force (www.ietf.org) has developed the IP
Security protocol suite, or IPSec. This is a set of IP extensions in the form of
software, just like the entire TCP/IP suite of protocols. IPSec is installed on
the gateway (or separate firewall if used) to monitor each packet that passes
through. Unauthorized or questionable packets are discarded prior to entry
into the protected segments of the network.
Many variations of VPNs and hundreds of VPN service providers are available. To make the best decision regarding a VPN, do your homework and
investigate the options available. It is worth your time to meet with various
companies and solicit bids for implementing your VPN. The more you know,
the better decisions you can make.
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Chapter 10
Telephones and VoIP
In This Chapter
Summarizing VoIP phones
Checking out hard phones for the desktop
Using soft phones for the computer
Choosing wireless IP phones
Protecting your existing phone system investment
D
epending on the number of people in your company, the mere thought
of purchasing replacement phones could make you nervous. That’s why
one of the first questions people ask when considering VoIP is whether they
need to buy new phones. The answer to that question rests primarily with
the type of telephone system your company already has.
This chapter examines the ins and outs of telephones and VoIP. You discover
the options for new equipment, as well as how you can use your existing equipment with your new VoIP system. To keep you from tripping over your tongue,
I’ll refer to VoIP phones instead of VoIP-enabled phones. A VoIP phone simply
means a phone capable of placing and receiving calls on a VoIP network.
Running Down the Three
Flavors of VoIP Phones
Unlike older telephones that must be hardwired to a PBX, VoIP phones connect directly to the LAN, just like a computer. LANs use a different type of
cabling than traditional telephony systems, so VoIP phones have a built-in
network interface card (NIC) that provides the connection port for the LAN.
VoIP phones also have their own MAC address, which is required for peacefully connecting to an Ethernet network.
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Some models of VoIP phones come with extra Ethernet ports. You plug the
phone into the network, and then plug the computer into the phone. The benefit is that you need only a single network connection to connect both phone
and computer. This can save your company money.
Many makes and models of VoIP telephones are available. As was the case
with cell phones a decade ago, discounts, rebates, and other inducements
are often offered to customers to entice them to buy VoIP phones. Some VoIP
providers reduce the cost of the phone or give it away in return for a longterm service commitment of two years or more.
VoIP phones can be plain-Jane and basic, or they can be full-featured and support videoconferencing and Web surfing. You can even put free VoIP software
on your computer and eliminate the VoIP phone altogether. VoIP has introduced a new way of viewing the telephone.
Following are the three distinct categories of VoIP phones:
Hard phones
Soft phones
Wireless phones
Phones in these categories vary depending on many factors besides price, as
you discover next.
VoIP Hard Phones
If you can see it, feel it, and tether it with a network cable, and if it includes a
traditional phone keypad, you have a VoIP hard phone. More phones are in
this category than in the other two categories combined. Because there are
more makes, models, and manufacturers, competition helps lower the price.
Even though there is much diversity in this category, two things should be
common to every VoIP hard phone: support of TCP/IP protocols (mandatory
for VoIP) and at least one RJ-45 connection port.
The RJ-45 connector on a hard phone is an Ethernet port used to connect the
phone to your network. Through this port, your phone can communicate
with any other IP-based device on the network. These devices include
servers that keep track of everybody’s telephone number and voice mail,
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other VoIP phones, the gateway to the PSTN (for off-net calling), and the
router that takes care of establishing a connection to other VoIP phones on
the network (on-net calling).
The RJ-45 port looks like a regular phone jack (RJ-11), but it’s a little wider. In
Figure 10-1, the jack on the left is an RJ-11 and the one on the right is an RJ-45.
It is the jack on the right that you would use to connect this VoIP hard phone
to the network.
Figure 10-1:
Connections
on the back
of a VoIP
hard phone.
Some VoIP hard phones come with multiple RJ-45 ports. These phones have a
built-in switch, which means the phone can be used like an Ethernet switch to
connect more Ethernet devices (such as a computer or a networked printer)
or even another VoIP phone.
The VoIP hard phone looks the most like a traditional desk phone. Hard
phones can be broadly categorized as basic, intermediate, and advanced
phones, based on their capabilities.
Basic hard phones
Basic VoIP hard phones look like a traditional desk phone. The dialing pad is
clearly distinguished. This type of phone is considered a basic, entry-level IP
phone that delivers good VoIP telephony service. That is, it makes and receives
telephone calls over the VoIP network (on-net) or the PSTN (off-net). You could
find such a hard phone on the desk of a staff person or in common areas such
as the lobby or hallway of any typical company.
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Intermediate hard phones
An intermediate VoIP hard phone has a large screen and many more hard buttons compared to the basic hard phone. Intermediate phones can do anything
that the basic hard phone can do plus more. This phone can often do Web
browsing and access the company phone directory.
Advanced hard phones
Advanced hard phones take VoIP telephony to a new level. They usually
include color video displays and multiple telephony-related applications.
These phones have fewer hard buttons than intermediate hard phones
because the phone’s screen and software can enable many more functions
than could be manufactured into the phone’s chassis.
Figure 10-2 shows an example of an advanced hard phone. This hard phone
delivers not only exceptional services and features but also a true and complete interface to the Web.
Figure 10-2:
Advanced
VoIP hard
phone.
Features supported
Telephony features can be delivered in two ways:
As a function of your VoIP hard phone
Through the VoIP network to the phone from another device attached to
the network, such as a server or a telephone controller
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In the older world of telephony (pre-VoIP), features were known as call features, line features, or system features. You paid for these features each month,
sometimes on a per-line basis. This may not seem like much in the grand
scheme of things, but if you or your company have multiple lines, feature
costs can significantly increase your monthly phone bill.
In the VoIP telephony world, all features are free.
The VoIP hard phone itself plays a role in exactly what type of features you
receive. Its common features (like those on traditional phones) include the
following:
Hold
Conference call
Transfer
Drop call
Redial
Volume up and down
Mute
Speaker
Messages (voice mail, including an indicator light)
The basic VoIP hard phone also provides at least two call appearances, the
ability of the phone to bring up and maintain separate telephone calls as if
you had separate physical lines. Call appearance buttons are usually located
near the Hold button and labeled 1 and 2.
Intermediate phones usually include a flat screen. Some of the more expensive ones provide for limited Web browsing. These hard phones also come
with the ability to receive their electric power from the network. This means
the LAN can provide the power the phone needs through its network connection. (You may hear this referred to as power over Ethernet or simply PoE.)
As a result, you don’t need to plug in a power cord at your desk.
Traditional features found on any basic VoIP hard phone are provided by buttons on the phone. The intermediate phone usually includes several buttons,
but it also has many other features provided through its software and screen.
Common features on intermediate phones include the following:
Graphical display screen
Presence indicator lamp
Multiple programmable feature keys
Application buttons that parallel the screen (you can set these up to, for
example, bring up your speed-dial list or browse the Web)
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Integrated switch ports for connection of the PC
Full-duplex speakerphone (people can talk and hear simultaneously)
Integrated headset jack
Multiple language support
Support for simple network management protocol (SNMP)
Hearing-aid compatibility
Multiple personalized ring patterns
Voice media encryption
Some people refer to advanced hard phones as appliances because they do
more than just allow you to carry on traditional voice conversations. For
example, they usually provide Web-related features and may include other
applications. Advanced VoIP hard phones include all the features found on
basic and intermediate phones. With its larger video screen, the advanced
hard phone represents an amalgamation of both computer and VoIP phone.
If it weren’t for the hard telephony dialpad buttons, you might confuse the
advanced phone with a computer.
In addition to the features already listed, the advanced hard phone includes
these features:
Phone: Allows the advanced phone to use capabilities offered through
a telephony server or other telephone system connected to the VoIP
network.
Directory: Provides access to the corporate LDAP (lightweight directory
access protocol) server on the network. With this type of access, you
don’t have to even dial the number. You can look up the name on the
LDAP and press one button; the network takes care of the rest.
Web access: Advanced hard phones have expanded access that is closer
to what you might expect from the browser on your computer. Web
access capability often includes support for Java applets (self-contained
programs created in the Java language).
VoIP Soft Phones
If your computer is connected to a network using TCP/IP, you have the capability to run a VoIP soft phone. Soft is a term that comes from past references
that compare printed output (hardcopy) to screen output (softcopy). In
other words, if something is based on your computer screen, it is soft.
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Like the VoIP hard phone, the computer running the VoIP soft phone needs to
have LAN access. The big difference between the two is that the soft phone
has a “soft” dialing pad on the screen instead of a “hard” dialing pad on a
physical phone. To dial a number, you use the mouse to point and click. Some
versions offer touch-screen dialing.
Besides the need to have the appropriate audio functionality in your computer (sound card and speakers or a headset), the viability of using a soft
phone really comes down to three things:
The network
The quality of the software
The type of computer you’re using
If you are in the corporate world, the network is already established. There
are options if you are mobile and working on a laptop, but your workplace is
still managed by the company. At home or for consumer use, the Internet is
your network.
The software is the application that interfaces with the network using the
TCP/IP protocols required by VoIP. At work, your company provides the software. For home or leisure use, you can program your own soft phone software or download one of the many packages now available on the Web. The
going rate for these plans start at about $30 per month.
Be careful not to give out your credit card information unless you are ready
to sign up with a VoIP provider, and be particularly wary of giving information
to any third-party who says they are selling VoIP services. As with any transaction of this manner, it makes sense to safeguard your financial information
as best you can.
One benefit of soft phones versus hard phones is that the soft phone doesn’t
have to be connected to the network using a cord. Soft phones can run just
as well on a computer that supports wireless (WiFi) networking as they can
on a computer that is connected to a network through a cable.
That leaves the third element: your computer. Fortunately, you don’t need a
lot of computer power to run a soft phone. If the computer can connect to
the network, it should support a soft phone. There are two categories of computers: stationary and portable.
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Stationary computers
VoIP soft phones do not necessarily have to be on a laptop, a notebook, or a
tablet PC. These phones run just as well on a stationary (desktop) computer.
Depending on your needs, a soft phone can eliminate the costs associated
with a hard phone.
Also, VoIP soft phones can support videoconferencing. If you need to run
video, the computer screen has an obvious size advantage over a video
phone’s screen. Figure 10-3 shows a soft phone on a computer screen.
Figure 10-3:
A soft phone
running on a
Windows
PC.
Portable computers
Portable computers include laptops, notebooks, and tablet PCs. If you can
carry it into a nearby coffee shop and carry a cup of coffee at the same time,
it is a portable computer. One disadvantage of a portable computer compared to a stationary computer is the size of the screen for the dialing pad.
Another disadvantage is the cost of the computer itself. Here is a case
where less is more. Portable computers are almost twice as pricy as desktop
computers.
An advantage of using a portable computer is that you can take the computer
with you, wherever you go. Today, portable computers are coming off the line
as light as two pounds or less. My tablet PC weighs in at 2.2 pounds, but it
cost almost $2000.
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Portable computers are also more likely to include wireless networking
capabilities.
Features supported
Soft phones generally don’t provide the same level of calling features that
you get with a hard phone. Soft phones run on your computer, and all features are implemented and accessed through the screen. Hard phones, on the
other hand, include buttons and software optimized for quick use. The types
of features provided with soft phones are generally limited when compared
to hard phones.
The better versions of soft phones are generally Windows-based, so the software has a graphical user interface (GUI) that enables your computer to do
VoIP telephony over the network. In its most basic form, the software needs
to display the dialpad for making calls. It also needs to interface with your
network using TCP/IP protocols.
Because soft phones work with Windows, you can use Microsoft Outlook and
a Web browser to access contact lists (including LDAP-based directories) and
the phone numbers stored within these applications. You can also do instant
messaging and VoIP calls simultaneously. At present, this is about as good as
it gets for call features.
Many versions of soft phone software are available. Most companies go with
a proven market leader and standardize on a soft phone version for all
employees. (See Chapter 18 for a list of top VoIP manufacturers.)
Consumers, on the other hand, can choose from (and may be bewildered by) a
number of different flavors of soft phone software available over the Internet.
See whether someone you know has installed the software and has had a good
experience with it. When you look at which VoIP carrier to use, request a trial
download of their soft phone software. If they require you to go and get your
own soft phone package and merely sell you the VoIP carrier service, consider
using a different carrier.
VoIP Wireless Phones
Several types of wireless phones are available. The first type are IP wireless
phones, which have a limited range and are strictly tied to corporate networks. For example, a hospital or a large construction site may have wireless
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networking and VoIP available over that network. VoIP wireless phones hook
into the network and do VoIP within their specified range. Features on these
types of phones are generally limited.
One thing to watch for in IP wireless phones is whether they are WiSIP compatible. If they are, the phones can include quite a few features not normally
available, such as the ability to connect to WiFi networks and IP-PBXs without the no-peak or off-peak minute charges. These types of phones cost a bit
more, but they make calling other WiSIP phones very easy.
Finally, it can be argued that a pocket PC with VoIP capability is, indeed, a
wireless phone. These types of computers do everything that a cell phone
can do. If the pocket PC has built-in WiFi capability, you can use it to make
VoIP calls in addition to regular cell calls.
Maximizing Your Current
Telephone Investment
If you are pondering the move to VoIP but are thinking about your company’s
significant investment in existing telephone sets, read on. Your company is
just like the majority of companies today still running on a PBX model, with
lots of digital phone stations that were not cheap and a system that represents a sizable capital investment.
Upgrading older telephone systems
Most KTS and PBX models use digital telephones that have a great deal of
capability and flexibility. (Both KTS and PBX systems are discussed in
Chapter 11.) If your company is currently running a PBX manufactured in the
last three years, it’s a safe bet that all your telephones can operate in the new
VoIP environment.
Some upgrade adjustments will be needed to your current PBX systems, but
the individual telephone sets that connect to the PBX need no such upgrade.
For instance, the PBX may need to have an interface card installed so it can
connect to the LAN, but the individual phone sets would not need such an
upgrade.
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All devices in a VoIP network must have a MAC address, which is procured by
installing a network interface card. Pure VoIP phones have their own MAC
address, but when a PBX is being upgraded to work with VoIP, a NIC must be
added to support this requirement. After the PBX gets its NIC and its own
MAC address, all the telephone sets connected to the PBX can share the
PBX’s MAC address.
Non-VoIP digital phones use the inside house wiring to connect to the circuitry of the PBX. Nothing much changes on these phones except that the
PBX that they have always connected to is now also connected to the VoIP
network. Figure 10-4 illustrates this arrangement.
Telephone
gateway
PBX
Digital or
analog circuit
lines
Older digital
telephone
stations
Database
server
Ethernet
Figure 10-4:
Using an
older PBX
system with
a VoIP
network.
PSTN
PSTN
gateway
VoIP
telephony
server
These older telephones can enjoy the traditional features that come with any
telephony connection. For example, voice mail can continue to be delivered
via the network to the PBX telephone stations connected to it. Voice mail
would be stored in the mailboxes that have already been allocated by the
PBX administrator. Your company would not even have to reassign telephone
numbers or mailboxes. Other features such as call transfer, call forwarding,
and conference calling are all still available.
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Using older telephones on
the new VoIP network
One of the big differences between older digital phones and the newer VoIP
phones is their respective call feature sets. For PBX telephones, traditional
call features are delivered over the existing telephone wiring, not the LAN
wiring or WiFi network utilized by the VoIP network.
However, these PBX telephones do not have a LAN connection port or the
advanced features provided through VoIP telephones. If you need to provide
any VoIP advanced features to a subset of your employees, your company
must acquire the appropriate VoIP phones.
Figure 10-5 illustrates how VoIP telephones can coexist on a VoIP network
with a traditional PBX and its older non-VoIP digital phones.
VoIP
phone
Telephone
gateway
PBX
Digital or
analog circuit
lines
WAP
VoIP
soft
phone
Older digital
telephone
stations
Figure 10-5:
Using a PBX
and VoIP
equipment
at the same
location.
IP soft phone
pocket Pc
Database
server
Ethernet
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PSTN
gateway
VoIP
telephony
server
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Making the Move
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In this part . . .
he bottom line is, well, the bottom line! The chapters in this part disclose exactly how you can figure
out the bottom line for any VoIP conversion for your
company.
Using base information and illustrative case studies, you
discover how to compare costs and calculate savings. The
numbers can tell you exactly whether a change to VoIP
makes sense for you.
Making the move to VoIP can be challenging, regardless of
how many locations your company has. The information
in this part is essential to helping management focus on
the benefits of any proposed conversion.
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In This Chapter
Watching the charges disappear
Recapping the final four telephony models
Unifying telephone and computer networks
Convincing upper management to switch to VoIP
W
hen VoIP was introduced, many analysts projected savings for companies choosing VoIP versus companies continuing to operate with
circuit-switched telephony systems. But a number of these first-adopters ended
up frustrated with the earliest forms of VoIP, mostly because the systems were
based on using the Internet as their network backbone. (As you discover in
Chapter 9, the Internet doesn’t provide the optimal infrastructure for companies
with heavy telecommunications needs.) As a result, the majority of companies
back then continued to operate with circuit-switched telephony systems.
VoIP has matured since its inception, and today saves companies huge amounts
of money. It provides a great quality of service over private, dedicated networks.
Moreover, VoIP enables a number of slick calling options. VoIP features enhance
the collaboration of employees across the enterprise and ultimately increase
productivity while reducing the operating expenses of the company.
This chapter includes details that you need to consider when planning for
a VoIP conversion. Here you find information about your current telephony
system and how you can realize savings by converting that system to VoIP.
You also find ways in which you can convince your corporate decision-makers
that they should give the switch a try.
VoIP Comes and the Charges Go
One of the big “aha moments” with VoIP is that companies can enjoy an
immediate cost benefit with their toll charges. VoIP can save money in other
ways, as well. You won’t need to pay any additional per-line feature charges
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because VoIP runs on your computer network. Regulatory fees, surcharges,
and taxes are applied on a per-line basis. As you reduce the number of lines,
the line cost and recurring charges go with them.
Reducing or eliminating phone lines
If you can eliminate one or more of the lines that you lease from the carrier,
the call feature charges, the regulatory fees, and the taxes are also eliminated. Reducing the total number of lines really makes a cost difference.
In the POTS/PSTN way of doing telephony, you get additional lines as you
need to increase your capacity. In the VoIP way, you can upgrade your bandwidth on your dedicated line to increase capacity.
There are several disadvantages for companies that use POTS/PSTN rather
than VoIP telephony. POTS-related lines are leased from a carrier. Just leasing
a single line incurs added expenses. For example:
Each line usually has a nominal startup charge.
Each line has a monthly recurring access charge.
For each POTS line, the company must pay monthly recurring usage
charges. (Chapter 3 provides a breakdown of charges and charging
categories.)
All recurring charges are based on a rate per minute per line. When you add
up all the minutes from every line in operation at each of your company’s
locations, the monthly cost can get into serious amounts of money.
If your company has separate telephony and computer networks and the
company has significant aggregate toll volume, you can reduce or eliminate
most of your charges by converting to VoIP and running your telephony over
your computer network.
Take off your add-on charges
Traditional phone service normally includes costs that apply to every single
line you lease. Just like any other service, traditional telephony lines and services are taxed. Depending on where you are located, you could have one or
more taxes in addition to all the other monthly charges. Taxes are based on
the total cost of your line access and other services. For instance, for each
line’s total service cost, you can add the following taxes to the bill:
Federal tax (about 4 percent)
State tax (varies by state but the average range is 5 to 7 percent)
911 emergency surcharge fund (flat rate of $1 per line)
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Taxes obviously affect your bottom line. VoIP, however, does not come
with any taxes or surcharges. VoIP is totally unregulated and operates
over your existing computer network. Therefore, taxes do not apply to
your monthly bill.
Yippee! Deregulating your telephone costs
POTS/PSTN lines and services also involve other monthly regulatory fees.
These are charges that go to various government entities. These fees are
based on a percentage of each line’s monthly access cost:
Universal service fund (3.5 percent)
Interstate access surcharge (20.9 percent)
Telecommunications relay surcharge (0.1 percent)
These charges are based on a percentage of the monthly per-line access cost,
but before you draw any conclusions about these costs being nominal, add
up the number of lines and the total cost. Depending on where all of your
locations are located (that is, which LATAs), these regulated fees vary somewhat. For a corporate customer, if you calculate about 4 to 7 percent of your
total monthly access costs, you can get a close estimate. If you are a consumer, these add-on fees can be as high as 20 percent of your total monthly
telephone bill.
With VoIP, you pay regulatory fees for your dedicated network transports,
but you already pay these in support of your computer data network. VoIP
runs over your packetized computer network, so you have no more taxes,
add-on costs, or other regulatory costs for VoIP telephony.
Free call features
Calling features include items such as voice mail, call forwarding, call transfer, return call, and three-way calling. Traditional telephony requires you to
pay a monthly charge for call features. These add-on charges may not apply
equally to all the lines you lease because the features are optional.
Some call features are so popular, many people think they are a part of the
telephone service and are expected to come with the access line. Voice mail,
for instance, is considered an essential with any telephone, but you still have
to pay the carrier $7 to $9 per month per line. If you use the popular call
return feature (*69), you can pay around $1.00 to $1.50 for each use.
You can reduce the total cost of call features by setting up a bundled plan with
the carrier. However, you do not have to add any call features to any line; they
are truly options like a moon roof or climate control in an automobile.
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VoIP comes with the usual call features that you have to either bundle with
your traditional lines or pay à la carte per line as you use these features. But
with VoIP, you don’t need to worry about the cost of call features; they are all
included at no extra cost.
Most companies use an internal telephone system, which can usually provide
most if not all call features. However, with POTS and Centrex line models
(see Chapter 2 and the next section), call feature costs are highly relevant
to the company’s monthly telephony bill. If your company has hundreds
or thousands of lines, the overall cost for all features for all lines can be
astronomical.
The Final Four Meet VoIP
To reduce the recurring charges for POTS telephony services, a company
with fifteen or more employees, who each need a telephone, can acquire its
own telephone system. Over the years, several conventional systems have
emerged. All use POTS, but each one reduces the dependence on POTS lines
and POTS line equivalencies. Also, they all provide traditional features
(voice mail, conference calling, call transfer, and so on) at no extra cost.
As a result, companies seeking to use conventional POTS services generally
use one of the four non-VoIP telephony systems models. Larger companies
may use one or more of these models, depending on the number of employees at each location. These models, which I call the final four, were introduced in Chapter 2.
Table 11-1 provides an overview of the final four, and the following sections
describe each model in more detail.
Table 11-1
The Final Four
Model
Equipment
Location
Cost Structure
Comments
POTS
Carrier lines run
to companyowned phones.
Monthly recurring
charges (MRC)
per line, per phone.
Regulatory fees
apply to access
line costs.
Call features are paid per
month, per feature. Relatively
high costs on a per employee
basis. Not well suited for VoIP
conversion unless toll charge
savings justify conversion costs.
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Model
Equipment
Location
Cost Structure
Comments
Centrex
POTS-equivalent
carrier lines run
to customer’s
telephone on a
per phone basis.
Higher POTSequivalent line
charges, and
monthly recurring
charges per line.
Regulatory fees
apply to access
costs.
Little or no maintenance costs.
Higher priced lines compared
to POTS. Suitable for VoIP if
company has substantial MRCs
for either regional, intrastate,
interstate, or international toll
line carrier services.
KTS
POTS carrier
lines run to the
company’s KTS
switch.
Monthly recurring
charges per line.
Higher startup
costs for KTS and
phones. Regulatory fees apply to
access lines.
Most features included at no
extra cost (savings due to one
POTS line for every six to eight
phones). Suitable for VoIP if
company has substantial MRCs
for either regional, intrastate,
interstate, or international toll
carrier services (see Chapter 3).
PBX
Dedicated carrier transport
lines to PBX.
Bandwidth can
be channelized
to support VoIP
migration.
Dedicated access
lines. Highest
monthly recurring
charges. Bandwidth
can be used for
data, voice, and
video. Can be used
along with station
phones in a VoIP
network. Regulatory fees apply to
access lines.
Call features available free.
Call center capabilities. Higher
monthly maintenance charges
but reduced aggregate line
costs. Avoids need for forklift
upgrade because PBX can be
integrated with VoIP. Highly
suitable for VoIP because company carrier costs for regional,
intrastate, interstate, or international tolls are reduced.
Goodbye POTS, hello VoIP
Does your company have fewer than fifteen phone stations or fax machines?
Is it not bothered by high toll charges and requires no significant international services? If so, your company can stay with the POTS model. With
POTS, the company does not even need to consider a different system of
managing their telephony services; everything depends on the carrier.
Figure 11-1 illustrates the traditional POTS model.
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The company would work out an acceptable service plan with their carrier.
They would need to have or acquire POTS-type telephones for each user. In
the plan, the company should minimize what the per-minute usage rates are
going to be for all regulated services categories. In addition, the company
would establish what add-on charges are acceptable in the way of call features on one or more of the lines.
Because all employees will probably have voice mail, the company can cut
some costs by getting voice mail for only a subset of the total number of lines
to be leased. Voice mail usually comes with the ability to set up five or so
mail boxes per line at no additional cost. If you get voice mail on the main
number, you can set up a “hunt group” that rolls to the next line when the
receptionist is unavailable, or you can have the caller leave a voice mail to
any employee by leaving directions on the voice mail narrative (for example,
“press 1 for Ms. Smith, press 2 for Mr. Williams”). Other call features can be
added on the lines that need them.
PSTN
POTS
lines
Figure 11-1:
The POTS
model of
telephony
service.
Telephone
Telephone
Telephone
Telephone
Telephone
Telephone
The bottom line with POTS is that each employee has a traditional phone.
Some have more than one line to support a fax or dial-up modem services.
The company gets the bill each month for all these lines, their respective
service charges, and all add-on charges.
If your company has a computer network, you owe it to your financial health
to at least take a look at VoIP. To get a total picture of what it is costing you or
your company, divide your total monthly carrier services bill by the number
of lines you are leasing for each employee. To isolate the total costs by line,
usage, and cost per add-on item (taxes, add-on features, regulatory fees, and
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so on), create a spreadsheet in which each employee’s line requirements
reflect the monthly costs for that employee. Run the items per employee
line horizontally across your spreadsheet. When you have gone through all
of the billings, total the fields by column for each item. This gives you the
total monthly cost breakdown for the lines and items you are tracking.
Figure 11-2:
Tracking
the costs of
POTS lines
and add-on
features.
$24
$35
$11
$30
$13
$63
$67
$59
$62
$52
$52
$52
$66
$45
$45
$45
$45
$45
$698
$0
$4
$0
$4
$0
$0
$0
$4
$3
$3
$3
$3
$3
$3
$3
$3
$7
$7
$7
$7
$0
$0
$0
$7
$45
$45
$45
$45
$45
$45
$45
$45
$45
$45
$45
$45
$45
$585
6200
6201
6202
6203
6204
6205
6206
6207
6208
6209
6210
6211
6212
Main number
President
Secretary
Senior account rep (a)
Account rep (b)
Account rep (c)
Account rep (d)
Customer service rep
Main fax
Modem (a)
Secretary fax
Modem (b)
Modem (c)
TOTAL
Line
Line
MRC
Voice
mail
Call
forwarding
Conference
call
Caller
ID
$4
$4
$4
$4
$4
$4
$4
$4
Call
trace
$4
$4
$0
$0
$0
$0
$0
$4
Total
An example makes this easier to see. I’ll show the costs for a small company
with seven employees. The costs of their POTS lines and additional features
is shown in Figure 11-2. Regulatory fees are outlined in Figure 11-3, and local
and toll costs are shown in Figure 11-4. Their total MRC is $1644.
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Figure 11-3:
Tracking the
costs of regulatory fees.
Figure 11-4:
Tracking the
costs of
local and
toll calls.
Main number
President
Secretary
Senior account rep (a)
Account rep (b)
Account rep (c)
Account rep (d)
Customer service rep
Main fax
Modem (a)
Secretary Fax
Modem (b)
Modem (c)
TOTAL
Main number
President
Secretary
Senior account rep (a)
Account rep (b)
Account rep (c)
Account rep (d)
Customer service rep
Main fax
Modem (a)
Secretary fax
Modem (b)
Modem (c)
TOTAL
Line
Surcharges
6200
$15
6201
$16
6202
$14
6203
$15
6204
$13
6205
$13
6206
$13
6207
$16
6208
$11
6209
$11
6210
$11
6211
$11
6212
$11
$171
Line
6200
6201
6202
6203
6204
6205
6206
6207
6208
6209
6210
6211
6212
Local
$3
$11
$13
$8
$8
$8
$8
$22
$37
$5
$21
$4
$8
$156
Fees
$5
$6
$5
$5
$4
$4
$4
$6
$4
$4
$4
$4
$4
$59
Intralata
$0
$39
$4
$32
$36
$34
$42
$65
$76
$0
$45
$0
$0
$373
Taxes
$6
$6
$6
$6
$5
$5
$5
$6
$4
$4
$4
$4
$4
$66
Instate
$0
$3
$0
$1
$12
$11
$15
$21
$18
$0
$7
$0
$0
$88
Total
$27
$28
$25
$26
$22
$22
$22
$28
$19
$19
$19
$19
$19
$296
Interstate
$0
$7
$0
$3
$4
$6
$4
$6
$2
$0
$2
$0
$0
$34
Int'l
Total
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$3
$60
$17
$44
$60
$59
$69
$114
$133
$5
$75
$4
$8
$651
Goodbye Centrex, hello VoIP-Centrex
The Centrex (Central Exchange) services model is owned and operated by
the carrier. Centrex is physically the same as POTS; the line between the
carrier company and your premise telephone service is the same. What is
different is how and where the line terminates at the carrier end.
The lines run from the carrier’s switching equipment to each customer’s telephone. Figure 11-5 illustrates this model.
The number of lines needed for Centrex is almost secondary to the fact that
the customer can terminate service at any time without penalty. Before VoIP,
Centrex was a great solution for startups or companies unsure of their strategic
plans because they could gain all the usual features along with POTS-equivalent
telephony service quickly under a month-to-month plan. When the company’s
plans become concrete, they could terminate Centrex and convert to a new
telephony system.
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Carrier owned
PSTN
PBX
POTS
lines
Figure 11-5:
The Centrex
model of
telephony
service.
Telephone
Telephone
Telephone
Telephone
Telephone
Telephone
Carrier PBX provides Centrex
Centrex costs more per month and per line, when compared to POTS, but can
include many calling features without additional charges. Centrex can deliver
services to the customer’s telephone that are otherwise available only to
users connected to more expensive high-end telephone systems.
VoIP can reduce or eliminate the need for POTS lines used for Centrex. It also
provides calling features at no cost, so it can be good to switch from Centrex.
VoIP gives you all the benefits of Centrex (and more) without the high costs.
If you have a computer network and you like the idea of Centrex, consider
VoIP Centrex. The process is practically the same as the traditional form of
Centrex, except your company’s voice signals travel over your computer network in packets on their way to your VoIP provider; the provider, in turn, sends
them on to their destination.
To get a total picture of what Centrex is costing you or your company, divide
your total monthly carrier services bill by the number of Centrex lines you
are leasing. To isolate the total costs or costs by line item, you can follow the
same procedure covered in the preceding section. Because the cost per line
under Centrex is more than it is under POTS, you’ll find that the regulatory
fees you pay are higher also.
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Goodbye KTS, hello VoIP
The third model is called a key telephone system (KTS). The KTS reduces a
company’s total number of phone lines. In fact, for every six to eight employees, on average, the company leases only one POTS line. That means a company with sixty employees needs a mere eight to ten POTS lines. The KTS
provides many traditional call features at no extra cost. Reduction in lines
means cost reduction across the board.
The KTS is owned and operated by the customer. You use the same physical
lines, with the same associated costs, as POTS or Centrex. The difference is
where the line terminates at your end. The lines run from the carrier to your
KTS. You then use your own inside wiring to connect your telephones to the
KTS. A disadvantage of KTS is that the customer is responsible for all maintenance (including the inside wiring), for configuring the KTS, and for programming call features for each telephone.
Figure 11-6 illustrates how the KTS model works. With some KTS systems,
you may need to acquire compatible digital telephones; you can’t just plug
in any old analog phone. As a result, much of the cost of a KTS depends on
the number of phones your company needs.
KTS was a good solution for smaller companies requiring more than fifteen
lines. Now, however, KTS users can benefit by switching to VoIP because it
gets rid of most if not all lines and uses the computer network for on-net voice
traffic. If all of your company’s locations are on-net, you not only reduce the
number of lines required but also eliminate toll charges. And, in most companies, toll charges are the largest monthly telephony expense.
PSTN
POTS
lines
Customer owned
Figure 11-6:
The KTS
model of
telephony
service.
KTS
Inside wiring
Digital phones
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Goodbye PBX, hello VoIP-PBX
The fourth and final model of the final four is PBX, which stands for private
branch exchange. Before VoIP, PBX was the mainframe of corporate telephony.
KTS is a small version of PBX.
The most expensive of the four non-VoIP models, PBXs deliver the most
value:
PBX can use dedicated high-bandwidth lines out to the carrier or to
other locations on the company’s network.
Interfaces can be used on PBX to provide full-motion videoconferencing.
PBX has extensive call-management capabilities and the capacity for setting up and controlling multiple call centers.
PBX can usually be upgraded to operate with VoIP. As a result, you
can save money because you do not have to get rid of your PBX to
go to VoIP.
As with KTS, companies using PBX can reduce the total number of POTS lines
required by a factor of one line for every six to eight employees. But unlike
KTS, PBX has the capacity for unlimited expansion. The largest workable KTS
is limited to about sixty POTS lines; with PBX, you can have thousands of lines.
Figure 11-7 illustrates the PBX model.
The PBX system’s circuitry integrates multiple users over fewer lines at a
single location and can also connect to all other locations.
DS
PSTN
Dedicated
transport lines
POTS
lines
Customer owned
Figure 11-7:
The PBX
model of
telephony
service.
PBX
Inside wiring
Digital
phones
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If your company has multiple locations, with each site having its own PBX,
you can connect them all using a separate network, but the cost of maintaining a separate network is huge. If you have a great deal of recurring charges,
the multilocation design for connecting all your PBXs can save your company
big time. The recurring costs have to be leveraged against the costs of an
entirely separate network. (VoIP runs over your computer network and does
not require a separate PBX network.)
The PBX model provides great savings when compared to the other models,
but it doesn’t give you anything close to the savings attainable through VoIP.
VoIP all but eliminates services charges for all on-net calls. VoIP reduces carrier services charges significantly for calls that travel off-net. For many large
multilocation companies, these charges alone amount to millions of dollars
per month.
Unified Networks
The new term for combining a company’s telephony and data networks is
convergence. A converged network is formed when all your data — including
VoIP — travels over a single infrastructure. Another popular term for this is
integrated networking. Integrated networks incorporate the use of computer
data, telephony signals, and video signals onto the same network.
VoIP networking is about unifying the people that work for the company. VoIP,
among many other attributes, is a unifier.
VoIP is not just about reduction of lines and carrier services charges, although
these can be significant. It also adds features and functions that the company
never dreamed of. As a result, VoIP enhances productivity. Use of the unified
network increases productivity for the company and its customers. The following are two examples among many that could be provided.
Larry’s story
Larry is a Human Resources Specialist who works for a kitchenware manufacturer. His office is located at the company’s headquarters in southwestern
Pennsylvania. Larry frequently travels among the company’s twenty-three
locations, which include plants and sales offices spread out across the
Midwest and West coast. He routinely conducts interviews with new employee
candidates.
Larry’s company used to pay enormous toll charges, but VoIP eliminated a
whopping 92% of the company’s toll charges.
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Every time Larry traveled to a different company location, the IT staff would
set him up with a computer network connection and a telephone. Now that
his company has switched to VoIP, Larry merely has to plug in his computer,
which runs IP soft phone, at any available port. He doesn’t need to have
anyone from IT make special configuration changes for him. He can even use
IP soft phone to reroute his extension to any phone in the office.
Moreover, with his new IP soft phone, Larry can make use of videoconferencing from his laptop computer. He no longer needs to travel to other sites to
conduct screening interviews. The candidates report to the company location
nearest them, and the sponsoring location allows the interview candidate
to use one of their VoIP phones that run videoconferencing. Through VoIP,
Larry’s company saves in both toll charges and travel costs.
Joann’s story
Saving on travel and maintenance costs are only part of the picture. VoIP
truly enhances productivity, delivering feature-rich applications that let
you do your work and still have a life.
Consider Joann, who works for one of the top health insurance providers
headquartered in the Northeast. Her company has seventeen locations
connected over a VoIP network. Throughout a typical day, Joann uses a
VoIP-enabled telephone to receive announcements, make phone calls, and
send and receive e-mail.
Joann starts her day by checking her IP telephone’s Web page for announcements. One morning, she read that her friend and coworker Rae Lynn had a
baby boy the night before. She made a note to send Rae Lynn’s family a card.
As part of her job, Joann reviews healthcare claims that do not fit the normal
criteria for a final decision by the utilization review (UR) department. Much
of Joann’s communications relate to the status of the claims she is investigating. She regularly communicates with people located at her home office and
other sites. Joann also interacts with staff from her company’s huge healthcare provider network to determine the details of each claim she receives for
disposition.
With the exception of any calls made in the local calling area, all Joann’s telephone calls are carried on the corporate VoIP network. When the call is to a
provider located off-net near one of the company’s other locations, the call
travels from Joann’s VoIP telephone over the corporate VoIP network to the
distant site’s location, where it goes over the company’s LAN at that location,
out the gateway, and into the local calling area. As a result, for all Joann’s
telephone calling, her resulting monthly off-net charges are minimal.
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All the claims Joann’s company receives are transmitted to their UR department through the Web. If a claim cannot be approved for payment upon receipt,
the UR department forwards it electronically on the corporate VoIP network
to Joann, with a copy to the medical director of the respective source location and a copy to the headquarters’ medical director.
Joann works frequently with the medical director at the headquarters’ location because of the technical nature of many of the claims. On average, Joann
calls this medical director seven to ten times per day on claim-related matters.
Therefore, she includes this medical director in her VoIP telephone buddy
group and makes full use of the presence feature indicator on her VoIP telephone. If the presence indicator is lit, she knows not to waste her time calling
the medical director because he is on the telephone with someone else. Joann
also has a presence indicator set up for people she works closely with.
Much of Joann’s day is spent on her VoIP telephone. She uses it to process
inbound or outbound e-mail from the company’s various locations. Sometimes
the content of a claim requires Joann to contact other personnel in the company. When she needs to do this, Joann accesses her browser-based directory
to retrieve the person’s contact information and automatically dials the VoIP
telephone number with one click. Or if Joann is on the road, she can simply
speak the name of anyone in the directory, and the VoIP speech-access application dials automatically.
Needless to say, Joann is a busy woman. About thirty minutes before her
workday ends, she checks the weather advisory corner of the Web page
on her VoIP telephone. She wants to know whether she needs to bring her
umbrella when she heads over to the subway station. She checks her voice
mail and typically opts to have the remaining unheard messages printed so
she can read them on the ride home.
Convincing Your Boss
Part of gaining the support for the move to VoIP convergence is to convince
the company that it is the right move. You generally need sign-off by the
people who manage the company’s technology and, to a certain extent, the
staff that reports to these managers. But you know and I know that by and
large getting approval comes down to convincing upper management.
The best way to appeal to upper management is to focus on the costeffectiveness of convergence. Map out your current expenses and contrast
those numbers with the expense of VoIP convergence. The numbers speak
for themselves: VoIP convergence reduces operating expenses enough to pay
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for itself in the near term, and it can save the company a whole lot of money
going forward. (For examples of how other companies have accomplished it,
see Chapters 12 through 14.)
Another benefit that can speak to upper-level managers is that implementing
a unified, integrated network brings the company together, and makes all
employees reachable on a higher, horizontal plane of communication. It
promotes collaboration, enhances productivity, and ultimately leads to an
increase in revenue.
Last, you need to provide your management with a seamless plan for transitioning to the new system, as discussed in the following section.
A seamless transition
The good news is that introducing VoIP onto your computer network can be
performed while keeping your conventional POTS/PSTN telephony systems
operational. Because the two are physically separate networks, they can
operate simultaneously.
If you work with a carrier company that supports VoIP-based telephony,
and a hardware vendor that provides hardware to support both types of
networks, you can enjoy your conversion to VoIP while still having the
safety net provided by the older system.
Providers typically offer reduced costs to keep the old systems running while
you install the new VoIP-based systems. When you are comfortable with your
new converged and integrated network, you can plan for the removal of the
old telephony systems and the termination of any non-used carrier services.
If your company has made a significant investment in telephony systems that
were not IP-ready in the last few years and those systems are capable of being
upgraded to handle IP telephony, your company can now plan the move to
VoIP while still protecting the company’s investment in older systems. This
is another less costly way to reap the full benefits of your original systems
while positioning your company for the eventual full conversion to VoIP.
Whatever VoIP conversion option your company may choose, you will be
running a single network that integrates computer data with voice. (Video
conferencing can be added too.) The requirements for managing the company’s network become more unified versus divided. A single comprehensive
network management system can be used to monitor and control everything
traveling over the network. Fault-isolation can be more readily implemented
because you don’t need to troubleshoot what network the problem may be on.
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Because your company will unify its support staff into one department, the
ensuing cross-training and convergence experience gained by all in this department can result in a reduction of the company’s dependence on outside experts.
In the short-term, your company may need to use outside contractors while
using existing providers. In this way, needs are optimally supported until the
conversion is at or near completion.
Meeting your future with VoIP
In a competitive marketplace, companies that are forward-thinking look at
their competitors. Market projections based on a mere percentage of the
total telephony marketplace indicate that the VoIP telephony market could
grow to as much as $15 billion a year by 2008.
This trend means one or more of your competitors are making the move to
VoIP and enjoying the benefits. It also means that your company will be at a
disadvantage if it doesn’t undertake a strategic plan to convert. As collaborative
companies with a unified workforce satisfy their customers in unprecedented
ways, they are going to increase their respective market share. Your company
may not be able to afford to ignore VoIP technologies much longer.
Bandwidth on demand
Besides the movement of the market, including your competitors, toward VoIP,
you need to evaluate a few significant technical benefits. First, VoIP networks
support the kinds of transport services that run packetized services not only
for computer data, but also telephony voice and video where needed. These
transports are usually dedicated lines of substantial bandwidth capacity.
As discussed in Chapter 7, bandwidth is normally channelizable, which means
that the bandwidth of the line can be divided into channels. The channels
can be used dynamically (whenever they are needed for a specific application
that is seeking to run on them at any point in time). When channels are not
needed, they go back into a pool of channels for other applications, including
data, voice, and video needs. This type of operation is often referred to as
bandwidth on demand.
To achieve this type of bandwidth usage, the network architecture uses terminating equipment called level three switches. Providers that supply the
transports usually include or specify exactly what model of switch fits the
bill. Bandwidth on demand is a function of network design that works very
well with VoIP.
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Scalability, as needed
Scalability refers to the degree to which your company can make changes to
support growth and increase access to and use of the network. On the data
side of the network, Ethernet is highly scalable. New users, IP telephones,
computers, and other devices can be connected to the network on a plugand-play basis.
When an employee needs to move to a new location in the building, for example, his or her IP telephone and computer can be unplugged and taken to the
new location, where they are plugged back in. Both devices relearn automatically on startup the identity of the employee, so the devices are operational
immediately. Consider the benefit of this capability: No one needs to go to the
telecommunications closet and reprogram port numbers or change network
addressing information.
VoIP protocols bring a certain degree of intelligence to the enterprise network that makes change a pleasure and a joy rather than a frustrating and
time-consuming hassle.
Costs to move, add, and change
As a result of the high degree of scalability and the intuitive intelligence of
VoIP networks, move, add, and change (MAC) costs are a thing of the past. In
companies that still operate under one or more of the traditional telephony
models, expensive MAC costs are incurred whenever an employee moves,
they need to add new users, or they need to make changes in a user’s telephony profile.
In traditional telephony models, one of the major annual expenses is the
maintenance of the telephone system. MAC costs are the single most expensive item on this budget line. In traditional networks, MAC costs average from
17 to 31 percent of the entire maintenance budget. Under a VoIP model, you
have no need for a MAC cost item in your budget.
Older telephony system technicians that complete these MAC changes bill at
$150 per hour. Imagine if the company had to make a major set of moves or
changes. For example, if a company needs to move a department from the
fifth floor to the twelfth floor, traditional MAC costs can run an average of $90
per employee. When new inside wiring is required or the telephony system
needs to be reprogrammed, the costs are even higher. Under VoIP, everyone
unplugs on the fifth floor, goes to their newly assigned space on the twelfth
floor, and plugs back in — no outside intervention is needed! Under VoIP,
MAC changes go away. Again, more cost savings and time savings to justify
your move to VoIP.
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Chapter 12
Locations Galore
In This Chapter
Considering VoIP over multiple locations
Evaluating your current networks
Creating a plan
Implementing the plan
Reviewing the plan’s success
Savings and the bottom line
B
usinesses with multiple locations are prime candidates for benefiting
from VoIP, but they also face challenges that never beset consumers or
single-location companies. If you are running a business with multiple locations, this chapter is for you. Here you find guidance and examples of how
you can implement VoIP with a minimum of hassle.
Challenges of Multiple Locations
Companies that have worked with and mastered traditional networks (either
telephony or data) often think that it’s just a small step to implement VoIP.
Think again! If your business has multiple locations, don’t even consider
implementing VoIP on your own. You’ll want to work with a qualified VoIP
partner. Working with a partner well-versed in VoIP can help save you money,
and the money you save from the conversion more than pays for the partner’s
services. Your company can then gain the skills to gradually become experts
in VoIP the same way they did with the KTS or PBX telephony systems — a
little bit at a time.
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Many people, without realizing it, develop a POTS mentality, thinking of communications problems in terms of old line-based solutions. To adapt to the
VoIP model, you need to shed this old-style mentality and look for ways you
can effectively converge your data and telecommunications networks.
If you can see that the POTS side of what your company needs is the “small
potatoes” part of a VoIP project, congratulations! Your challenge now is to
recognize that you don’t start any project — including VoIP — by focusing on
the small potatoes. It’s much more important to figure out how you integrate
VoIP into your multilocation computer network.
When you move to VoIP, you are putting your telephony systems onto your
computer network. With all the new features VoIP brings to the table, it seems
like you’re multiplying your telephony applications exponentially, similar to
how computer applications seem to multiply on your data network. (I won’t
ask how many computer apps you have because I know it’s numerous and
grows and churns every week.)
Don’t try to apply a traditional telephony design model to the implementation
of VoIP. The companies that do this end up failing or not doing as well as they
could have. You need to adapt the traditional telephony models when you go
to VoIP.
Evaluating Your Existing Networks
If the VoIP partner you select can’t do a thorough analysis of your existing
networks, including all monthly billings, you need to make an executive decision and select a partner that knows how to do it. The result of the network
evaluation should be a complete spreadsheet that lists each company location
and all one-time and recurring charges that your company is paying.
It’s amazing how many companies don’t have a clue about what they are
paying. In their defense, evaluating the costs can be complicated if the company has multiple carriers and a plethora of calling services and in-house
telephony systems. I’ve had clients who had multiple PBXs, with a Centrex
line for every employee in the company — even though the value of Centrex
is that it eliminates the need for the company to go to the expense of having
its own in-house telephone systems such as PBX.
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When you do your analysis, start with your monthly billings. The billings
paint the picture of your costs.
To illustrate what I mean, consider the case of a medical practice I helped
convert to VoIP. Bremer Healthcare (a fictitious name) has eleven sites in
southwestern Pennsylvania and lots of local and intralata traffic. Each site
has its own LAN. The WAN setup to connect them all was far from perfect.
They initially called me to help them connect to their health insurance companies over the Web.
Bremer was told that they needed to start submitting their billing claims
over the Web within six months, or they could lose a good part of their
business. This led to completely reevaluating their entire telephony and
computer network infrastructure. They didn’t even have a dedicated connection to the Internet — they were running slow dial-up connections into
a popular ISP.
Figure 12-1 shows the results of my initial cost analysis of their telephony and
computer network systems.
No doubt you were hit with some shock and awe when you saw the huge and
unnecessary charges for Bremer’s intralata services. The number of POTS
lines they used was also unnecessarily large. The results of the cost analysis
and the fact that they have multiple locations made them primary candidates
for VoIP.
Bremer Healthcare started their medical offices in outlying suburban areas.
Because the sites were spread out across all regional toll areas, they were
getting clobbered on charges, paying anywhere from $.10 to $.42 per minute.
They paid their phone bills each month as a necessary cost of their business,
not knowing that they could save huge amounts of money.
Bremer’s costs didn’t end with their traditional telephony charges; they
also paid large fees for dedicated carrier services. The shame of the situation was that although Bremer had a dedicated computer data network,
the only application running was e-mail. Four of the locations could not
even connect to the e-mail server at the main site. They had no high-speed
Internet access. Figure 12-2 shows the cost analysis for their dedicated
services.
175
Figure 12-1:
Telephony
service cost
analysis.
Local
calling area
Pittsburgh
Pittsburgh
South Hills
Washington
Washington
Moon
South Hills
Pittsburgh
North
North
North
Voice FAX Modem Total
MRC
lines lines
lines
lines access
27
2
14
43 $3,139
3
1
1
5
$325
4
1
1
6
$390
4
1
1
6
$390
4
1
1
6
$390
4
1
1
6
$390
4
1
1
6
$390
4
1
1
6
$390
3
1
1
5
$325
3
1
1
5
$325
3
1
1
5
$325
63
12
24
99 $6,435
Local
$5,134
$712
$685
$918
$548
$429
$756
$682
$721
$537
$759
$11,881
IntraIntra- InterMonthly
LATA
state state Int'l usage
$21,664
$58
$21
$0 $26,877
$4,793
$0
$0
$0
$5,505
$4,065
$0
$0
$0
$4,750
$4,781
$0
$0
$0
$5,699
$5,664
$0
$0
$0
$6,212
$2,465
$0
$0
$0
$2,894
$1,132
$0
$0
$0
$1,888
$2,832
$0
$0
$0
$3,514
$10,093
$11
$0
$0 $10,825
$9,114
$16
$0
$0
$9,667
$11,328
$10
$0
$0 $12,097
$77,931
$143
$21
$0 $89,976
MRC
total
Annual
$30,016
$360,192
$5,830
$69,960
$5,140
$61,680
$6,089
$73,068
$6,602
$79,224
$3,284
$39,408
$2,278
$27,336
$3,904
$46,848
$11,150
$133,800
$9,992
$119,904
$12,422
$149,064
$96,411 $1,156,932
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Location
Main - Carnegie
Brentwood
Bethel Park
Canonsburg
McMurray
Robinson
Upper Saint Clair
Mount Lebanon
Cranberry
AlleghenyValley
Wexford
TOTAL
176
Existing circuit-switched costs
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Existing packet-switched costs
Figure 12-2:
Dedicated
services
cost
analysis.
Location
Main - Carnegie
Brentwood
Bethel Park
Canonsburg
McMurray
Robinson
Upper Saint Clair
Mount Lebanon
Cranberry
AlleghenyValley
Wexford
TOTAL
Local
calling area
Pittsburgh
Pittsburgh
South Hills
Washington
Washington
Moon
South Hills
Pittsburgh
North
North
North
T1
lines
2
1
1
1
1
1
1
1
1
1
1
12
MRC
access
$982
$519
$575
$725
$675
$575
$675
$525
$505
$522
$958
$7,236
Annual
$11,784
$6,228
$6,900
$8,700
$8,100
$6,900
$8,100
$6,300
$6,060
$6,264
$11,496
$86,832
Bremer Healthcare was told by their carrier that because of the way their
frame-relay network had to be designed, two T1 lines were needed at the
main location. This proved to be false. I used one of the two T1 lines to give
the new VoIP network a dedicated Internet gateway and recommended that
they drop the other one as an unnecessary expense.
Developing a Plan
Because Bremer Healthcare’s existing telephone system was centered on the
circuit-switched network and their existing dedicated network was not used
for any critical applications, there was room to install VoIP without bringing
down their day-to-day business functions. The analysis of their existing telephone and computer network infrastructure made it obvious that a huband-spoke design using VoIP would resolve most if not all of their problems.
Designing a VoIP solution
The VoIP plan for Bremer Healthcare required more use of dedicated lines,
which they ironically had in place and were already paying for. Greater
usage of the dedicated transports reduced the total number of POTS lines
needed. The plan called for the use of a PSTN gateway at each site, providing
connectivity to the PSTN. The PRI 23-channel transport line at each site was
used to anchor each LAN to the PSTN gateway. This action consolidated offnet local calls through the PSTN and substantially reduced their need for
POTS lines.
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Using the PSTN gateway with PRI lines ensured that Bremer would be able
to maintain connectivity to the PSTN as they reduced their dependence
on POTS lines. Essentially, one PRI at $325 per month equals twenty-three
POTS lines. They were paying $65 per month per POTS line. If you do the
math, not counting their horrific intralata usage costs and local calling
usage, they were paying $6435 per month just for the POTS lines. The cost
for eleven PRIs, one per site, cost them only $3600 monthly (11 x $325).
It’s a no-brainer!
The plan provided on-net telephony calling, which eliminated their horrendous intralata calling charges. It provided a dedicated Internet gateway, a
state-of-the-art firewall, and an intranet at the main site. All the other LANs
have access to this intranet as well as the Internet through the LAN at the
main location. Even with the increased functionality, Bremer’s overall
monthly operating expenses were substantially reduced.
The new VoIP network integrated telephony systems and computer data
systems onto the same infrastructure. As a result, the company raised
their capabilities to a never-before-seen level, all while lowering their
overall costs.
Putting your plan into action
To implement the VoIP plan, Bremer Healthcare needed six essential
components:
Ethernet network interface card (NIC)
VoIP gateway
VoIP server
VoIP-compatible switches
VoIP voice mail
Internet firewall
The first component was an Ethernet network interface card in each telephone system (PBX). With their existing telephony systems connected to the
Ethernet, they could make use of all their existing digital telephone stations.
This does not in itself provide each user with all the new and exciting features
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available through VoIP, but it maintains the level of telephony services they
had before VoIP, at far less expense to the company. It also sets the stage for
adding VoIP-enabled telephones.
The second component was a VoIP gateway for each of the LANs in the
company. The main site would receive a high-level VoIP gateway because it
needed to terminate multiple T1 lines and support other enterprisewide functions, such as the Internet gateway for all the LANs. All the other LANs would
receive a much less expensive version of this VoIP gateway. The VoIP gateway
devices would provide the main interface between each LAN and the newly
redesigned WAN.
The third component was a properly configured VoIP server at each site. Highcapability servers were chosen with maximized clock speed, lots of memory,
and more hard-disk capacity than the average server. This allowed the VoIP
servers to back each other up in case one should go down. Should a problem
develop, the network could be used to swap in a new server and download
the complete VoIP image configuration from one of the remaining servers.
The fourth component was to replace all LAN switches running at each of the
locations with VoIP-compatible switches. This component did not need to be
implemented immediately, but eventually they would want VoIP telephones;
adding the switch upfront was easy because we would need to bring the LANs
down for a period of time anyway. So, it made sense to implement this component upfront, particularly because the VoIP cost savings were so dramatic.
The fifth component pertained to storing voice mail. Management installed a
new voice mail server, but did not enable it throughout the company during
the first year. Instead, they continued to use voice mail primarily on the old
telephone systems. However, Bremer also started testing and implementing
new VoIP phones. As a result, five VoIP-enabled phones were requested for
managers at the main site and three at each of the other LAN sites. These
phones were to use the new VoIP mail server for voice mail.
Finally, the sixth component was the placement of the Internet firewall at
Bremer’s main site. It became the main ingredient in support of security on
their newly defined intranet and their gateway to the Internet. All employees
from all the other LANs could use the intranet for Internet-related applications (browsing, e-mail, chat, and so on). Those fortunate few who received
VoIP phones were even able to set the Web browser function on their phone’s
screen (see Chapter 10).
179
Figure 12-3:
Startup
costs for
Bremer.
Upgrade
existing
PBX/KTS
$7,000
$2,475
$3,140
$2,817
$3,224
$3,100
$3,640
$2,890
$3,245
$3,000
$3,450
$37,981
VoIP
partner
consulting
$98,226
$9,044
$9,458
$9,281
$9,572
$9,575
$10,155
$9,325
$9,685
$9,496
$9,784
$193,601
VoIP
VoIP
VoIP
Voice mail
servers gateways switches
server
$25,750
$47,000
$34,000
$21,000
$14,000
$16,000
$9,000
$0
$14,000
$16,000
$9,000
$0
$14,000
$16,000
$9,000
$0
$14,000
$16,000
$9,000
$0
$14,000
$16,000
$9,000
$0
$14,000
$16,000
$9,000
$0
$14,000
$16,000
$9,000
$0
$14,000
$16,000
$9,000
$0
$14,000
$16,000
$9,000
$0
$14,000
$16,000
$9,000
$0
$165,750 $207,000 $124,000
$21,000
Internet
VoIP
gateway
phones
firewall
$2,400
$31,000
$800
$0
$800
$0
$800
$0
$800
$0
$800
$0
$800
$0
$800
$0
$800
$0
$800
$0
$800
$0
$10,400
$31,000
Total
$266,376
$51,319
$52,398
$51,898
$52,596
$52,475
$53,595
$52,015
$52,730
$52,296
$53,034
$790,732
7:28 PM
Local
Location
calling area
Main - Carnegie Pittsbugrh
Brentwood
Pittsburgh
Bethel Park
South Hills
Canonsburg
Washington
McMurray
Washington
Robinson
Moon
Upper Saint Clair South Hills
Mount Lebanon
Pittsburgh
Cranberry
North
AlleghenyValley
North
Wexford
North
TOTAL
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VoIP startup costs
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Obviously, these six components have costs associated with them, but many
of these costs are one-time startup costs. Figure 12-3 shows the details of
Bremer Healthcare’s VoIP startup costs, taking into account the six components they needed.
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Staging the Implementation
When implementing a VoIP system, the major consideration is network
downtime. Whenever it is necessary to swap out major components such
as switches and servers, taking the network down is a consideration.
In the case of Bremer Healthcare, downtime wasn’t a big concern because they
chose to maintain their existing POTS-based telephony systems. Their data
network did not currently support any of the company’s strategic objectives.
This provided the flexibility to move all components in without a corresponding problem of having to take either the telephony systems or the computer
network systems down for long periods of time.
In Bremer’s case, installation was scheduled for weekends, with one weekend
per location. The first task was to install the VoIP server and the Internet firewall at the main site, and then install the components site-by-site using Internet
connectivity as a test of success. The full testing of the VoIP system would be
performed as each site came up and then again after all sites were up.
Plug-and-play
Ethernet LANs provide a plug-and-play environment. This means you can
often plug devices into the network, and they learn what other devices are
connected and how to work with them. Plug-and-play makes it easy to add
devices (including VoIP devices) to the network. However, not all devices or
applications are as easy to add; some require quite a bit more work to place
on your LAN.
For example, if you were to install a Network Management System (NMS),
you would have to set parameters and configure it to run the way you want
it to run. Bremer Healthcare did not use a separate NMS, choosing instead
to incorporate NMS functions into the firewall installed at the main site.
The implementation of VoIP at Bremer required the installation of many new
Ethernet devices. For instance, at each Bremer site, we swapped out the older
non-VoIP switches with plug-and-play VoIP switches. We installed PSTN gateways, connecting each to the PRI line installed by the local carrier. All that
was necessary was to plug the line into the proper port on the gateway and
then program the settings. Lastly, the gateways used to terminate each LAN’s
T1 connection were installed to enable connectivity to the other Bremer locations. Installing the gateways wasn’t quite as easy as plug-and-play because
each required some configuration to properly recognize the network and the
T1 line and to enable security settings.
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Managing downtime
In any VoIP conversion, there is downtime, and the best way to manage it is
to anticipate when it could happen and then plan for it. Unfortunately, downtime always seems to be the result of factors you can’t control.
The major downtime with Bremer Healthcare’s conversion was coordinating
with the local exchange carrier to switch over the T1 lines. The carrier was
apparently not happy with the new design that Bremer planned. As part of
the conversion plan, Bremer had provided the carrier with a spreadsheet of
scheduled dates, times, and locations for the changes to the dedicated T1 lines.
Basically, the conversion called for keeping the existing T1 lines but changing
them from a frame-relay configuration to a dedicated, private T1 service.
Coordinating this change was the biggest headache in the conversion. Only
two of Bremer’s eleven locations were converted on schedule. Fortunately,
Bremer was not using the frame-relay service for much of anything anyway
and didn’t have a problem with the downtime that occurred.
Reviewing the Effect
Your IT folks can tell you technically how well your converged network is running and how to keep it humming, but only your workforce and your customer
base can tell you if it is truly working. More companies are going to VoIP than
ever before because of two primary benefits: increased features and reduced
expenses.
Features and costs of the
new VoIP network
In the case of Bremer Healthcare, all the players — doctors, clinical staff,
administrative staff, patients, and even suppliers — were overjoyed with the
results of the VoIP conversion. The new network had an immediate effect on
monthly expenses, and the numerous call features inherent to VoIP promoted
enhanced productivity, employee mobility, and new options for communications. Figure 12-4 shows the revised cost structure for Bremer’s circuit-switched
network after the VoIP conversion.
Figure 12-4:
Circuitswitched
costs after
VoIP.
Local
calling area
Pittsburgh
Pittsburgh
South Hills
Washington
Washington
Moon
South Hills
Pittsburgh
North
North
North
POTS FAX Modem Total Access
MRC Maintenance
lines lines lines lines lines
PRI
access
services
4
2
3
9
$585
$325
$910
$545
2
1
1
4
$260
$325
$585
$125
2
1
1
4
$260
$325
$585
$100
2
1
1
4
$260
$325
$585
$125
2
1
1
4
$260
$325
$585
$81
2
1
1
4
$260
$325
$585
$81
2
1
1
4
$260
$325
$585
$125
2
1
1
4
$260
$325
$585
$125
2
1
1
4
$260
$325
$585
$140
2
1
1
4
$260
$325
$585
$125
2
1
1
4
$260
$325
$585
$140
24
12
13
49 $3,185 $3,575 $6,760
$1,712
Intra- Intra- InterMRC
MRC
Local LATA state state Int'l usage
total
Annual
$3,185
$24
$21
$34
$0 $3,264 $4,719
$56,628
$645
$2
$0
$0
$0
$647 $1,357
$16,284
$472
$1
$0
$0
$0
$473 $1,158
$13,896
$698
$2
$0
$0
$0
$700 $1,410
$16,920
$412
$4
$0
$0
$0
$416 $1,082
$12,987
$405
$2
$0
$0
$0
$407 $1,073
$12,879
$635
$3
$0
$0
$0
$638 $1,348
$16,176
$570
$4
$0
$0
$0
$574 $1,284
$15,408
$684
$46
$6
$0
$0
$736 $1,461
$17,527
$540
$37
$8
$0
$0
$585 $1,295
$15,540
$725
$41
$4
$0
$0
$770 $1,495
$17,935
$8,971 $166
$39
$34
$0 $9,210 $17,682 $212,180
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Location
Main - Carnegie
Brentwood
Bethel Park
Canonsburg
McMurray
Robinson
Upper Saint Clair
Mount Lebanon
Cranberry
AlleghenyValley
Wexford
TOTAL
VoIP circuit-switched costs
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If you compare Figure 12-4 to Figure 12-1, you’ll notice the sharp reduction in
the number of POTS lines required: from ninety-nine down to forty-nine. The
addition of the PRI transport lines, to maximize bandwidth for off-net calls,
helped to consolidate much of the old POTS configuration.
Maintenance services were also added to the picture, which provided a
safety net that Bremer didn’t have before. Lastly, the big-ticket item that
was virtually done away with was the costly intralata expenses. With the
VoIP network, most of the intralata traffic was put on-net, thus bypassing the
metered expenses of the PSTN.
It’s not just a new way
to do circuit-switched
The circuit-switched aspects of the VoIP network are only half the picture. To
connect all the sites and enable them to use the Internet, a private dedicated
infrastructure was needed. The plan called for converting Bremer’s underutilized frame-relay network to a dedicated private network. Figure 12-5 details
the postconversion costs associated with the packet-switched side of the
network.
VoIP packet-switched costs
Figure 12-5:
Dedicated
services
costs
after VoIP.
Location
Main - Carnegie
Brentwood
Bethel Park
Canonsburg
McMurray
Robinson
Upper Saint Clair
Mount Lebanon
Cranberry
AlleghenyValley
Wexford
TOTAL
Local
T1
calling area lines
Pittsburgh
1
Pittsburgh
1
South Hills
1
Washington
1
Washington
1
Moon
1
South Hills
1
Pittsburgh
1
North
1
North
1
North
1
11
MRC
access
$575
$519
$575
$725
$675
$575
$675
$525
$505
$522
$958
$6,829
Internet
access
$825
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$825
Annual
cost
$16,800
$6,228
$6,900
$8,700
$8,100
$6,900
$8,100
$6,300
$6,060
$6,264
$11,496
$82,773
If you compare Figure 12-5 to the preconversion amounts in Figure 12-2, you
notice that the costs didn’t go down much. Most savings were due to the VoIP
design eliminating one of the two T1 lines at the Bremer main site.
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The big story with the dedicated side of the network is that the carrier
was taking advantage of Bremer. They used to have twelve T1 lines running
frame-relay services, and four of their sites couldn’t even connect. After the
conversion, Bremer had eleven T1 lines with full, dedicated bandwidth available to them — and the overall costs didn’t go up. Moreover, all eleven sites
had Web access through the main site’s Internet gateway.
Bottom-Line Analysis
In the end, it is the cost of business that determines if you can continue to do
business. The good news is that VoIP helps you continue business like never
before. If you’re having trouble justifying the productivity-enhancing features
of VoIP (increased mobility, agility, and customer satisfaction), look at the
bottom-line financial analysis.
For example, Figure 12-6 provides an executive summary of before-and-after
costs related to Bremer’s communications and data networking.
Annualized financial analysis
Figure 12-6:
Summary
of Bremer
Healthcare
VoIP
savings.
Circuit-switched
Item
1
2
3
4
5
6
7
Description
Recurring cost of existing system
Recurring cost of new system
Annualized savings
Gross annual savings
VoIP startup costs
Net annual savings (year 1)
Payback period
networking
$1,156,932
$212,180
$944,752
Packet-switched
networking
$86,832
$82,773
$4,059
$948,811
$790,732
$158,079
10 months
Before their VoIP conversion, Bremer had no one in-house who could manage
their communications, and only one young employee to fix computer problems. With the savings from VoIP, Bremer was able to hire several technicians
so they could develop the in-house network expertise they needed.
As Bremer’s IT manager stated, “VoIP’s value is priceless.” What they gained
was much more than what can be expressed in dollars and cents, even though
the dollars and cents are impressive. Bremer’s immediate savings paid back
their startup costs in approximately ten months — faster than they had
expected. Even with startup costs, Bremer saved $158,000 in their first year
of using VoIP. This provided an unadjusted projected return on investment
(ROI) of $948,000 for the second year.
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In This Chapter
Finding out whether VoIP will work for you
Reading the small print
Evaluating your current networks
Saving with VoIP
Summing up the savings
C
onsidering VoIP for a single-site, smaller company has a lot of parallels
to putting VoIP in at a larger multilocation company (see Chapter 12).
There are also some big differences. These differences typically pertain
to the company’s mission and scope, the volume and categories of calls,
and the company’s strategic plans for the future. It may not seem like these
three things are critical for a smaller company, but they determine if VoIP
is a good fit.
This chapter focuses on the needs of smaller companies, particularly those
with single locations. You’ll find out about a company that may closely parallel your own and see exactly how they benefited from switching to VoIP.
Is VoIP for You?
If a single-location company does the majority of their business within a
three-mile radius of their location, the majority of their calls are likely in the
local calling area. In this case, there would not be enough of a reduction in
toll charges to offset the startup costs for VoIP. VoIP is not for everyone; in
this case, I would help the company make the most cost-effective use of their
existing POTS infrastructure.
On the other hand, if a single-location company does the majority of their
telephony business outside the local calling area, we need to take a look at
the monthly expenses for telephony and computer data networking.
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Many single-location companies fit this situation. For example, I consulted
with a company that ran six call centers out of a single location. This company
does more telephony business in a week than some of the Fortune 500 companies do in a month. Their monthly invoices for phone services were in the
multiple millions of dollars. They called everywhere in the United States and
the world and received calls from everywhere in the world for their many
clients. Such a company actually redefines the meaning of a small, singlelocation company.
The analysis in this type of context would pretty much follow that of Bremer
Healthcare, the case study in Chapter 12, with only a few variances. Instead
of location line items for each site (as in Bremer’s case), an analysis would
use call center line items and calculate the traffic patterns and costs. My
experience with call centers is that they usually have competent people at
the helm of their telephony services, and if they are not running VoIP, they
have the best of the best that you can derive from traditional telephony
services. These folks tell the carrier what they want and jump all over them
when they don’t get it. As a result, I’m more concerned with all the other
single-site, smaller companies that directly depend on carriers. These are
the companies that get taken to the cleaners more often than not.
Location alone does not give you all the information you need to recommend
a conversion to VoIP. To make sense in a small company, VoIP has to change
the cost picture.
In small, single-site companies with largely local calling area telephony usage,
the risk is that VoIP could become an added expense that may not have a
payback and may not change the company’s productivity. These are crucial
points that a smaller company needs to think through before making a VoIP
decision.
The bottom line is that VoIP has to either reduce your operating expenses or
help in some way to increase your revenue.
Figuring out those contracts
After a thorough analysis of how your single-location company makes and
receives its telephone calls, you can determine whether a move to VoIP is
worth making. That said, you also need to know your company’s long-term
plan so that you can factor your goals into any VoIP design.
Another significant factor is whether or not the company is encumbered by
any current contracts. If they just signed a three-year lease for non-VoIP PBX
and all its telephone stations, the lease costs must be considered in any plan.
Any carrier services contracts can usually be terminated without penalty or
can be modified with a new term, but now running with VoIP.
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After current monthly billings, the long-term plan, and any outstanding contracts are figured into the potential for going with VoIP, a complete analysis
can be performed to financially support whatever decision is made.
Current costs meet long-term plans
A client of mine, Keystone Mortgage (a fictitious name), had a long-term
mission that included increasing its presence both regionally and within the
state of Pennsylvania. Ninety-five percent of their business was conducted
over the phone. They were doing so well in their area that they expanded
into the outlying regional areas. They were also looking at putting an office in
Philadelphia because they were told that doing so would enable them to call
customers in those areas more cheaply.
When I sat down with Keystone’s owner and president, it was clear he wanted
Internet access for all Keystone’s agents. He was concerned because telephone bills had gone through the roof since they expanded their regional
calling. He told me that he didn’t understand why they had to pay so much
to give everyone their own voice mail box or to do simple things like have a
conference call. He also expressed dismay over the fact that for all Keystone
was paying, they could not get better Internet services, e-mail for everyone,
or a company Web site.
Five of the agents had dialup modem lines for the Internet, and they also paid
$25 per month per line for unlimited access to the Internet. They were pondering two additional modem lines but thought the cost per month was high.
Everyone had to work out times when they could share the computers tied
to the modem lines. Big uploads and downloads were a problem because the
dial-up connections were slow. No one enjoyed this arrangement.
Analyze bills and contracts
I told Keystone Mortgage’s president that it appeared their telephony systems
were inadequate and that there were better, more cost-effective alternatives.
I said the alternatives could improve their telephony systems with features
such as voice mail, the Internet, e-mail, and a Web site.
I told him that the best way to start was to analyze their current infrastructure. All I needed was a copy of all monthly billings related to telephone
systems, computer systems, and any contracts Keystone might be obligated
to at present.
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Evaluating Existing Networks
After you analyze your company’s billings and contracts, you should end up
with a spreadsheet that lists all one-time and monthly recurring charges by
line item. When your company sees what they are paying, it’s amazing how
quickly they lose any preconceptions that they are a small company. It is typical for clients — even small single-site companies — to not realize the total
cost of their current infrastructure.
It became immediately apparent that Keystone Mortgage could benefit from
a VoIP telephone system. They could pay for it with the savings they would
realize from reducing POTS lines and toll charges. They had no dedicated
transport lines in the picture. They had a LAN and were paying a monthly
lease charge for an e-mail server, but the company leasing it required an
additional contract to actually make the server work in Keystone’s LAN environment. Keystone’s president had not signed the contract for the extra work
because one of the agents, who had some tech knowledge, said he could do
the extra work at no cost, but it was not happening.
There were so many things that this company was doing in a less-than-optimal
way; the situation begged for a line-item analysis, as shown in Figure 13-1.
Keystone’s annualized expenses added up to nearly $156,000. They were
pouring money down the drain. When I showed the president the spreadsheet in my follow-up meeting, he was overwhelmed and highly motivated to
listen to solution alternatives.
Breaking down the costs
of POTS telephony
Much of Keystone’s recurring costs were wrapped up in their use of intralata
calling. Each of the agents had a daily calling quota, and they reached their
quota each and every day. The average number of calls per agent per day
was thirty-eight to forty-seven, including twenty-one intralata calls. The
agents averaged three intrastate calls per day, but they wanted to expand
this even more. The remaining calls were to the local calling area. Keystone
also had significant outbound fax calls that added minutes to all calling areas.
Keystone Mortgage had no idea of the carrier usage cost of the calls they
made. They did not distinguish calls to the local area from calls to the local
toll area. (See Chapter 3 for more on call types.) Most people draw a distinction
when the call is across the state or even out of state. It was no surprise that
Figure 13-1:
Keystone
Mortgage’s
cost
analysis.
TOTAL
E-mail server lease
Ethernet switch 10/100Mbps
SUBTOTALS
Internet service provider
SUBTOTALS
Call trace
Voice mail
Call forwarding
Conference call
SUBTOTALS
4.25
6.5
5.25
4.75
20.75
$25
MRC
$125
$125
Other charges (nontelephony)
5
Add-on services
Add-on call features
POTS FAX Modem Subtotal POTS
MRC
lines lines
lines volume
lines
access
15
2
5
---22 $1,606
255
34
30
7018
48510 6468
0
54978
7920
176
0
8096
1320
44
0
1364
0
0
0
0
$1,606
$8,796
Intralata
$1,295
$55
$55
MRC
usage
$0
$0 $10,497
Intra- Interstate state Int'l
$351 $8,796 $1,295
$351
Local
Usage
$418
$34
$452
$125
$125
$64
$98
$79
$71
$311
$12,103
MRC
total
$155,896
$5,424
$1,497
$3,735
$145,240
Annual
7:17 PM
Location
Upper Saint Clair office
Local calling
Intralata calling
Intrastate calling
Interstate calling
International calling
SUBTOTALS
Access
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Existing Tradtional Infrastructure (voice)
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the company’s expansion into the nearby regional toll areas added horrific
usage charges. This factor alone made them a candidate for VoIP.
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Breaking down the costs
of computer networking
There was even more to consider when it came to computer networking. To
do VoIP correctly, you need a computer network somewhere in the picture.
Keystone had a fledgling Ethernet LAN running off a leased LAN switch. They
were paying an outside contractor $34 per month for the privilege of connecting their computers to this switch.
Keystone was paying the same contractor $418 per month for an e-mail
server. The contractor installed the server and connected it to the LAN
switch. All computers could see the server on their individual computers
but could not connect because the employee computers did not have a
required piece of software installed. The contractor delivered this software
(called the client software) with the server, but the contract for the billable
time to install the client software was not signed. In addition, no provisions
had been made to connect either the LAN or the server to the outside Internet.
Putting VoIP to Work
The optimal solution to Keystone’s problems could be realized by setting
up an efficient data network capable of handling VoIP. The company needed
to add a multifunction gateway to their LAN. To connect to the Internet,
they needed a dedicated T1 line that would terminate on this gateway. The
T1 line would provide the level of digital bandwidth needed for both data
and VoIP.
They also needed an Internet service agreement to provide access and VoIP
telephony hosting services over this dedicated T1 line. The agreement would
provide e-mail accounts for all, a Web site for the company with unlimited
storage, and their own domain name. Internet access over the company network would put an end to the need to share computers with dial-up lines.
Keystone would now be able to do business and advertise their services on
the Web at high bandwidth levels.
The existing lease contracts did not have a lock on them, so Keystone was
able to terminate them immediately, resulting in a savings of $452 per month.
The new VoIP servers more than replaced whatever applications this lease
arrangement was trying to accomplish.
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Too good to be true?
Any VoIP conversion has a few one-time equipment charges. For clients that get the willies over
these charges, I offer them the option of leasing
the items, inserting language into the contract
that says they can yank it all out if it doesn’t do the
job. It’s easy to understand how some companies
get worried about startup charges, especially if
they’ve been burned before.
For most customers, leeriness crops up when
asked to shell out $18,000 or so for a VoIP gateway that presumably does everything from soup
to nuts. Imagine the following conversation
between a customer and the VoIP consultant:
Client: “So let me make sure I understand you.
You’re telling me that if I sign up for this service,
this gateway thingamajig will let me carry all my
on-net calls for free?”
Consultant: “Yes.”
Client: “And I won’t get much of a bill for any
long-distance calling, right?”
Consultant: “Right!”
Client: “Which means I save close to $9000 a
month, right?”
Consultant: “That’s right.”
Client: “That sounds too good to be true. Something has to be wrong with that picture.”
Consultant: “I can give you references of other
companies that did it. We can also arrange for
your agreement to have language that permits you
to go back to your old company’s network at no
cost should the results not meet expectations.”
Just because something sounds too good to be
true doesn’t mean that it really isn’t true. Many
companies receive immediate savings from
VoIP that really are amazing.
Supporting your telephony calls
For supporting calls primarily to the local calling areas, I recommended a
PRI line. (There was no getting around Keystone’s local calling requirements.)
The majority of toll calls and faxes could be made “toll free” over the dedicated
T1 line through their new hosted VoIP service. The savings would include
calls or faxes to any toll area anywhere in the country and enable Keystone
to expand their market reach to any area in the United States with no additional toll charges. Before VoIP, they were trying to figure out how to get the
revenue to pay for a new office across the state in the Philadelphia region.
Now they were happily looking at how to add agents to their present location, if and when needed, to sell their services across the country.
Much of the cost for the conversion to a VoIP environment would come from
their savings on recurring toll charges. To understand how it is possible
to manage these costs to your company’s benefit, take a look at Keystone
Mortgage’s costs, as illustrated in Figure 13-2.
193
Figure 13-2:
Cost
analysis
after VoIP
conversion.
TOTAL ONE-TIME COSTS
Start-up costs
TOTAL ANNUALIZED
Upper Saint Clair office
SUBTOTALS
2
12
0
2
0
Modem
lines
2
0
0
0
0
Dedicated access
Add-on services
FAX
lines
Subtotal
POTS
lines
6
Upgrade
existing
VoIP
VoIP
VoIP
PBX
servers (2) gateway
switch
$2,745
$21,378
$18,477 $3,225
VoIP
VoIP
phones consulting
$7,400
$8,400
Usage
Total
$61,625
MRC
$695
$695
MRC
$2,495
$2,495
$695
$2,495
PRI
MRC
Intra- Intra- InterMRC MRC
line access Local lata state state Int'l usage total
$325
$763
$326
$4
$0
$0
$763
$326
$4
$0
$0 $0
$329 $1,092
T1 line
$695
$695
Network equipment and consulting services
2
284
24
0
0
POTS
lines
Subtotal
calls
monthly
---6512
24
2
0
$ 51,389
$8,340
$29,940
$13,109
Annual
7:18 PM
VoIP Internet Service Provider
SUBTOTALS
Location
Upper Saint Clair office
Local calls (nonmetered)
Intralata call minutes
Intrastate call minutes
Interstate call minutes
SUBTOTALS
Local
calling
area
Pittsburgh
Circuit-switched
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194
VoIP Infrastructure (voice & computer data)
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Understanding VoIP savings
For smaller, growing companies, it may be a bit difficult to grasp the real savings realized with a VoIP conversion if you look at only monthly charges. It is
much more effective to consider annualized costs and savings. (In Figure 13-2,
you can see the annualized savings on the right side.)
For Keystone, the first item that changed considerably is the sharp drop in
recurring toll charges. The revised annualized figure for circuit-switched,
POTS-related telephony is just over $13,000. Local calling is now supported
over a 23-channel switched-access PRI line, and toll-related calling is now
supported by a T1 line running VoIP services. POTS lines dropped from
twenty-two to just six. These changes resulted in an annualized savings of
more than $132,000 when compared to Keystone’s previous method of
making calls. That magnitude of savings provides the company with room
to grow and change.
Next you’ll notice that the call feature charges are gone. (See Chapter 3 for
the dirt on traditional add-on charges.) In a VoIP system, all the usual call
features and many new and exciting features come with the system for free.
This is one advantage of using your computer network and the TCP/IP protocols to carry your telephony calls.
The next figure that sticks out is a whopping $2495 per month for dedicated
VoIP and Internet access. Many would say that is a lot of money for Internet
access. Note, however, that this amount is not for only traditional ISP service
but also includes a few other critical services. These other services add
tremendous value to the VoIP design for a single-site smaller company that
has no full-time IT staff. You should take note of these added-value services
before drawing any quick conclusions about lack of value:
Configuration of gateway routing functions to support TCP/IP on
the LAN
Carrying unlimited VoIP telephony calls at no additional cost to anywhere in the country
Secure firewall services
E-mail accounts for all employees (with unlimited storage)
Hosted Web site
Domain name registration
Support services 24 x 7
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These added services solve a large part of Keystone’s headaches and support
their strategic mission plans to the maximum. This solution can occur only if
Keystone uses the dedicated T1 line that runs from the company’s gateway to
the VoIP/Internet provider.
As you can see in Figure 13-2, Keystone’s startup cost for the conversion was
just under $62,000. That’s a lot of cash for a small company to cough up, but
now they are rolling in the dough. They got their money back in six months,
revenues are up 28%, and they are talking about expanding into other states
and renting the floor above them for new staff. Soon they will no longer be
considered a small company.
Financial Analysis
For small single-site companies, demonstrating the cost benefits of VoIP is
not overly difficult. Keystone Mortgage, for example, had only fifteen people
in the company, but they had an annualized expenditure of $156,000 for their
existing infrastructure. For that kind of money, the staff should not have to
share dial-up modem lines for Internet access.
Expansion plans should not be complicated by unnecessary costs resulting
from traditional circuit-switched phone systems. Many small single-site companies could probably identify with the savings experienced by the implementation of VoIP at Keystone Mortgage. Just compare what they were
getting and paying under the old system and the new system.
More importantly, look beyond the money savings and see the other types of
value they gained. They have become a much stronger company with all
kinds of scalability. Morale has improved along with productivity. They were
able to expand into markets across the state without having to move anything, add anything, change anything, or even pay anything more.
Figure 13-3 provides the financial analysis summary for the Keystone
Mortgage case study. It totals their revised monthly operating expenses, savings, and payback period. This summarizes the savings for both the circuitswitched portion of their infrastructure and the dedicated, packet-switched
portion.
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Annualized financial analysis
Figure 13-3:
Executive
summary of
expenses
after VoIP
conversion.
Dedicated
Circuit-switched
packet-switched
networking
networking
$155,896
$0
Item
1
Description
Annual recurring cost
old system
2
Annual recurring cost
new VoIP system
3
Annualized savings
4
Gross annual savings
$96,167
5
VoIP startup costs
$61,625
6
Net annual savings (year 1)
$34,542
7
Payback period
9 months
8
Value of new VoIP network
going forward
Priceless
$51,389
$8,340
$104,507
($8,340)
When I first began working with Keystone Mortgage, the president had no
idea what a T1 line was, and in fact did not know such a thing existed. He
thought all telephone lines were the same and that all phones just plugged in
and worked. He was totally blown away when he got his new VoIP phone and
was able to have the company’s new Web page on the phone’s screen. He
said, “Great, now I can surf to the stock ticker Web site and get the latest
rates.” He was starting to see immediate benefits of the VoIP conversion.
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Chapter 14
Providing Dollars
and Support
In This Chapter
Figuring the costs of VoIP
Investing in VoIP
Understanding least cost routing
Furnishing the support
Keeping current
T
he costs of VoIP can be difficult to track. VoIP runs on your computer
network; therefore, most of your costs are not calculated the same way
traditional telephone services are.
If you are a consumer or a small business with fewer than fifteen employees
and lots of toll charges each month, the cost savings with VoIP will easily
offset your POTS telephone bill. If you are a company with many people using
lots of minutes on the public telephone network each month, you will want to
use your highlighter and calculator for this chapter. The same holds true if
you are with a larger company that has multiple locations.
Evaluating VoIP Costs
Consider a case where you have two distant locations supported by traditional telephone systems, which means one or more PBXs (see Chapter 11).
The general rule was that companies with more than a hundred employees
would use the PBX model, putting at least one PBX at each location. With the
PBX model, the customer typically owns, operates, and maintains the telephone switching system.
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PBXs are capable of using dedicated access lines or switched access lines.
But to connect locations over thousands of miles, the company would likely
use dedicated T1 lines.
In a PBX model, the carrier is responsible for providing the outside access
lines into each PBX, but the customer takes care of any hardware or software
changes that must occur inside. A PBX is like having your own switchboard.
Most of the costs associated with the PBX model are fixed. Normally, the
external costs that cover what type of access lines you use are also fixed but
billed monthly.
However, monthly recurring charges are not fixed. Depending on the services
being used, these charges can add up to a huge monthly expense. Many larger
companies (those with hundreds of locations) pay millions each month just
for recurring carrier charges. VoIP is the technology that can reduce, if not
eliminate, a large portion of these types of charges.
Before you can consider converting to VoIP, you need to have a handle on
your existing costs. How else can you explain to your company’s management why you want to change?
If you are in a new company just starting out or you have a branch location
that is moving into a new building, the selection of VoIP to carry your telephony services is likely a no-brainer when it comes to the math. You still
need to be diligent in researching and listing all your telecommunications
costs, breaking them down according to one-time charges and recurring
charges. You’ll find that individual, recurring line items are overwhelmingly
targeted to be either reduced or eliminated by VoIP.
Gathering cost data
Some costs associated with VoIP are similar to the voice services of old,
but other costs will definitely change. You’ve discovered, in earlier chapters,
both the differences and similarities between VoIP and traditional telephony.
From a business perspective, it’s beneficial to try to make sense of the differences and similarities in your particular situation by identifying the costs
associated with VoIP.
VoIP hardware, depending on your configuration, can be purchased and
depreciated like any capital investment, or it can be leased and addressed
as an expense item. In any VoIP conversion, you also must take into account
maintenance costs for both hardware and software.
To make a case for replacing an existing voice system with a VoIP system,
you need to be able to show the current expenditures for voice services and
compare these to the projected expenditures and savings of the new system.
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At a minimum, you need to identify the following items as they pertain to whatever traditional system is being used at each location considering a change.
Try to get three to six months of billings for each item:
Line costs that currently support voice traffic
Line costs that currently support data traffic
Monthly costs for local, intralata, intrastate, interstate, and international
Hardware costs associated with your PBX or KTS
Digital telephone stations
Maintenance costs (hardware, software, support services)
Training and in-house expertise (PBX and KTS models)
These items help you get a good idea of your overall voice costs as they
relate to existing systems. (Similar information was used in putting together
the financial justifications presented in Chapters 12 and 13.)
To estimate your costs in a VoIP world, a different set of figures is required.
Start with projections for the following information for each site considered
for conversion:
Transport line costs
Monthly costs for local, intralata, intrastate, interstate, and international
Hardware costs associated with upgrading the network to support VoIP
(such as gateways and VoIP switches)
IP phones (hard, soft, and wireless)
Maintenance costs (hardware, software, support services)
Training
By gathering the information listed in the preceding section, you are in a
better position to approximate an apples-to-apples comparison.
Performing comparisons
VoIP challenges every preconception you may have had about telephony. In
traditional telephony design models, component cost comparisons were less
complex. They tended to follow a system hierarchy made up of various subsystem components, some of which had other subsystem components. For
example, a PBX might have a backplane circuit chassis into which you could
install circuit-pack subsystem boards to connect lines. Boards and lines had
to correspond. A T1 line had to have a DS1 circuit back, and so on.
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In a VoIP design model (also called a converging network model), the network
becomes the system. The computer data network is now called the foundation network. Traditional telephony networks are converged onto computer
networks to run not only data but also voice and video. Indeed, VoIP runs on
and requires the computer network.
Managing your costs by line item and relating these costs to their product
and services is the optimal way to illustrate and justify how a VoIP design can
reduce your telephony costs. The nexus of savings from VoIP is determined
by two important line item cost factors. One is the cost management of your
network’s transport lines. VoIP can use the same lines that may be in operation to connect your company’s network. In some cases, no additional lines
may be needed. The other factor is that VoIP can reduce your recurring usage
charges for intralata, intrastate, interstate, and international telephony service categories. VoIP can also reduce the number of POTS lines required and
significantly reduce your local calling recurring charges.
Transport lines
With VoIP, all toll-related voice traffic that previously traversed traditional
phone lines between locations A and B now traverses the VoIP WAN line at no
additional cost using the T1 transport line. In addition, each site can use
a gateway to connect their LAN to the PSTN using a PRI line for local calls.
The PRI replaces twenty-three POTS lines.
When calculating how much bandwidth is required to support VoIP traffic
over the data network, remember the rule among telephony experts: one line
or POTS line equivalent for every six to eight users. This ratio is open to
modification, however, based on what percentage of their day each user
spends on calls. (Your VoIP partner should be able to assist you with this
calculation. If not, you may want to select another partner.)
After you have the number of POTS line equivalencies needed to support
your VoIP traffic over the T1, multiply that number by either 25 (the bandwidth, in Kbps, needed for compressed traffic) or 80 (the bandwidth for
uncompressed traffic). This gives you the amount of dedicated bandwidth,
in Kbps, needed to support your VoIP traffic over the existing WAN data line.
Armed with this information, you can contact your WAN circuit provider
and obtain the cost of the additional bandwidth along with any additional
supporting changes. This is one area where you will see a cost increase
because you are adding additional bandwidth to an existing line, but these
costs should be incremental.
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Recurring usage charges
These costs for recurring usage can be a little tricky because calling patterns
can change, so I always try to err on the conservative side. To project what
your toll calls will cost you after conversion, look at the average of the last
six months’ worth of toll charges. Summarize all the calls made between locations A and B (the two sites you are converting to VoIP). Subtract the average
total costs of these calls from your actual costs under VoIP to achieve your
projected savings.
Ask your voice provider to give you your billing in a soft copy format, in addition to your regular printed bill. A soft copy is your monthly bill on a compact
disk (CD), usually in Excel or Word format. This makes it easier for you to sort,
merge, and summarize data to get it in the format you need.
Some VoIP components do not play well together. Do your homework
and work closely with a trusted partner to lead you in the right direction.
Although all systems may claim to support industry standards, most vendors add an extra layer or features that may not translate well between
disparate systems.
After you have identified and settled on your vendor, figuring out hardware
and software costs is relatively straightforward. A good place to start is to
provide your wish list to your vendor and await the numbers.
When selecting hardware, don’t fall into the cheapest component trap, especially when it comes to switches and handsets. Handsets can be powered in a
number of different ways, and each handset has different power requirements.
Manufacturers handle power differently as well. Going the cheap route, you
may find yourself with a 24-port switch that is capable of powering only
twenty VoIP handsets because the handset and switch do not negotiate
power properly.
Another piece of essential hardware is the uninterruptible power supply (UPS).
A UPS provides power in the event of an outage. Without this component,
you lose the phone if you lose power. In the PBX model, the voice company
includes a battery backup system in the event of a power outage, so you
always have a dial tone. You need the same functionality for VoIP. You need
backup power not only for your VoIP PBX and associated hardware, but also
for your handsets. Make sure you purchase a UPS matched to your needs and
that all VoIP components are plugged into the UPS.
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Costs related to personnel
The complexity of VoIP systems is different from traditional voice systems in
some respects. Traditional systems typically run proprietary operating systems
and vendor-specific applications. Configuration can be performed by internal
staff, after they are properly trained, or through a contractor. In a traditional
voice system, the telephone company managed the end-to-end network. The
voice network carried only voice traffic over its own dedicated infrastructure
internal to the company or facility. Troubleshooting and problem resolution
were addressed in this isolated network. The traditional voice network was
also built for redundancy and fault tolerance.
With VoIP, voice traffic is carried over the same network as data traffic, using
the same protocols as data traffic and sharing the same bandwidth. Many of
the same personnel and systems used to manage data networks can be used
to manage VoIP networks. Thus, the biggest difference between traditional
phone systems and VoIP is in how they are managed and maintained.
In the traditional pre-VoIP system, the voice provider managed the entire
external infrastructure up to the PBX (and in some cases including the PBX).
VoIP systems can be managed the same way, or they may be implemented
and supported internally. The components of the VoIP system require a different set of skills to implement and maintain.
Making the Investment
Investing in any new technology is about not only how you are going to pay
for the technology, but also understanding what you expect to achieve from
the technology. VoIP is no exception. If you set expectations early in your
project and define key performance indicators by which you can measure
success, your transition will go more smoothly.
Depending on how you plan to pay for the transition — buy and depreciate
versus lease and expense — the costs may vary. Each approach has advantages and disadvantages and the choice to purchase outright or lease is
based on many factors, including cash flow, money on hand, projected earnings, company culture, financial stability, and the life cycle of the technology.
If you purchase outright, you can depreciate the costs over a period of time,
but there is an initial outlay of capital. You will probably have to keep the
system for the full depreciation cycle, so be sure that cycle matches the technology life cycle. Otherwise, you may end up with outdated technology that
is costly to upgrade. Maintenance costs also escalate as the system ages.
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The lease-and-expense approach allows you to stretch out payments over
the life of the lease. You’ll want to make sure your lease fits your term needs
and be especially careful of how the lease ends. At the end of the lease term,
there will probably be a buyout, which can be anything from a $1 buyout to a
fair market value buyout. The fair market value is usually set by the leasing
company and may be more then you anticipated. With the leasing approach,
make sure you have someone experienced in the art of leasing involved early
in your cost-evaluation exercise.
You can negotiate the best deal by knowing what you need, the different
products, and how much you are willing to spend. This may sound like
common sense, but common sense often goes out the window when it
comes to unfamiliar technology. You need to know your business needs,
tailor your system requirements to these, and understand what you are purchasing. You also have to know how the system is maintained and who does
the maintaining.
Cost-Effective VoIP Designs
As you find out in Chapters 12 and 13, implementing VoIP at a single location
doesn’t always provide as big a return on investment as using VoIP to connect
multiple locations. In a single-site installation, your VoIP system functions like
the traditional PBX. The real cost savings are realized when you connect locations and use your wide area network (WAN) to carry voice and data between
locations.
Least cost routing can also offset some of your long-distance charges. Here
is how least cost routing works: Suppose you have two locations, one in San
Diego and one in Pittsburgh. You connect these two locations with a dedicated transport and eliminate any toll charges between the locations. With
least-cost routing, if you want to call Los Angeles from Pittsburgh, the VoIP
PBX can be configured to route your call through the network before it finally
goes off-net in San Diego. The cost for the call is lower because it costs less
to call from San Diego to Los Angeles than it does from Pittsburgh to Los
Angeles.
Simple, right? Not so fast. How are you going to prove this? If your two
locations already existed and had traditional phone systems, it would be a
straightforward process. Take six months of voice bills from each location
and look at calls between the facilities. Also examine calls to areas surrounding each location.
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What if one of your locations is new and you don’t have historical billing
information for comparison? Contact the voice carriers and ask for their
tariff tables (they all publish them). You can use these to estimate the cost
of calls, giving you some idea of the costs and savings of using VoIP between
the two locations.
Providing Support
If you are a multilocation company with limited staff, implementing VoIP may
not necessarily increase the need for more full-time people, but it increases
the need for support over the near term until everyone gets up to speed on
the new way of doing telephony and using all the new and exciting features.
Choices for support are limited to two broad categories, each of which have
their own peculiarities:
Going in-house
Using a VoIP partner
People will not tolerate an unstable telephony system. In the real-time world
of business, a stable voice communications system is essential. Before
deploying your VoIP system, run the traditional voice system in parallel with
the VoIP system to make sure your configuration and circuits are functioning
properly. Be sure to run a pilot test using some key decision-makers in your
company; this will help sell the new technology.
In-house
Depending on the size of your network, in-house support can be a bonus if
you have a dedicated, knowledgeable staff. A small staff supporting a global
infrastructure, however, may not be the most optimal situation. A small staff
may be desirable from a design and management perspective, but when supporting a global infrastructure, employing a hybrid of in-house people and
partners may be better. When you start to consider the language barriers and
cultural differences inherent in any global solution, the right partners make
all the difference.
Your in-house team needs to closely monitor and identify changes to voice
and data lines. Voice is not as forgiving as data traffic, so it needs to be prioritized over data and other application traffic; close monitoring helps ensure
that voice traffic is given the priority it requires. An unannounced change to a
provider’s infrastructure can degrade the quality of your voice calls, so your
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in-house team needs to monitor and identify if or when this occurs. End-to-end
testing between locations with the proper tools exposes any problems in your
circuits. If you choose your tools poorly or do reactive monitoring, you are at
the mercy of the circuit providers.
Partnering
VoIP is a relatively new technology, so I lean toward partnering as a way of
augmenting existing staff. Partnering also has a training benefit — as your
staff works closely with an experienced implementation partner, they quickly
gain knowledge that is beneficial to your organization. Finding the right technology partner is important. Be sure you check references of any partner
being considered. You might want to request a site visit to a company where
the prospective partner has worked.
To get you started, see Chapter 18 for a description of some of the top VoIP
manufacturers. Also see Appendix A for a list of some of the top VoIP carrier
service providers. Most also lease traditional transport carrier services and
have established customer service departments.
A partner can be indispensable when moving from a traditional voice system
to a VoIP solution, especially if this is your first implementation of the technology. If you are in a dynamic environment, however, outside partners may
shock you with their invoices. Changes cost money, and the more changes
your partner needs to make in your company, the higher the cost. If you are
in a rapidly changing environment, try to keep maintenance and support inhouse as much as possible.
Keeping Up with Technology
Keeping current with telephony technology changes requires the same
dedication and consistency as with other technologies. Your staff should
stay current by joining local user groups and attending system-specific
conferences. If none exist in your area, start one or attend meetings in
neighboring cities. Stay current through trade magazines. Schedule monthly
meetings with your VoIP partner to review system configurations and discuss
upcoming system changes and enhancements.
Develop a relation with the vendor and schedule regular meetings to discuss
your current system needs and future concerns. Request a copy of their annual
plan and their current strategic objectives. The more information you can
obtain, the better. Keep an eye on trends in the industry. Remember that not
all changes or upgrades may be necessary for your system.
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Before implementing any changes to an operational system, you may want to
implement it on a test system. If you don’t have a test system in-house, you
may want to set up a contract with someone who does. This approach not only
helps you test changes but can also be used to train your staff.
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The Part of Tens
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In this part . . .
ave you ever talked to someone and asked him or
her to “cut to the chase”? Did that person then
turn around and say “well, let me give you ten good
reasons . . . ”? If so, chances are good that you just talked
to someone who finished reading a For Dummies book.
Welcome to the venerated Part of Tens — something
you’ll find in all For Dummies books. Here you find four
chapters that give you ten good reasons for whatever is
being discussed. In Chapter 15, you find ten good reasons
for your company to switch to a VoIP system. Chapter 16
gives ten similar reasons for individuals to switch to VoIP.
In the adoption cycle of any new technology, rumor and
innuendo swirl about. VoIP is no exception, so Chapter 17
explodes ten myths that may stop you from considering
your own conversion. Finally, Chapter 18 introduces you
to the top ten VoIP manufacturers — the go-to people in
the industry.
All in all, the Part of Tens provides many more than ten
reasons to sit up and pay attention; it’s a great place to
cut to the chase and quickly get just the information you
need.
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Chapter 15
Ten Reasons Why Your Company
Should Switch to VoIP
In This Chapter
Changing direction of the telephony industry
Feature-rich, cost effective alternatives
Existing investment protection
Seamless maintenance and management
Flexibility and portability
Enhanced network management
Better utilization of personnel
Productivity applications
Better bandwidth utilization
Reduced costs
T
he reasons to switch to VoIP are countless, depending on how far you
want to project the future of the marketplace. For now, here are the ten
best reasons to make the switch.
Changing Direction of the
Telephony Industry
Over the next few years, much of the $300 billion per year telecommunications industry will migrate and convert its equipment and carrier services to
support packetized VoIP services on the WAN. It will not be long before traditional telephony systems providers are outdated.
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As older providers lose customer base and revenue, they will streamline
operations and eventually close their doors. The providers that stay in business will need to increase prices and therefore become noncompetitive. VoIP
technology has become the strongest influence in the telecommunications
provider marketplace.
As VoIP emerges worldwide as the number one replacement for traditional
circuit-switched telephony infrastructure, manufacturers of telecommunications gear will convert their product lines to meet customer demands for
VoIP-enabled systems. The same holds true for network services providers.
They will convert their core service offerings to give priority to VoIP-related
services. In fact, this is already occurring with most major carriers. The
demand for circuit-switched equipment and network services will decline. As
a result, the cost to suppliers who stay in the circuit-switched niche will go
up. These costs will need to be passed on to the customers.
The leading VoIP and carrier services companies have made a commitment
to developing secure and reliable IP telephony systems, communications
software applications, life-cycle services, and carrier provider services. For a
list of the leading manufacturers in the VoIP field, see Chapter 18. For a list of
the leading VoIP providers, see Appendix A.
In light of newer VoIP products and services, customers will want to convert
to VoIP so that they have adequate support available from outside companies. Many companies will also want to develop the VoIP skills of their inhouse personnel. In this way, companies can insure their long-term growth by
reducing costs and increasing revenue. VoIP can save companies lots of
money in operating expenses, but if you have a multilocation company, converting to VoIP does require planning and VoIP skills.
Feature-Rich, Cost-Effective Alternatives
Most traditional telephony calling features have made their mark on the
industry. Features such as voice mail, call transfer, call forwarding, and threeway calling have become familiar to all of us. The costs of these features are
either rolled into the cost of your company’s private telephony system, or
you pay for them à la carte.
All traditional telephony features as well as many new features and communications applications are available in the brave new world of IP telephony. The
number of calling features is overwhelming. And they all come with no additional cost because they are IP-based and are carried over the computer
network.
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Simple features such as being able to look at your telephony station and see a
visual indicator that tells you whether someone in your calling group is “present” but on the telephone at the moment can help increase employee productivity. (Think how many times you wasted time calling people, only to get
a busy signal or their voice mail, not knowing whether they were at their desk
or not.) The presence feature is just one of many features available with VoIP.
Or how about the ability to run a soft phone on your computer and do telephony using a point-and-click process with a headset? Such a capability
would never be contemplated in traditional telephony because that world
can’t support computer-related applications in a seamless manner. Many
other calling features are available in VoIP, all just as compelling to companies considering a change.
Existing Investment Protection
If your company has a traditional telephone system (such as a PBX or KTS) in
place, you can protect your investment by adapting the system in the new
VoIP network. The PBX system probably includes many digital telephone stations. These telephones can also be reused in the new VoIP environment.
Your company can migrate to VoIP while protecting your existing telephony
hardware investments.
A forklift upgrade is when you get rid of everything from the older system and
therefore lose your previous investment. The other approach is to use some
or all of your existing equipment. With the right VoIP partner, you can avoid
forklift upgrades to VoIP.
Seamless Maintenance and Management
The full benefits of VoIP are realized in a converged network — one in which
data and voice packets travel over the same infrastructure. Such a foundation
eradicates redundant information systems, so the major tasks of installing
and managing VoIP become more cohesive. Managers have more effective
and direct applications to support their many challenges. They can manage
not only computer data applications, but also IP-based telephony and videoconferencing systems. Unified database applications running over the network provide real-time, seamless access to all information needed to
maintain the VoIP network.
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Moves, adds, and changes that would require complex and costly resources
in a traditional telephony network do not require the manager to do anything
in a VoIP network. Instead, the network automatically adjusts itself to accommodate a user’s new location. Usage, accounting, and other metrics data are
available to the manager through any computer device attached to the network. With VoIP, managing and maintaining the network becomes cost-effective
and seamless. Staff do not get caught up in problems and stay focused on
business deliverables.
Flexibility and Portability
IP telephony has spawned many applications that increase both the flexibility
and portability of communications. For instance, a soft phone provides
mobile employees with easy access to real-time communications and the
same calling features enjoyed by stationary employees. Users have never had
more telephone options available for mobility. Wireless extension to cellular
enables a “follow-me” feature so that employees can have calls ring at both
their office and their cellular telephones.
In a VoIP network, employees can travel to any of the company’s locations,
plug in their IP-enabled laptop, begin work, and make and receive telephone
calls. Employees have, at their distant temporary location, all the rich features normally available to them at their home office location. The network
automatically identifies the user and applies that user’s profile information.
Employees can even direct their calls to any digital desktop telephone at the
temporary location. (The telephone does not even have to be IP-enabled.)
Managers no longer have to make costly and time-consuming accommodations for computer data and telephony connections for a coworker visiting
their location.
Enhanced Network Management
VoIP provides a foundation for comprehensive network management. As a
result, the ability for you to manage every bit and byte that runs over your
LAN and WAN has never been more enabled.
Likewise, you have at your disposal tools that find and fix network issues so
quickly that managers may rarely know that anything has happened. These
types of tools can support local and remote network monitoring. In dedicated
networks, near-perfect quality is provided. That’s not to say that problems
never occur, but with a VoIP network, your ability to detect symptoms and
make changes to your setup in advance of any problems is greatly enhanced.
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Better Utilization of Personnel
VoIP enables the realization of a converged network — data and telephony
traveling over the same network. Gone are the days when you needed two different skill sets to maintain your networks (one for telephony and one for
data). Although there are some skills unique to VoIP that traditional network
engineers don’t have, the underlying skills related to Ethernet networks and
IP protocols are the same. This allows your company to maximize the training of your people and, in many cases, reduce the number of personnel you
need in-house to support the network.
Productivity Applications
Many of the Web applications that previously ran exclusively over the
Internet will now run over your private VoIP-based communications network.
Your users can have their favorite Web page displayed on their VoIP telephone, or they can post special Web links on their telephone-based Web
page. Many Web-based applications are candidates for running on your VoIP
telephones.
Users can also add a video telephony solution, powered by IP video application software that enables a desktop PC or laptop to emulate an IP office
phone. The quality of the video and audio that runs on the company’s network, versus the Internet, is free from latency and jitter.
Better Bandwidth Utilization
Many people wrongly assume that when you add VoIP to an enterprise computer network, there won’t be enough bandwidth available to support the
change. The fact is that dedicated network transports supporting computer
data or traditional telephony systems are about 30 percent utilized. Even
though running both data and voice packets over the same network
increases overall traffic, you must look at how the IP-based traffic operates.
On the LAN side, fault isolation provided by switching equipment maintains a
steady mode of operation. If any chokepoints are identified, they can be
remedied almost immediately by changing connection points or doing what
the gurus call load balancing. But your IP-based management system will tell
you this before it even becomes a problem.
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On the WAN side, the load needs more consideration. You usually have more
than one site on the WAN side that may have users connecting to your site. In
addition, the cost and overall bandwidth capacity of WAN transports are
higher and recur monthly when compared to the LAN side. (Chapter 7 provides more detail on transport lines and services to dynamically allocate
bandwidth.)
For example, a T1 line has 24 channels. If you run traditional circuit-switched
calls over the T1, you can maintain 24 simultaneous calls. The beauty of VoIP
is that it is packetized, so the same 24 calls could run through just a fraction
of the T1’s overall capacity. As a result, you gain multiple times the bandwidth equivalent with VoIP when compared to circuit-switched telephony.
Reduced Costs
The cost reduction argument is compelling from a couple of perspectives.
The argument is never more persuasive, however, than it is for companies
that have a substantial volume of toll calls charged by the minute. VoIP can
reduce local charges; that’s a good thing. But VoIP also reduces or eliminates
most other classes of toll charges and greatly reduces your regulatory fees.
That is a great thing.
Depending on the number of locations your company has and how many toll
boundaries your current calling plan covers, you can save big bucks. This
savings is derived primarily from putting all your locations on VoIP and
bypassing most if not all of your toll charges. If your organization has significant international calling, the same benefit accrues, except that your company can save even more on toll and regulatory costs. (See Chapter 3 for a
breakdown on all five of the regulated carrier service categories.)
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Chapter 16
Ten Reasons Why You Should
Switch to VoIP at Home
In This Chapter
One carrier
One bill
Free local service
Reduced or eliminated toll service charges
Reduced international toll charges
More bandwidth
Enhanced Internet access
More ports to connect more phones and computers
Wireless (WiFi) broadband service in your home
Videoconferencing
A
re you are a consumer? Do you have or want Internet access at home? If
so, you may want to grab your calculator to add up all the things you
can get with VoIP while reducing your monthly recurring charges for telephone and Internet access. The reasons to switch to VoIP at home are
monthly savings, more services, piece of mind, and much more. In this chapter, I list the ten best reasons to make the switch.
One Carrier
How many times have you had to call your telephone carrier about one problem, your cable company about another problem, and your Internet access
provider about yet another problem? Wouldn’t it be nice to have just one
provider with one telephone number?
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One provider means that all your services are handled in the most expedient
way. And you don’t have to give up your POTS telephone service. You can
continue to run your POTS line as part of your broadband services; in fact,
you need to keep a POTS line if you’re using DSL for your broadband access.
Keeping your POTS line costs only about $25 per month, and your broadband
provider may make you an even better deal if you bundle your POTS line
together with your broadband Internet access. (See Chapter 6 for more
information.)
One Bill
Working with one carrier means that you get one bill each month. If you
have the DSL form of broadband, there is a surcharge for interstate carrier
services that amounts to about 20 percent of your POTS line bill (approximately $5). Want to know why you need to pay the surcharge, even if you are
using VoIP for your interstate calls? You’ll need to ask your state and federal
regulators; they are the ones who levy the surcharge. Unfortunately, we all
have to pay the surcharge even though we may not use or even have a POTS
line with interstate services on it.
Free Local Service
Even though you can’t get away from some regulatory surcharges (see the
preceding section), there is a way to offset the costs. Remember that you get
free unlimited access to the local calling area over your POTS line. Therefore,
if you use the POTS line for local calls and 911 calls, and VoIP for all other
calling, you have no recurring telephony charges. The monthly savings, in
most cases, more than offsets any surcharges you may need to pay.
Reduced or Eliminated
Toll Service Charges
If you rack up a lot of minutes outside your local calling area, VoIP saves you
a bundle of cash. (See Chapter 3 for the breakdown on different toll areas.)
You can use your VoIP service to make all your far, far away calls and pay
nothing for carrier charges.
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Reduced International Toll Charges
If you make lots of international calls, VoIP is a way to greatly reduce the perminute charges. The per-minute rates are reduced by a factor of ten or more
compared to traditional carrier charges, depending on the country that you
are calling. And you can call Canada for free with most VoIP plans.
More Bandwidth
If you are using a dialup modem to gain Internet access, you have one or
more traditional POTS lines for telephony service. (You need a POTS line to
hook up your modem.) The speed you get is excruciatingly slow compared to
broadband. The bandwidth with broadband service is many times greater
than with a dialup modem over a POTS line.
VoIP allows you to put all your telephony services on a single broadband
account. You can keep one POTS line (your broadband carrier may provide
one in your service bundle) for local calls and emergency purposes. You
simply plug your POTS phone into the adapter box the carrier provides.
Enhanced Internet Access
Sure you get more bandwidth with broadband, but you also gain access to
the entire Web. Everything from shopping on the Net and e-commerce to
research and e-mail are now at your fingertips. Stay connected with your
friends, your family, and your co-workers. Start a Web page; broadband
providers often give customers Web site space for free. (Perhaps you can
start a sideline business.)
Using VoIP, you can call people up wherever they may be located and talk as
long as you want. You can even have a conference call and do instant messaging over the computer while the conference is going on. Broadband opens a
whole new world for you; take advantage of it. Save money, gain services and
features, and enjoy the good life.
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More Ports to Connect More
Phones and Computers
Getting broadband service does more than add VoIP telephony into your picture. It puts a piece of equipment (the cable or DSL modem) on your premises
that lets you connect a multiport hub. Into this hub, you can plug several
other devices (such as multiple computers or game machines), all of which
can use the broadband line. One broadband line, many broadband services.
Wireless Broadband Service
in Your Home
With broadband Internet access, you can plug in a wireless hub that gives
you Internet and VoIP access without the need to run wires to your computer,
provided your computer has wireless capability. With such capability, there
is no longer a need to be tethered to the broadband box. If you have VoIP soft
phone software, you can use the computer to connect to your wireless network and make VoIP calls.
Videoconferencing
Full-motion videoconferencing is now possible over broadband lines. Broadband connections provide enough bandwidth to support all your VoIP calling,
your POTS line that runs over your broadband line, and your Internet access.
You can now add videoconferencing. You must purchase a video phone; the
price range is $100 to $300. The phone plugs into your broadband provider’s
equipment and uses the same protocol software that VoIP uses.
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Chapter 17
Ten VoIP Myths
In This Chapter
VoIP runs only on the Internet
POTS is cheaper
POTS is faster
The quality of service is suspect
VoIP-enabled phones are pricey
VoIP calls can be intercepted
911 calls may not work
VoIP is not ready for prime time
VoIP call features are expensive
You have to throw out all your old PBX telephones
I
f a new technology comes our way that brings with it the promise of
reducing or eliminating tremendous monthly costs, it can be expected that
supporters and stakeholders of the status quo are going to be concerned.
Consider the effect of the horseless carriage on commerce back in the early
twentieth century. As a new market for automobiles emerged, many counterarguments attempted to slow down its growth. But by 1910, there were an
estimated five hundred thousand cars and the industry was growing fast.
Stable owners, for example, became garage businesses. Saddle makers got
into the business of providing seats for the new cars. It didn’t take long for
society to adopt the automobile and adapt to its presence.
In a similar way, VoIP is disrupting the $300 billion telecommunications
market. VoIP has had to overcome many criticisms. This chapter addresses
what many experts consider to be the most prevalent myths about VoIP.
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VoIP Runs Only on the Internet
The most obvious myth about VoIP is that it runs only on the Internet. What
can we expect? The term Internet is built into VoIP. However, VoIP requires
and runs on the Internet protocol, but not necessarily on the Internet itself.
Internet protocol is not synonymous with the Internet. The Internet can be
accessed from all types of networks. The Internet is not a network type unto
itself; it is a network that is accessed by other networks and provides access
to other networks.
VoIP runs on any network that can run the Internet protocol. This includes
every network type known to man. (Chapter 4 discusses different network
types.) But just because VoIP can run the same protocols over any network
type, this does not mean VoIP runs the same way on all network types. The
protocols take care of packetizing the telephony voice signals, but the network type takes care of transporting those packets.
POTS Is Cheaper
You might be inclined to say that VoIP is much more expensive than its older
POTS counterpart. This comparison needs to be considered from several
perspectives.
First you should think about the chronology. As with any technology, early
pricing is never cheap. VoIP is about ten years old, and costs will continue to
decrease.
In addition, if you price VoIP simply by the cost of the top-of-the-line hardware, you may draw a false conclusion. For example, a videophone that runs
on VoIP is much more expensive than a low-end VoIP phone. But then again,
full-motion, real-time videoconferencing would cost a lot less than flying to a
distant location for a meeting.
Moreover, with VoIP, you don’t need an entirely separate telephony system as
you do with POTS-related telephony. VoIP substantially reduces the costs
inherent to the traditional telephony infrastructure. For a large, global, multilocation company, these costs can easily soar into the millions of dollars.
Finally, look beyond the hardware and consider the services delivered. Check
out your monthly telephone bill and try to understand exactly, line by line,
what you are paying for. For companies with one or more locations, this is
more complicated than it is for a consumer at home, but the process is the
same — and just as illuminating.
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POTS Is Faster
Some say POTS is faster than VoIP, but nothing could be further from the
truth. When you evaluate the speed of VoIP, you need to consider what network or network types you plan to use to run VoIP. Private, dedicated networks running VoIP have proven to be as fast or even faster than POTS in
supporting telephony. (See Chapter 7 for details.)
At the other end of the continuum, if you run VoIP as the very first Internet
hobbyists did back in 1995, you are going to get slow speeds. The decisive
factor here is that the public telephone network and the Internet sit between
the VoIP caller and receiver. Because both ends used dialup modems and
POTS lines for access, delay was inevitable.
The Quality of Service Is Suspect
The same arguments for speed can be made for QoS — specifically, what network type are we talking about? If, for example, you test the QoS of VoIP by
limiting the network type to the circuit-switched PSTN, POTS QoS wins handsdown. After all, the PSTN is tuned for optimal POTS quality.
The major requirement with VoIP is that the voice signals get packetized.
Consequently, the QoS with VoIP is determined by the network type. If you
run your VoIP network over dedicated digital lines, you find that the QoS is
just as good, if not better than, POTS QoS.
VoIP-Enabled Phones Are Pricey
Phones should be evaluated on the features and applications that they
deliver to the customer. Taking this approach, some POTS phones cost more
than VoIP phones, and vice versa. Moreover, many digital POTS phones work
with a VoIP network. Home users are also using older analog phones (with a
carrier-provided adapter) to run with VoIP over their broadband service.
With some VoIP phone types, you can do videoconferencing and Web surfing.
You can even transform your computer into a telephone at no cost. Can a
POTS telephone do all that?
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VoIP Calls Can Be Intercepted
Can VoIP telephony packets on a computer network be intercepted? Yes, they
can. What does it take to intercept VoIP packets? The same equipment and
access that it takes to intercept computer data packets. How feasible is it?
Not very.
After spending millions of dollars, the FBI developed a system called Carnivore
that is essentially built on earlier network management technology known as
a protocol analyzer. Basically, the device (a souped-up computer) plugs into a
network much like any other network addressable device. It sits there and
collects packets as they race by at the speed of light. The packets can then
be analyzed for threats and other information, or so the theory goes.
If you’re worried about such a device, keep the following in mind:
A government agency at least as powerful as the FBI is required to gain
access to a given network (excluding a trusted person doing it).
Access must be physical. The person must have a key to the telecommunications closet or access to an office where they can plug into the
network.
Access is achieved through the network operating system, so the person
must have a network access account.
Network managers today have a variety of techniques to protect their
packetized network traffic.
After all this, if you’re still concerned about VoIP packet interception and
security, consider the fact that anyone on the street can tap a POTS telephone line with a simple analog handset and a few wires. All they need is
physical access to your line. They do not have to be inside your company;
they can access the line from the street or in tunnels where the public access
lines run.
A solid argument can be made that a packetized network has more security
than the older circuit-switched network, particularly because you can also
implement data encryption for VoIP.
911 Calls May Not Work
Remember that the 911 network was designed to be supported by and make
full use of the circuit-switched network. VoIP uses packet-switched networks.
This is a colossal difference that needs to be clearly understood.
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At the same time, understand that most 911 calls are local calls to local emergency centers and law enforcement agencies. The major cost benefits associated with VoIP are not realized with local calls. Until the PSTN adopts VoIP
and packet-switching, you have to maintain local POTS telephony service for
local calls. Such lines can easily be used to make 911 calls directly. You don’t
have to lose your ability to make 911 calls just because you’re converting to
VoIP for all your toll calling.
On the consumer side, some low-end VoIP providers offer workarounds to
enable their customers to let go of their POTS services and be fully VoIP. This
is crazy. If you have an emergency, you want the fastest connection possible
to 911. Why would you want a service that routes your emergency call out to
the Internet, then to your VoIP provider, then back down to a POTS line, and
finally to the local 911 center? My recommendation to consumers is to use
DSL or cable modem for your Internet services; you can’t get VoIP otherwise.
Use the VoIP connection for all your toll calls and videoconferencing services. Plug a POTS telephone into your broadband VoIP adapter box and
maintain at least one POTS line for local service.
Lastly, do not be fooled into thinking that you can use your cell phone to call
911 and thereby eliminate the need for that speedier $25 per month POTS
line. Even a cell phone has a delay that is longer than what you would get
from a standard POTS line. When you are mobile and on the road, you have
no choice but to use your cell phone to contact 911. But in your home or
business, there is no reason not to have a direct connection to your local 911.
VoIP Is Not Ready for Prime Time
We are beyond considering whether VoIP is here to stay when we can point to
VoIP marketplace leaders (such as Avaya) that have a global market penetration base of more than a million companies and a Fortune 500 penetration of
more than 90 percent. The problems that plagued VoIP in the 1990s have been
overcome through technology or worked around with different technology.
VoIP is ready and working now.
VoIP Call Features Are Expensive
Because VoIP comes with all the usual call features you find in a traditional
POTS call plan — plus several more features that are unavailable in the POTS
world — many think that VoIP features add enormous costs to the monthly
bill.
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Adding features to your POTS line does add costs. But nothing could be further from reality when it comes to VoIP. VoIP operates with the TCP/IP protocols, which are used on the Web. As a result, VoIP features can be delivered
through the software without additional costs. They are free in all private
VoIP networks. In consumer VoIP service plans, the usual traditional features
are included with the cost of the plan.
You Have to Throw Out All
Your Old PBX Telephones
In the early days of VoIP, it quickly became apparent that the typical PBX
(non-VoIP) environment could not run VoIP in its then-present state.
Everything about the PBX was geared for circuit-switched telephony. The
PBX back then could support dedicated access lines, but only if the lines
were used to channelize the bandwidth for POTS line equivalencies. Because
the PBX controlled all digital phones that came with the PBX, the conclusion
back in the 1990s was that the PBX and its digital phones could not run VoIP.
Today, this potential drawback to VoIP has been wiped out. Through
upgrades to the PBX, including connecting the PBX to the LAN, all digital
phones that work with the PBX can now run VoIP. Companies today do not
need to worry about losing their investments in PBX technology.
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Chapter 18
Ten VoIP Manufacturers
In This Chapter
Avaya
Cisco
Siemens
Alcatel
Nortel
Mitel
NEC
3COM
Shoretel
Inter-Tel
T
he VoIP telephony market is populated by many competitors, and you
may need to choose among them to achieve the results you expect. To do
IP telephony and VoIP correctly, you need to work with a manufacturer who
can focus on using your existing resources to build a vibrant communications
network that enhances productivity. Converged telephony systems should
include all the traditional features you are familiar with (voice mail, call waiting, call forwarding, and so on) as well as many new exciting features that will
really knock your socks off (such as presence and follow me).
Customers need reliability, and you want to work with a manufacturer that
can deliver. If you are considering a converged network, you are probably
anxious to gain a simple-to-manage, business-driven architecture at a competitive price. To accomplish your goals, you need a proven leader in this marketplace. This chapter provides a list of the best of the best.
In 2004, the METAspectrum for Enterprise IP Telephony report ranked the top
IP telephony/VoIP companies. They ranked eight companies in the report
(Avaya, Cisco, Siemens, Alcatel, Nortel, Mitel, NEC, and 3COM); each is
included in this chapter. In addition, I rounded out the top ten with two other
companies (Shoretel and Inter-Tel) that fared well in Gartner’s 2004 report.
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Avaya
Basking Ridge, New Jersey
866-462-8292
www.avaya.com
Avaya makes a wide variety of communications systems and software, including voice, converged voice and data, customer relationship management,
messaging multiservice networking, and structured cabling products and services. According to Gartner, Avaya’s “status as a leader is in part based on
the architecture of its Avaya MultiVantage Communications Applications
suite, which emphasizes an extensive feature set, scalability, consistent user
interface, call processing power, and investment protection.”
Avaya has a rich customer base with more than a million customers worldwide. Their products and systems are running in more than 90 percent of
Fortune 500 companies. They are well known for their expertise in telephony
systems, network integration, and unified communications management.
Avaya is publicly held and has approximately fifteen thousand employees.
Cisco Systems
San Jose, California
800-553-6387
www.cisco.com
Cisco Systems makes networking solutions and network hardware and software, including converging voice and data products. According to Gartner,
Cisco has “leveraged its strength in large-scale LAN infrastructure markets to
win mind share among early adopters of converged networks. Its dealers are
extremely effective in selling IT organizations, where many traditional telephony vendors are gaining credibility.”
Cisco got its start in 1984 as a maker of networking products that could support proprietary and public data-networking protocols. For fiscal year 2004,
they generated more than $24 billion in revenue. They are well known for
their expertise in network routers and switches that provide the underlying
framework for diverse technology networks.
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Siemens
Munich, Germany
800-743-6367
www.siemens.com
Siemens is a publicly traded company that manufactures electronics and
equipment for a range of industries, including information and communications, automation and control, power generation, transportation, medical,
and lighting. They provide mobile communication and telephone communication systems to businesses and mobile phones and accessories to consumers. Siemens employs approximately seventy thousand people in the
United States and four-hundred-thirty thousand worldwide, with global sales
of more than $91 billion in 2004.
With respect to IP telephony, according to Gartner, “Siemens is focusing on
its installed base of Hicom 300 systems, offering transition paths to IP for
small, midsize and large businesses. However, migration gaps exist for users
of pre-9006 release software, which Siemens is addressing with financial
incentives designed to motivate customers to move to the HiPath 4000.”
Alcatel
Paris, France
800-252-2835
www.alcatel.com
Alactel provides communications solutions to telecommunication carriers,
Internet service providers, and enterprises. A publicly traded company with
fifty-six thousand employees worldwide, Alcatel’s focus is the delivery of
voice, data, and video applications to customers and employees.
Their OmniPCX communications platform enables a company to selectively
operate using traditional or IP telephony methods. The platform is capable of
supporting hybrid operations as well.
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Nortel
Brampton, Ontario, Canada
800-466-7835
www.nortel.com
Nortel was founded as Northern Electric in 1895. They make communications
technologies and infrastructure equipment for service providers and enterprise customers, employing approximately thirty-five thousand people. Their
revenues in 2004 were $9 billion.
According to Gartner, Nortel “has a broad IP telephony product portfolio that
offers new prospects. Their Multimedia Communication Server 5100 offers
presence management, collaboration tools, and a high degree of peer-to-peer
communications throughout an organization.”
Mitel
Kanata, Ontario, Canada
613-592-2122
www.mitel.com
Mitel is a maker of leading-edge business communications solutions for smalland medium-size organizations in more than fifty countries. Mitel is a privately held company employing more than two thousand people. They have
gained much recognition in the IP telephony market because they focus on
smaller companies with fewer than one hundred employees, and mediumsized companies with multiple locations that have fewer than two thousand
employees per location.
NEC
Tokyo, Japan
212-326-2400
www.nec.com
Founded in 1905, NEC makes products ranging from computer hardware and
software to wireless and IP telephony systems. For the fiscal year ending
March 2005, NEC recorded more than $624 million in revenue. They employ
about one-hundred-fifty thousand people worldwide.
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According to Gartner, “NEC’s portfolio offers various levels of converged IP
capabilities, a multitude of features, scalability, and investment protection.
Their platforms have an excellent reputation in the education, hospitality,
and healthcare vertical markets, with attributes that can attract other organizations with distributed campus environments . . . NEC Unified Solutions
strategy offers a menu of services that support the planning, implementation,
network readiness and ongoing service needs of IP telephony.”
3COM
Marlborough, Massachusetts
800-638-3266
www.3com.com
3COM has come a long way since the days when it was the world leader in
the manufacture of network interface cards (NIC). Today, they continue to
make networking and convergence products and services.
Founded in 1979, 3COM is a public company that employs approximately
nineteen hundred people worldwide. Their NBX product line has met with
great success in the small- to medium-sized marketplace. According to
Gartner, “3COM enjoys an excellent reputation among users of its products,
not only in IP telephony, but also data networking.”
Shoretel
Sunnyvale, California
800-425-9385
www.shoretel.com
Shoretel, founded in 1998, is a privately held company that is all about IP telephony. Their approach is to evaluate your network first before designing a
solution. The idea here is to determine how ready you are first, before taking
the step into VoIP convergence.
According to Gartner, Shoretel’s “product architecture gives organizations
distributed call control across multiple locations through an IP backbone
that supports the use of IP and analog telephones. This enables organizations
to implement a converged network at their own pace.”
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Inter-Tel
Tempe, Arizona
480-449-8900
www.inter-tel.com
Inter-Tel was founded in 1969 and has grown from providing simple telephone
systems for small businesses to providing sophisticated IP telephony and
VoIP-based system solutions that connect multisite companies. They employ
approximately nineteen hundred people.
According to Gartner, Inter-Tel’s Axxess product line “provides cost-effective
single-site solutions, as well as solutions for connecting multiple sites that
can form a larger, single-system image. The platform supports voice and data
convergence, networking, and call center and messaging applications.”
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Part V
Appendixes
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U
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In this part . . .
nlike the human body (where some folks consider
the appendix a useless part), the appendixes you
find here actually provide some great information.
When it comes time to look for a competent VoIP partner,
you’ll find the information in Appendix A quite helpful. It
ranks the top ten VoIP manufacturers, in order of revenue.
Are you befuddled by an unfamiliar word you’ve run
across? Relax — chances are good that you can find the
telecom or VoIP term you need in the glossary.
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Appendix A
VoIP Providers
T
he VoIP provider market has been growing in leaps and bounds since
AT&T announced in January 2004 that it was abandoning traditional carrier services as a way of doing business. What they were abandoning was the
way of doing business outlined in the Telecommunications Act of 1996. The
act defined ILECs, or Incumbent Local Exchange Carriers. ILECs (or simply
LECs) owned all the physical lines in a given area. Everyone else had to
go through ILEC to get any kind of access. The act also defined CLECs
(Competitive Local Exchange Carriers). CLECs leased access lines at wholesale from the ILECs.
The customers, of course, ultimately paid the bill. Either they could get lines
directly from an ILEC, or they could get them from a CLEC, who in turn got
them from the same ILEC. Many analysts would say that the act had a beneficial effect on the marketplace, particularly with interstate long-distance
costs. But in local markets, ILECs dominated because, no matter what, they
had a piece of the action. And because ILEC controlled the actual physical
installation of the access lines, any shortcomings in their service had a negative impact on the CLEC’s customers.
CLECs, of which AT&T was one, are now using packet-switching protocols to
provide VoIP services over their existing networks, rather than leasing POTS
lines from ILECs at wholesale pricing. ILECs are now in a position where they
could lose significant revenue. The fewer POTS lines installed by ILECs, the
less revenue they have from wireline services.
For CLECs, the way is clear. Should they use circuit-switched POTS services
at wholesale pricing, which they then mark up for their customers? Or do
they use packet-switching services with VoIP, at a fraction of the wholesale
price, using their own existing networks and offering their customers a much
better value?
It is no small wonder why in the past six months the ILEC powers-that-be
have sought to acquire the largest CLECs that offer VoIP. As a result of these
changes in the marketplace, many argue that the corporate and consumer
buying public will lose some of the choices they had when the lines between
ILECs and CLECs were more clear. I disagree. With the inception of VoIP and
the maturation of wireless, the choices for telephony and video services are
increasing.
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As a potential consumer, you need to know who is offering VoIP carrier services and who is offering the leased access lines you need to build or
upgrade your VoIP network. Table A-1 lists the top ten VoIP carrier providers,
ranked in order of gross revenue.
Table A-1
Top VoIP Carrier Providers
Rank
Company
ILEC/CLEC
Revenue Profit
Employees
1
Verizon Communications
ILEC
$72B
$8B
212K
2
SBC Communications
ILEC
$41B
$6B
163K
3
AT&T
CLEC
$31B
($6B)
48K
4
Sprint
ILEC
$27B
($1B)
60K
5
BellSouth
ILEC
$23B
$5B
63K
6
MCI
CLEC
$23B
($4B)
40K
7
Comcast
CLEC
$20B
$1B
74K
8
Qwest Communications
ILEC
$14B
($2B)
41K
9
Nextel Communications
CLEC
$13B
$3B
19K
10
DIRECTV Group
CLEC
$12B
($2B)
12K
The first six carriers and number eight — Verizon, SBC, AT&T, Sprint,
BellSouth, MCI, and Qwest — are able to lease or release any of the transports or transport services covered in Chapters 4 through 7. For example, to
set up or upgrade a private dedicated network to run VoIP (see Chapter 7),
your company most likely would work with one carrier to acquire the transports at each of your locations. The carriers can also offer VoIP services.
The seventh carrier, Comcast, is also the country’s largest cable provider.
The cable industry is not regulated, so the rules of the Telecommunication
Act of 1996 do not apply to their cable services in the same way. They are
permitted to be CLECs for the purpose of offering other services. For
instance, if they lease cable service to your home, you may also get POTS service over that cable. For them to offer you POTS, they have to have transports into the PSTN. They can also lease VoIP services to you that run over
your cable line.
The ninth carrier, Nextel Communications, is a cellular company, and the
tenth, DIRECTV Group, is a satellite carrier company that offers broadband
DSL to the consumer market.
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The best place to start exploring for more information on any of the top ten is
to visit their Web sites. Most of the sites have contact information and more
details about their services:
www.verizon.com
www.sbc.com
www.att.com
www.sprint.com
www.bellsouth.com
www.mci.com
www.comcast.com
www.qwest.com
www.nextel.com
www.directv.com
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Appendix B
Glossary
Numbers
911: The standard number for emergency telephone calls made over the
public switched telephone network (PSTN) in North America. See also E911.
A
access: A generalized term referring to the physical means (such as POTS line
or T1 line) through which a carrier company provides telecommunications
services to a customer.
access cost: The one-time installation charges plus the recurring costs for
access to one or more network services, such as Internet access.
add-on charges: Monthly charges beyond access costs. Add-on charges are
mandated by the government and administered by the carrier. These types of
add-on charges are also referred to as regulatory fees.
analog: A method of representing voice signals through a variation in the
amplitude, frequency, or phase of an electrical signal. POTS telephone lines
originally used (and in many areas continue to use) analog transmission to
gain access to the public telephone network.
application layer: The top layer of the TCP/IP model. The application layer is
where a packet is first encoded or last decoded. For the sender, it is the layer
at which an application first presents information to the protocols to be packetized. For the receiver, it is the layer at which information is finally depacketized and ready for use by the application.
area code: A three-digit code that represents a specific geographic calling
area in North America. The area code is dialed first in the sequence of calling
any telephone number. Some areas, depending on population size, do not
require an area code for calls made within the local regional calling area.
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asymmetric transmission: When the upstream and downstream transmission
rates are different; for example, the upload rate may be 256 Kbps and the
download rate 1.536 Mbps. Most consumer broadband networks use asymmetric transmission.
B
B channel: A bandwidth unit employed by the integrated services digital network (ISDN). An ISDN B channel delivers 64 Kbps of digital bandwidth over
the public switched telephone network (PSTN).
bandwidth: A measure of the amount of data that can be transmitted during
a set period of time. In most cases, the terms bandwidth and speed are used
synonymously. The bandwidth of a communications channel is often
expressed in Kbps (kilobits per second) or Mbps (megabits per second).
bandwidth allocation: Digital bandwidth can be subdivided and allocated
based on channels. For example, a T1 line with an aggregate bandwidth of
1.536 Mbps can allocate eight 64 Kbps channels to the telephone system,
eight channels to the computer data network, and eight channels to a videoconferencing system. All 24 channels can be used in a dynamic allocation
pool. A pool assigns channels as needed for the life of the telephone or videoconference call and returns the channels to the pool when the call or session
is over.
basic rate interface: BRI. The consumer-grade level of ISDN service. A BRI
consists of two B channels of 64 Kbps per channel. The two channels can be
used in aggregate, or each channel can be dedicated to a specific application.
A BRI also includes a D channel, which is a 16 Kbps channel used strictly by
the carrier to manage services over the BRI line.
BRI: Basic rate interface. The consumer-grade level of ISDN service. A BRI
consists of two B channels of 64 Kbps per channel. The two channels can be
used in aggregate, or each channel can be dedicated to a specific application.
A BRI also includes a D channel, which is a 16 Kbps channel used strictly by
the carrier to manage services over the BRI line.
broadband: In general usage, a communications channel capable of transmission speeds equal to or greater than 256 Kbps. There is not currently a clear
definition on the maximum speed for broadband. It also describes two popular services (DSL and cable modem) that connect consumers and small businesses to the Internet.
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C
cable modem: A popular form of broadband service that runs over the consumer’s cable television network transport line to offer access to the
Internet.
call control: A PSTN management technology that establishes a connection,
keeps the call up, and tears the call down when the parties hang up. Call control provides an automated means to track and manage call-related information for billing and maintenance.
call forwarding: A calling feature that enables the telephone customer to forward inbound telephone calls to another telephone number before ringing at
the original destination number.
call transfer: A calling feature that enables the telephone customer to transfer an in-process telephone call to another telephone number.
calling feature: Additional uses or applications of the telephone, the telephone line, or the network that carries the telephone call. Voice mail, call forwarding, and call transfer are examples of traditional calling features. VoIP
telephony has all the traditional calling features plus a new generation of features that use the telephone and the network, such as presence, vemail, and
displaying a Web page on your telephone screen.
carrier: The company responsible for the transport lines used to provide
communications services. Carriers lease transport lines to customers and
often provide the services that operate over those lines, such as voice, data,
and video transmission.
carrier services company: See carrier.
carrier services provider: See carrier.
carrier services infrastructure: CSI. Refers to a subset of five network types
available in the telecommunications domain. Network transport lines for a
particular CSI are available by leasing through carriers.
Centrex: Central Office Exchange. Centrex uses POTS lines to provide PBXlike services and features to customers.
channelization: The capacity for subdividing and allocating bandwidth channels in a dedicated transport line. For example, a DS3 transport line provides
672 channels of 64 Kbps each. Channelization allows those channels to be
independently utilized for different communication purposes.
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circuit-switched: The traditional method of transporting a telephone call
over the PSTN. Multiple devices known as switches are employed by the carriers to form paths, or circuits, over which telephone calls may be carried
between a caller and a receiver.
CLEC: Competitive local exchange carrier. Before the Telecommunications
Act of 1996, the term interexchange carrier (IXC) was more commonly used.
CLECs are the carriers that sought to lease transport lines and services to
customers within an area where the Local Exchange Carriers (LECs) owned
all the lines. The 1996 law mandated that the LECs (now ILECs) must lease
their local lines at wholesale prices to CLECs. In return, the regulation
promised to open the long-distance markets to ILECs. See also ILEC.
competitive local exchange carrier: CLEC. Before the Telecommunications
Act of 1996, the term interexchange carrier (IXC) was more commonly used.
CLECs are the carriers that sought to lease transport lines and services to
customers within an area where the Local Exchange Carriers (LECs) owned
all the lines. The 1996 law mandated that the LECs (now ILECs) must lease
their local lines at wholesale prices to CLECs. In return, the regulation
promised to open the long-distance markets to ILECs. See also ILEC.
compression: In digital networking, a method of reducing the bit length of
network traffic (that is, packets) to enable more efficient data transmission.
convergence: The integration of switched and dedicated networks to support similar applications. For example, using VoIP on the corporate computer
network to place a call on the traditional public telephone network.
CSI: Carrier service infrastructure. CSI refers to a subset of five network types
available in the telecommunications domain. Network transport lines for a
particular CSI are available by leasing through carriers.
D
D channel: A channel used by ISDN transport services. A BRI includes a 16Kbps D channel, and a PRI includes a 64-Kbps D channel. These channels are
used strictly by the carriers to manage services over the customer’s ISDN
line.
dedicated access: A classification of access using a private network transport
(T1, T3, or OC3 line) through which a carrier provides ultra-high bandwidth
telecommunications services to an individual customer.
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dedicated network: A network dedicated to a single customer and implemented through the use of dedicated access lines.
delay: The total time it takes for a signal to travel from the source to the
destination.
digital: A fast, efficient method of representing voice signals through high
and low pulses. Since the inception of digital networking techniques, many
newer, faster, and more precise methods of networking have become
available.
digital service: DS. The initial form of the digital service CSI through which
the first digital, private, dedicated transport lines (such as DS1 and DS3 lines)
were installed beginning in 1964.
digital subscriber line: DSL. A popular form of broadband service which runs
over a POTS line to provide Internet access. In most cases, DSL service
requires the consumer to have an existing POTS line service.
digital telephony: Started first as a method for carriers to aggregate and
transport POTS telephone calls on the carrier’s network using DS-type transport lines. This same technology would later be redeveloped into privately
owned telephone systems (PBX) that would be owned and operated by
customers.
DS: See digital service.
DS0: One 64-Kbps channel of digital bandwidth on the DS network.
DS1: The standard for 24 DS0 channels having an aggregate bandwidth of
1.536 Mbps. A DS1 line is also known as a T1 line.
DS3: The standard for 672 DS0 channels having an aggregate bandwidth of
45 Mbps. A DS3 line is also known as a T3 line.
DSL: Digital subscriber line. A popular form of broadband service which runs
over a POTS line to provide Internet access. In most cases, DSL service
requires the consumer to have an existing POTS line service.
DWDM: Dense wave division multiplexing. A newer network transport service that aggregates network traffic for transmission in the terabit bandwidth
ranges.
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E
E911: An enhanced form of the standard number for emergency telephone
calls made over the traditional PSTN in North America. E911 automatically
provides, to the 911 call center agent, the caller’s contact information, including name, address, and telephone number. The E911 system also has the
capability to provide contact information to first responders, including
police, fire, and paramedic personnel within the caller’s local calling area.
encapsulation: A process whereby network traffic (data, voice, or video) is
formatted according to the requirements of the network protocol (Ethernet
or TCP/IP) being used to transport the traffic. The LAN encapsulates traffic
into MAC frames. The WAN encapsulates traffic into packets.
encryption: A process that secures network traffic from unauthorized access.
By using secure procedures or secure software keys known only to authorized users, the encrypted network traffic can be accessed.
Ethernet: The oldest and most popular protocol used for establishing data
networks. Ethernet is used in more than 98 percent of corporate America for
LAN networking. Ethernet is increasingly being used as a MAN backbone
standard. The fundamentals of Ethernet are modified slightly to support WiFi
and WiMax, popular forms of wireless Ethernet. See also IEEE 802.3, IEEE
802.11, and IEEE 802.16.
extensibility: An attribute of networks that allows them to be enlarged or
enhanced without the need to change basic network characteristics.
F
feature: Additional uses or applications of the telephone, the telephone line,
or the network that carries the telephone call. Voice mail, call forwarding,
and call transfer are examples of traditional calling features. VoIP telephony
has all the traditional calling features plus a new generation of features that
use the telephone and the network, such as presence, vemail, and displaying
a Web page on your telephone screen.
feature cost: Charges associated with the implementation of calling features.
In traditional POTS telephony, calling features have a cost associated with
them, typically in the form of additional monthly charges.
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fiber optic: A physical cable medium used in most networks for all outside
segments of the network’s physical layer.
firewall: Software or hardware that limits access to a data network. Some
firewall systems also provide network management functions.
frame: On the LAN side of the network, bit signal traffic is encapsulated and
transported inside MAC frames. See also MAC.
G
gateway: A network device used to provide access between different types of
networks. For instance, a gateway may provide access into an external network such as the PSTN, the Internet, or a private WAN. A PSTN gateway has a
LAN interface on the inside and a PRI access transport line on the outside. It
translates IP telephony frames from the LAN into circuit-switched POTS traffic for the PSTN and vice versa.
H
hard phone: A VoIP-enabled telephone that has an RJ-45 LAN interface port
to connect it to the Ethernet LAN. VoIP telephones today come in all shapes
and sizes.
HFC: Hybrid fiber-coaxial. The CSI that supports cable television, broadband
services, and VoIP telephony through cable modem and POTS telephony
through a POTS telephone and adapter.
hop: On the Internet, a hop represents a single, intermediary step in the path
of a network transmission from the source to the destination.
hosted VoIP: A managed VoIP telephony service similar in concept to the traditional Centrex model. Synonymous with IP Centrex, VoIP Centrex, hosted telephony, and hosted VoIP telephony.
hybrid fiber-coaxial: HFC. The CSI that supports cable television, broadband
services, and VoIP telephony through cable modem and POTS telephony
through a POTS telephone and adapter.
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I
IEEE: Institute for Electrical and Electronic Engineers. The main standardscertifying body for protocols such as Ethernet (IEEE 802.3), WiFi (IEEE
802.11), and WiMax (IEEE 802.16).
IEEE 802.3: The standard defining early forms of the Ethernet networking
protocol.
IEEE 802.11: The standard defining early forms of wireless Ethernet (WiFi).
IEEE 802.16: The standard defining a form of WiFi known as WiMax designed
to handle higher bandwidths over greater distances.
ILEC: Incumbent local exchange carrier. Introduced with the
Telecommunications Act of 1996. ILEC is intended to identify the carrier who
owns the traditional, regulated cabling infrastructure in any given LATA. See
also CLEC.
in-state toll: One of four traditional regulated toll carrier service categories,
also known as intrastate.
integrated services digital network: ISDN. A group of digital transport services that use the circuit-switched PSTN. ISDN transports are capable of integrating data, voice, and video applications, but run slower than other
transports available today.
interexchange carrier: IXC. Dominated the long-distance carrier services
marketplace before the implementation of the Telecommunications Act
of 1996.
international: One of four traditional regulated toll carrier service categories.
Considered to be the most highly regulated of all toll services.
Internet: A global, publicly accessible, nonregulated, nonsecure network
accessible from all five CSIs.
Internet service provider: ISP. A company that provides Internet access to
consumers and companies. Larger and more versatile ISPs offer Internet
access using a variety of network transport options.
interstate toll: One of four traditional regulated toll carrier service categories, also known as long distance.
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intralata toll: One of four traditional regulated toll carrier service categories,
also known as local toll or regional toll. Refers to calls in which the caller and
receiver are in the same local access and transport area (LATA).
intranet: A private network based on the same protocols used on the larger
public Internet. Those outside the network can gain access to a corporate
intranet through a firewall or gateway, if the network is configured to allow
such access.
intrastate toll: One of four traditional regulated toll carrier service categories, also known as in-state toll.
IP: Internet Protocol. One of two major protocols used in the TCP/IP family of
protocols. The IP protocol is one of the protocols used to implement the
Internet.
IP address: An address comprised of four numbers, each ranging from 0 to
255, and normally expressed with each number separated by a period (such
as 192.168.2.100). IP addresses are used to route network traffic from sender
to receiver. The IP address is a major component field of a VoIP packet and is
used to map the VoIP telephone call to a specific telephone number. In a VoIP
telephony call, both source and destination (caller and receiver) addresses
are used to establish and maintain the VoIP call.
IP Centrex: A managed VoIP telephony service similar in concept to the traditional Centrex model. Synonymous with VoIP Centrex, hosted VoIP, hosted telephony, and hosted VoIP telephony.
IP soft phone: Software that enables a computer to function as a VoIP telephone, including an on-screen dialing pad for point-and-click dialing.
IP telephony: IPT. A technology that allows traditional voice calls to be
carried as data over a local area network. IPT is technically VoIP on a LAN
(and VoIP is IPT outside the LAN).
IPT: IP telephony. A technology that allows traditional voice calls to be
carried as data over a local area network. IPT is technically VoIP on a LAN
(and VoIP is IPT outside the LAN).
ISDN: Integrated services digital network. A group of digital transport services that use the circuit-switched PSTN. ISDN transports are capable of integrating data, voice, and video applications, but run slower than other
transports available today.
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ISP: Internet service provider. A company that provides Internet access to
consumers and companies. Larger and more versatile ISPs offer Internet
access using a variety of network transport options.
IXC: Interexchange carrier. IXCs dominated the long-distance carrier services
marketplace before the implementation of the Telecommunications Act
of 1996.
K
key telephone system: KTS. An internal phone system typically used by
smaller companies so they can take advantage of calling features and minimize the number of POTS lines necessary. A KTS is often referred to as a key
station or simply a key system.
KTS: See key telephone system.
L
LAN: Local area network. A data network limited to a small geographic area.
A LAN can be as small as a couple of devices connected on the same network
or as large as a campuswide installation with numerous buildings and thousands of addressable devices on the same network.
last mile: The physical line installed by the carrier to support the connection
between the customer’s premise and the carrier’s point-of-presence. The
local loop, sometimes referred to as the local loop, is used to enable access
to one or more networks and carrier services.
LATA: Local access and transport area. An arbitrary geographical regulatory
designation established by ILECs.
LEC: See ILEC.
line: A physical channel (includes wireless channels) or aggregate of contiguous channels that supports the transmission of electrical, optical, or telemetric data, voice, or video bit-level signaling. Also known as transport.
line cost: The initial start-up installation charges, plus the recurring costs, for
a network transport line to connect the customer’s premise to the carrier’s
point-of-presence.
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local access and transport area: LATA. An arbitrary geographical regulatory
designation established by ILECs.
local area network: LAN. A data network limited to a small geographic area.
A LAN can be as small as a couple of devices connected on the same network
or as large as a campuswide installation with numerous buildings and thousands of addressable devices on the same network.
local calling area: A regulated calling area usually covering the immediate
surrounding geographical area. Distinguishes local calling from all four toll
related calling service categories.
local exchange carrier: See ILEC.
local loop: The physical line installed by the carrier to support the connection between the customer’s premise and the carrier’s point-of-presence. The
local loop, sometimes referred to as the last mile, is used to enable access to
one or more networks and carrier services.
local toll: One of four traditional regulated toll carrier service categories,
also known as intralata toll or regional toll. Refers to calls in which the caller
and receiver are in the same local access and transport area (LATA).
long distance: One of four traditional regulated toll carrier service categories, also known as interstate toll.
M
MAC: (1) In network terminology, an acronym for media access control. The
part of the network interface that controls physical access to the LAN
through the MAC address. (2) In telephone system administration terminology, an acronym for moves, adds, and changes. MAC describes the most
common type of maintenance necessary in traditional telephone systems.
MAC address: An address that uniquely identifies a network device. The MAC
address is typically represented in hexadecimal notation, as in 00-04-23-5890-6E.
MAC frame: The format specified for encapsulating bit signals in the IEEE
802.3, IEEE 802.11, and IEEE 802.16 standards.
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MAN: Metropolitan area network. A type of network designed to cover a large
geographical area, such as a city.
media access control: MAC. The part of the network interface that controls
physical access to the LAN through the MAC address.
metropolitan area network: MAN. A type of network designed to cover a
large geographical area, such as a city.
monthly recurring cost: MRC. In the regulated communications industry,
charges that are assessed monthly for access, calling features, tolls, and regulatory fees.
moves, adds, and changes: MAC. The most common type of maintenance
necessary in traditional telephone systems.
MRC: Monthly recurring cost. In the regulated communications industry,
charges that are assessed monthly for access, calling features, tolls, and regulatory fees.
N
network feature: Calling features provided in a VoIP network. For example,
presence, Web surfing, and vemail are network features.
network interface card: NIC. Provides the network device, such as a computer or a VoIP telephone, with its MAC address and the means for connecting to the LAN.
network management system: NMS. Provides bit-level metrics and statistics
on network utilization, error rates, bottlenecks, security breeches, frame
faults, and faulty packets.
network timing protocol: NTP. Enables timing so that the composure of the
voice signals (high and low pulses that make up the voice pattern) being sent
is the same relative composure of the voice signals received. Unnecessary
delay or not enough time allowance causes variation and possibly distortion.
NIC: Network interface card. Provides the network device, such as a computer or a VoIP telephone, with its MAC address and the means for connecting to the LAN.
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NMS: Network management system. Provides bit-level metrics and statistics
on network utilization, error rates, bottlenecks, security breeches, frame
faults, and faulty packets.
NPA: Numbering plan area. Usually corresponds to the area code in the traditional POTS-PSTN telephone numbering system.
NTP: Network timing protocol. Enables timing so that the composure of the
voice signals (high and low pulses that make up the voice pattern) being sent
is the same relative composure of the voice signals received. Unnecessary
delay or not enough time allowance causes variation and possibly distortion.
number exchange: NXX. Usually corresponds to the prefix in the traditional
POTS-PSTN telephone numbering system.
numbering plan area: NPA. Usually corresponds to the area code in the traditional POTS-PSTN telephone numbering system.
NXX: Number exchange. Usually corresponds to the prefix in the traditional
POTS-PSTN telephone numbering system.
O
OC network: Optical carrier network. One of the five CSIs, the OC network is
implemented through the use of fiber-optic cabling and extremely high bandwidth data transfers.
OC12: An OC CSI transport that provides 622 Mbps of digital bandwidth.
OC3: An OC CSI transport that provides 155 Mbps of digital bandwidth.
off-net: In VoIP telephony, refers to calls that must be carried on another network (usually the PSTN) external to the VoIP network.
on-net: In VoIP telephony, refers to calls carried on the customer’s network.
optical carrier network: OC network. One of the five CSIs, the OC network is
implemented through the use of fiber-optic cabling and extremely high bandwidth data transfers.
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P
packet: On the WAN side of the network, bit-signal traffic is encapsulated and
transported inside packets. A packet can be best visualized as an electronic
envelope for transmitting data.
packet-switched: Packet-switched networks such as a VoIP network use the
addressing information contained in the packet to determine the route the
packet takes to its destination.
PBX: Private branch exchange. A telephone system used by larger companies
to manage POTS-PSTN telephony services and calling features.
physical layer: In the TCP/IP networking model, the physical layer is where
all packets are converted to electro or electro-optical signals to be carried
over the local or external network.
plain old telephone service: POTS. The most basic form of circuit-switched
telephone service.
point of presence: POP. A brick-and-mortar facility where a CLEC has established an operating presence in the local carrier exchange marketplace. In a
given LATA, many CLECs may have one or more POPs. Under regulations
introduced in 1996, the CLECs can acquire transport lines and access to connect their customer’s premises through the ILEC’s network to the CLEC’s
POP(s).
POP: Point of presence. A brick-and-mortar facility where a CLEC has established an operating presence in the local carrier exchange marketplace. In a
given LATA, many CLECs may have one or more POPs. Under regulations
introduced in 1996, the CLECs can acquire transport lines and access to connect their customer’s premises through the ILEC’s network to the CLEC’s
POP(s).
POTS: Plain old telephone service. The most basic form of circuit-switched
telephone service.
POTS line: The physical line that supports plain old telephone service
(POTS).
POTS telephone: The telephone that supports plain old telephone service
(POTS).
presence: One of the network features available with VoIP telephony services
through a light indicator or software icon. If the presence light is on, the
person is available on the network.
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PRI: Primary rate interface. An ISDN transport line providing 23 B channels
and one 64-Kbps D channel. The PRI has gained renewed popularity with the
advent of VoIP networks that use gateways with PRIs to support off-net calls
to the PSTN.
primary rate interface: PRI. An ISDN transport line providing 23 B channels
and one 64-Kbps D channel. The PRI has gained renewed popularity with the
advent of VoIP networks that use gateways with PRIs to support off-net calls
to the PSTN.
private branch exchange: PBX. A telephone system used by larger companies to manage POTS-PSTN telephony services and calling features.
PSTN: Public switched telephone network. The oldest and largest communications network in the world.
PSTN baseline: Because of its history and high quality of service, VoIP technology uses the PSTN as a baseline for developing and designing telephony
networks based on VoIP.
PSTN gateway: A gateway is a network device used to provide access
between different types of networks. For instance, a gateway may provide
access into an external network such as the PSTN, the Internet, or a private
WAN. A PSTN gateway has a LAN interface on the inside and a PRI access
transport line on the outside. It translates IP telephony frames from the LAN
into circuit-switched POTS traffic for the PSTN and vice versa.
public switched telephone network: PSTN. The oldest and largest communications network in the world.
R
real-time transport control protocol: RTCP. Operates at the application layer
of the TCP/IP model to monitor voice signal delivery and provide minimal
control functions to ensure delivery of packets.
real-time transport protocol: RTP. Operates at the application layer of the
TCP/IP model to provide end-to-end network transport functions for digital
voice signals encapsulated in the VoIP packet.
regional toll: One of four traditional regulated toll carrier service categories,
also known as intralata toll or local toll. Refers to calls in which the caller and
receiver are in the same local access and transport area (LATA).
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regulatory fees: Add-on charges to telephone bills using POTS-PSTN access
lines. Whether you use the services or not, having the POTS access line is
sufficient for being charged most regulatory fees.
router: A network device that connects the LAN to one or more external networks. The router translates frame traffic on the LAN into packetized traffic
for the WAN or the Internet.
RTCP: Real-time transport control protocol. Operates at the application layer
of the TCP/IP model to monitor voice signal delivery and provide minimal
control functions to ensure delivery of packets.
RTP: Real-time transport protocol. Operates at the application layer of the
TCP/IP model to provide end-to-end network transport functions for digital
voice signals encapsulated in the VoIP packet.
S
scalability: An attribute of networks that allows them to increase capacity
without the need to change basic network characteristics.
session initiation protocol: SIP. An interoperable protocol in the TCP/IP
family of protocols. SIP uses text formatting to set up and maintain communication sessions with various endpoints. These endpoints can include cell
phones, desk phones, PC clients, and PDAs. SIP permits these various endpoints to operate as a single system.
signaling system: SS7. A trunking protocol used in the PSTN to control POTS
telephone calls including channel setup, session maintenance, and call tear
down.
SIP: Session initiation protocol. An interoperable protocol in the TCP/IP
family of protocols. SIP uses text formatting to set up and maintain communication sessions with various endpoints. These endpoints can include cell
phones, desk phones, PC clients, and PDAs. SIP permits these various endpoints to operate as a single system.
soft phone: Software that enables a computer to function as a VoIP telephone, including an on-screen dialing pad for point-and-click dialing.
splitter: A device that terminates the cable from the cable company and
divides the signal carried over that cable into component services, such as
cable television, Internet access, VoIP telephony, and POTS telephony.
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SS7: Signaling system 7. A trunking protocol used in the PSTN to control
POTS telephone calls including channel setup, session maintenance, and call
tear down.
symmetric transmission: When the upstream and downstream transmission
rates on a broadband connection are the same.
T
T1: The standard for 24 DS0 channels having an aggregate bandwidth of 1.536
Mbps. A T1 line is also commonly known as a DS1 line.
T3: The standard for 672 DS0 channels having an aggregate bandwidth of 45
Mbps. A T3 line is also known as a DS3 line.
TCP: Transmission control protocol. One of two major protocols used in the
TCP/IP family of protocols. In VoIP telephony and videoconferencing calls,
the TCP protocol is replaced by its sister protocol, UDP.
TCP/IP: Transmission control protocol/Internet protocol. The family of interoperable protocols consisting of more than one-hundred-twenty protocols,
each of which performs one or more services to support various network
applications. The early developers of the Internet agreed upon the name
TCP/IP because, at the time, TCP and IP were considered the two most important protocols for any network connection.
Telecommunications Act of 1996: Extensive legislation that marked a turning
point in the efforts to promote competition in the former local and longdistance carrier services marketplace.
toll bypass: A term that concisely describes how VoIP telephony service completely sidesteps the regulated, circuit-switched PSTN and all its associated
toll usage charges by carrying telephone calls over private, packet-switched
networks.
toll charges: Recurring, metered, per-minute charges assessed on any POTSPSTN call that terminates in any of the four toll service category zones.
transmission control protocol: TCP. One of two major protocols used in the
TCP/IP family of protocols. In VoIP telephony and videoconferencing calls,
the TCP protocol is replaced by its sister protocol, UDP.
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transmission control protocol/Internet protocol: TCP/IP. The family of interoperable protocols consisting of more than one-hundred-twenty protocols,
each of which performs one or more services to support various network
applications. The early developers of the Internet agreed upon the name
TCP/IP because, at the time, TCP and IP were considered the two most important protocols for any network connection.
transport: A physical channel (includes wireless channels) or aggregate of
contiguous channels that supports the transmission of electrical, optical, or
telemetric data, voice, or video bit-level signaling. In common usage, transport
is often used synonymously with line.
transport layer: In the TCP/IP model of networking, the layer at which the
end-to-end transport of frames or packets occurs.
transport service: An application supporting the transmission of data, voice,
or video signals, or any combination of these signals, over a given transport,
according to a specific protocol or set of protocols.
triple play: Refers to the capability to integrate data, voice, and video applications on the same transport.
U
UDP: User datagram protocol, an encoding protocol implemented at the
transport layer of VoIP telephony and videoconferencing calls.
V
vemail: A network feature supported with VoIP telephony in which the user
can elect to hear their e-mail or print a hardcopy of their voice mail.
virtual private network: VPN. A network that interconnects multiple local
area networks (LANs) by using the Internet as a WAN transport or backbone.
voice mail: A popular calling feature that allows callers to leave a message in
the event that the called party can’t answer the call. Voice mail comes at no
additional cost with VoIP telephony.
voice over Internet protocol: VoIP. A network service that supports carrying
telephone calls over packetized networks. VoIP reduces substantially or eliminates the need for a separate, circuit-switched telephone network to carry
telephone calls.
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VoIP: Voice over Internet protocol. A network service that supports carrying
telephone calls over packetized networks. VoIP reduces substantially or eliminates the need for a separate, circuit-switched telephone network to carry
telephone calls.
VoIP adapter box: In broadband services, an adapter box is provided by the
carrier to enable VoIP customers to plug in a VoIP telephone or to continue to
use their existing POTS telephones, if desired.
VoIP Centrex: A managed VoIP telephony service similar in concept to the
traditional Centrex model. Synonymous with IP Centrex, hosted telephony,
hosted VoIP telephony, and hosted VoIP.
VPN: Virtual private network. A network that interconnects multiple local
area networks (LANs) by using the Internet as a WAN transport or backbone.
W
WAN: Wide area network. A larger network that connects two or more LANs
using dedicated transport lines.
WAP: Wireless access point. A device that enables network devices with wireless interface cards to connect to the network. Wireless users (WiFi or
WiMax) must be within the specified distance range limits. The WAP has one
cable, which is used to connect it to the larger hardwired network.
WEC: Wireless extension to cellular. A technology that permits a user to have
their desk phone ring on their cellular telephone and not be charged as a cellular call. Essentially, the company’s network is used to forward the call as if
the cell phone were another station on the network.
wide area network: WAN. A larger network that connects two or more LANs
using dedicated transport lines.
WiFi: Wireless fidelity. Wireless networking as specified in the IEEE 802.11
series of standards.
WiMax: Worldwide interoperability for microwave access. Wireless networking as defined in the IEEE 802.16 standard. WiMax is demonstrating speeds in
excess of 70 Mbps (more than six times the maximum speed of WiFi) over
much greater distances (up to 30 miles).
257
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wireless access point: WAP. A device that enables network devices with wireless interface cards to connect to the network. Wireless users (WiFi or
WiMax) must be within the specified distance range limits. The WAP has one
cable, which is used to connect it to the larger hardwired network.
wireless extension to cellular: WEC. A technology that permits a user to
have their desk phone ring on their cellular telephone and not be charged as
a cellular call. Essentially, the company’s network is used to forward the call
as if the cell phone were another station on the network.
wireless fidelity: WiFi. Wireless networking as specified in the IEEE 802.11
series of standards.
worldwide Interoperability for microwave access: WiMax. Wireless networking as defined in the IEEE 802.16 standard. WiMax is demonstrating
speeds in excess of 70 Mbps (more than six times the maximum speed of
WiFi) over much greater distances (up to 30 miles).
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•A•
access, 239
access cost, 239
action plan, 178–180
add-on charges
about, 239
cost management, 156–157
adding MAC, 250
adding VolP
broadband, 96
wireless networking, 122–123
advanced hard phones, 144
Alcatel, 227, 229
analog
about, 239
VolP, 24–25
analog modulation, 22–23
analog phones, 25
analog telephone circuits, 22–23
annualized financial analysis, 197
application layers
about, 18–19, 239
TCP/IP, 17
area code, 26, 239
assumptions, 3–4
asymmetric transmission
about, 240
broadband, 94
asynchronous transfer mode (ATM),
73–74
ATM (asynchronous transfer mode),
73–74
AT&T, 236
attenuation, signal, 91
Avaya, 227, 228
Avaya MultiVantage Communications
Applications suite, 228
Axxess, Inter-Tel, 232
•B•
B channel, 240
bandwidth
about, 240
allocation, 240
cost management, 170–171
dedicated transports, 106
home VolP, 219
switching reasons, 215–216
bandwidth on demand, 170–171
basic hard phones, 143
basic rate interface (BRI)
about, 240
PSTN, 83
Bell, Alexander Graham, 21–22
BellSouth, 236
billing
home VolP, 218
single-location companies, 189
bottom-line analysis, multiple
locations, 185
BRI (basic rate interface)
about, 240
PSTN, 83
broadband
about, 93, 240
adding VolP, 96
asymmetric transmission, 94
cable modem, 95–100
cable modem setup, 96–98
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broadband (continued)
cable modem troubleshooting, 98–99
HFC CSI, 95–100
market, 95
network contention, 98–99
network failure, 99
symmetric transmission, 94
television, 95–96
transmission methods, 94–95
users, 95
•C•
cable modems
about, 93, 95, 100
setup, 96–98
troubleshooting, 98–99
call control
about, 241
PSTN, 87–88
call features, 145
call forwarding, 241
call interception myth, 224
call setup, 86
call support, single-location companies,
193–194
call tear down, 87
call transfer, 241
caller, 19
calling feature, 241
Carnivore, 224
carrier service providers. See carriers
carrier services company. See carriers
carrier services infrastructure (CSI)
about, 65, 76–78, 241, 242
DS dedicated, 64, 67, 69–72
HFC CSI, 95–100
HFC dedicated, 64
HFC hybrid fiber-coaxial CSI, 75
optical carrier, 72–74
OS dedicated, 64
PSTN switched, 64, 67–69
switched, 64
wireless, 75–76
carriers
about, 241
home VolP, 217–218
case studies
cost management, 166–168
savings, 56–59
Central Office Exchange, 241
Centrex
about, 241
cost management, 159, 162–163
telephony model, 34–36
changing MAC, 250
channelizable, 170
channelization, 241
channels
about, 29
B channel, 240
D channel, 242
charges
about, 41
network access, 42–43
recurring costs, 54–55
savings, 52–55
service categories, 43–52
toll-bypass, 54
circuit-switched
about, 29
locations, 184–185
circuit-switched networks, 27–28
circuit-switched telephone service,
12, 24, 242
Cisco Systems, 227, 228
CLEC (competitive local exchange
carrier), 235, 242
codec, 23, 24
coder-decoder, 23
Comcast, 236
company use, cost management, 158–162
comparison costs, 201–204
competitive local exchange carrier
(CLEC), 235, 242
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compression
about, 242
poor, 90–91
computers
portable, 148–149
soft phones, 147
stationary, 148
consumers
about, 2
VolP, 79–80
contention, 70
contention-based networks, 98–99
contracts, single-location companies,
188–189
convergence
about, 242
cost management, 166
converging networks, 38–39
conversions, single-location
companies, 193
convincing management, cost
management, 168–169
corporate sector, VolP, 79
corporate users, 2
cost
dedicated transports, 106–108
features, 244
virtual private network, 137, 139
VolP over DSL transport, 86
cost management
about, 155
adding costs, 171
add-on charges, 156–157
bandwidth, 170–171
case study, 166–168
Centrex, 159, 162–163
changing costs, 171
channelizable, 170
company use, 158–162
convergence, 166
convincing management, 168–169
deregulating, 157
eliminating charges, 155–158
eliminating phone lines, 156
free call features, 157–158
future needs, 170
integrated networking, 166
interstate access surcharge, 157
KTS, 159, 164
level three switches, 170
moving costs, 171
PBX, 159, 165–166
POTS, 158–161
reducing phone lines, 156
scalability, 171
taxes, 156–157
telecommunications relay
surcharge, 157
transitions, 169–170
unified networks, 166–168
universal service fund, 157
cost-effective designs, 205–206
costs
about, 199
comparisons, 201–204
cost-effective designs, 205–206
evaluating, 199–204
gathering cost data, 200–201
hardware, 203
investments, 204–205
keeping current technology, 207–208
personnel, 204
recurring usage charges, 203
support, 206–207
switching reason, 212–213, 216
transport lines, 202
uninterruptible power supply
(UPS), 203
CSI (carrier services infrastructure)
about, 64–65, 241, 242
DS dedicated, 64, 67, 69–72
HFC dedicated, 64
HFC hybrid fiber-coaxial CSI, 75
optical carrier, 72–74
261
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CSI (carrier services infrastructure)
(continued)
OS dedicated, 64
PSTN switched, 64, 67–69
switched, 64
wireless CSI, 75–76
•D•
D channel, 242
data, gathering cost, 200–201
data network standards, 73
decisions, single-location companies,
187–189
dedicated, 29
dedicated access, 242
dedicated carrier services network, 29
dedicated networks, 29–30, 243
dedicated transports
about, 105
bandwidth, 106
cost, 106–108
dedicating channels to
applications, 114
DS transports, 109–110
DS0, 114
dynamic bandwidth allocation, 114–115
high-quality calls, 109
managing bandwidth, 113–115
network convergence, 111–113
OC transports, 11
speed, 106
switched lines, 116–117
switched networks, 111–113
T1 line, 110
T3 line, 110
dedicating channels to applications, 114
delays
about, 243
PSTN, 88–89
dense wave division multiplexing
(DWDM), 243
deregulation, cost management, 157
digital
about, 243
VolP, 24–25
digital networking, 22
digital phones, 25
digital service carrier service
infrastructure, 69
digital service (DS)
about, 243
dedicated CSI, 64, 67, 69–72
networks, 29–32
digital services carrier network, 28–29
digital signal carrier network, 28–29
digital subscriber line (DSL)
about, 93, 243
transport, PSTN, 85–86
VolP through, 100–104
digital telephony
about, 25–29, 243
area code, 26
PSTN, 25–29
directory feature, hard phones, 146
DIRECTV Group, 236
downtime, multiple locations, 182
DS (digital service)
about, 243
dedicated CSI, 64, 67, 69–72
networks, 29–32
DS0, 29, 114, 243
DS3, 243
DSI, 243
DSL (digital subscriber line)
about, 93, 243
transport, PSTN, 85–86
VolP through DSL connection, 100–104
DWDM (dense wave division
multiplexing), 243
dynamic bandwidth allocation, 114–115
dynamic channel allocation, 66
dynamically, 170
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•E•
edge devices, 14–15
effects, multiple locations, 182–185
eliminated toll service charges, home
VolP, 218
eliminating charges, cost management,
155–158
eliminating phone lines, cost
management, 156
emergency services
surcharges, 156
switched lines, 117
encapsulation, 14, 244
encryption, 244
enhanced Internet access, home
VolP, 219
enhanced network management,
switching reason, 214
E911, 244
Enterprise IP Telephony, 227
errors, PSTN, 88–89
Ethernet
about, 74, 244
LANs, 70
networking, 120
evaluating costs, 199–204
exclusivity, 106
existing networks
locations, 174–177
single-location companies, 190–192
expensive features myth, 225–226
extensibility, 244
external calls, 14–15
•F•
FBI, 224
FCC (Federal Communications
Commission), 43
features
availability, 212
cost, 244
hard phones, 144–146
soft phones, 149
Federal Communications Commission
(FCC), 43
federal taxes, 156
fiber optic, 245
fiber to the home (FTTH), 99
fiber-optic cabling systems, 73
financial analysis, single-location
companies, 196–197
firewalls
about, 245
consumer VolP, 135
Internet, 134–137
packet filter, 135
proxy server, 136
stateful event monitor (SEM), 136–137
flexibility
switching reasons, 214
VolP (voice over Internet protocol),
15–16
foundation network, 202
frame relay, 70
frames, 70, 245. See also MAC
free call features, cost management,
157–158
free local service, home VolP, 218
FTTH (fiber to the home), 99
future needs, cost management, 170
•G•
Gartner, 227
gateway, 245
gathering cost data, 200–201
graphical user interface (GUI), 149
263
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•H•
•I•
hard phones
about, 142–143, 245
advanced, 144
basic, 143
directory feature, 146
features, 144–146
intermediate, 144
phone feature, 146
Web access, 146
hardware costs, 203
headers, TCP/IP layer, 18
HFC (hybrid fiber-coaxial)
about, 245
CSI, 75, 95–100
dedicated CSI, 64
high-quality calls, dedicated
transports, 109
home VolPs
about, 217
eliminated toll service charges, 218
enhanced Internet access, 219
free local service, 218
more bandwidth, 219
more ports available, 220
reduced international charges, 219
reduced toll service charges, 218
single bill, 218
single carrier, 217–218
videoconferencing, 220
wireless service, 220
hop, 245
hosted telephony, 245
hosted VolP, 245
hosted VolP telephony, 245
hotspots, 124
HTTP (hypertext transfer protocol), 126
hybrid fiber-coaxial CSI, 75
hybrid fiber-coaxial (HFC), 245
hypertext transfer protocol (HTTP), 126
IEEE, 246
IEEE 802.3 standard, 246
IEEE 802.11 standard, 120–121, 246
IEEE 802.16 standard, 123–124, 246
IEEE 802.11a standard, 120
IEEE 802.11b standard, 121
IEEE 802.11g standard, 121
ILEC (incumbent local exchange carrier),
235, 242, 246. See also CLEC
implementing
multiple locations, 181–182
single-location companies, 192–196
virtual private network, 139–140
inbound calls, 112
information technology professionals, 3
in-house support, 206–207
in-state toll, 246
integrated networking, cost
management, 166
integrated services digital network
(ISDN), 83–85, 240, 246
interexchange carriers (IXCs),
242, 246, 248
intermediate hard phones, 144
internal calls, 14
international, 246
international charges, home VolP, 219
Internet
about, 129–130, 246
consumer VolP, 135
firewalls, 134–137
ISPs, 132–133
network options, 130–131
protocol layers, 133–134
virtual private network, 137–140
VolP, 78–79
Internet Engineering Task Force, 140
Internet Protocol (IP), 247
Internet service providers (ISPs), 246
Internetwork layer, TCP/IP, 17
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interoperability, 13
interoperable telephony services, 13
interstate access surcharge, 157
interstate tolls, 246, 249
intralata tolls, 247, 249, 253
intranet, 130, 247
intrastate tolls, 247
Inter-Tel, 227, 232
investments
costs, 204–205
switching reason, 213
IP address, 247
IP Centrex, 245, 247
IP (Internet Protocol), 247
IP soft phones
about, 247
pocket PCs, 122
IP telephony (IPT), 11–12, 247
IP-PBX, 114
IPT (IP telephony), 11–12, 247
ISDN (integrated services digital
network)
about, 247
B channel, 240
transport, 83–85
ISPs (Internet service providers),
132–133, 248
IXCs (interexchange carriers),
242, 246, 248
•J•
jitter, 90
jitter buffer, 90
•K•
keeping current technology, costs,
207–208
key telephone system (KTS), 36–37, 159,
164, 248
KTS (key telephone system), 36–37, 159,
164, 248
•L•
LANs (local area networks), 12–13,
248–249
last mile, 108, 248
LATA (local access and transport area),
27, 248, 249
leading edge technology, switching
reason, 211–212
LEC. See ILEC
level three switches, 170
line cost, 248
line features, 145
lines, 248
T1 lines, 110, 243
T3 lines, 110, 243
switched, 116–117
local access and transport area (LATA),
27, 248, 249
local area networks (LANs), 12–13,
248–249
local calling areas, 249
Local Exchange Carriers (LECs), 42, 242
See also ILEC
local loops, 24, 108, 248, 249
local service, home VolP, 218
local toll calling areas, 45
local tolls, 249, 253
local unlimited calling areas, 45
locations. See multiple-location
companies; single-location
companies
long distance, 249
long-term plans, single-location
companies, 189
•M•
MAC (media access control), 13, 120,
249, 250
maintenance, switching reason, 213–214
MAN (metropolitan area network), 250
management, switching reason, 213–214
265
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managers, 2
managing bandwidth, dedicated
transports, 113–115
manufacturers
about, 227
Alcatel, 227, 229
Avaya, 227, 228
Cisco Systems, 227, 228
Inter-Tel, 227, 232
Mitel, 227, 230
NEC, 227, 230–231
Nortel, 227, 230
Shoretel, 227, 231
Siemens, 227, 229
3COM, 227, 231
market, broadband, 95
MCI, 73, 236
media access control (MAC), 13, 120, 250
METAspectrum, 227
metropolitan area network (MAN), 250
Microsoft Outlook, 149
Mitel, 227, 230
mobile users, 16
monthly recurring costs (MRCs), 250
moving MAC, 250
MRC (monthly recurring costs), 250
Multimedia Communication
Server 5100, 230
multiple locations, 173–174
multiple-location companies
about, 173
bottom-line analysis, 185
circuit-switched, 184–185
downtime, 182
effects, 182–185
existing networks, 174–177
implementation, 181–182
multiple, 173–174
network costs, 182–184
network features, 182–185
plan development, 177–180
plug-and-play, 181
multiplex (MUX), 110
MUX (multiplex), 110
myths
about, 221
calls can be intercepted, 224
expensive features, 225–226
911 calls not dependable, 224–225
phones are pricey, 223
POTS is cheaper, 222
POTS is faster, 223
runs only on Internet, 222
service quality, 223
staying power, 225
throw out PBX phones, 226
•N•
narrowband, 93
NBX, NEC, 231
NEC, 227, 230–231
NEC Unified Solutions, 231
network access charges, 42–43
network contention, broadband, 98–99
network convergence, dedicated
transports, 111–113
network costs, multiple locations,
182–184
network delay, PSTN, 90
network failure, broadband, 99
network features, 182–185, 250
network interface cards (NICs), 13, 250
network interface layer, TCP/IP, 17
network management system (NMS),
250, 251
network options, Internet, 130–131
network timing protocol (NTP),
19, 250, 251
networks
about, 14
costs, single-location companies, 192
soft phones, 147
Nextel Communications, 236
NICs (network interface cards), 250
911 calls
about, 239
emergency surcharge, 156
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E911, 244
not dependable myth, 224–225
NMS (network management system),
250, 251
nonconverged DS networks, 30
nonconverged PSTN, 30
nonintegrated networks, 32
Nortel, 227, 230
NPA (numbering plan area), 27–28, 251
NTP (network timing protocol),
19, 250, 251
number exchange (NXX), 27–28, 251
numbering plan area (NPA), 27–28, 251
numbers, telephone, 24
NXX (number exchange), 27–28, 251
Nyquist, Harry, 23
•O•
OC (optical carrier)
about, 72–74
network, 251
transports, 11
OC3, 251
OC12, 251
office savings, 53
off-net, 251
off-net calls, 38
OmniPCX communications platform, 229
on-net, 251
optical carrier network, 251
optical carrier (OC)
about, 72–74
network, 251
transports, 11
OS dedicated carrier services
infrastructure (CSI), 64
outbound calls, 112
•P•
packet filters, 135
packets, 252
packet-switched, 12, 29, 252
partnering for support, 207
payload, PSTN, 90
PBX (private branch exchange)
about, 252, 253
cost management, 159, 165–166
model, 36–37
PDAs (personal digital assistants), 13
person receiving VolP, 19
personal digital assistants (PDAs), 13
personnel
allocation, 215
costs, 204
phones. See telephones; VolP phones
physical layer
about, 252
TCP/IP, 17
plain old telephone service (POTS)
about, 22, 235, 252
cheaper myth, 222
cost management, 158–161
faster myth, 223
line costs, 33–37
line equivalencies, 42
lines, 252
telephones, 252
transport, PSTN, 82
VolP through DSL connection,
101–104
plan development
about, 177
action of plan, 178–180
solution design, 177–178
plug-and-play, 181
point of presence (POP), 252
poor compression, PSTN, 90–91
POP (point of presence), 252
port speed, 70
portability
switching reasons, 214
VolP (voice over Internet protocol), 13
267
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portable computers, 148–149
ports available, home VolP, 220
POTS (plain old telephone service)
about, 22, 235, 252
cheaper myth, 222
cost management, 158–161
faster myth, 223
line costs, 33–37
line equivalencies, 42
lines, 252
telephones, 252
transport, PSTN, 82
VolP through DSL connection,
101, 103–104
presence, 252
PRI (primary rate interface)
about, 253
lines, 193–194
PSTN, 83–85
primary rate interface (PRI)
about, 253
lines, 193–194
PSTN, 83–85
privacy, 224
private branch exchange (PBX)
about, 252–253
cost management, 159, 165–166
model, 36–37
private dedicated transport network, 29
private DS, 29
private line networks, 106
private line service, 66
private networks, 29–32, 106
private systems versus VolP telephony,
37–38
private telephone systems, 33–37
productivity applications, switching
reason, 215
protocol layers, 133–134
protocols, 11, 17
proxy server, firewall, 136
PST-VolP baseline, PSTN, 82
PSTN (public switched telephone
network)
about, 12, 22, 24, 81, 240, 253
baseline, 253
BRI, 83
call control, 86–89
call control and VolP, 87–88
delays and errors, 88–89
digital telephony, 25–29
DSL transport, 85–86
gateway, 253
ISDN transport, 83–85
jitter, 90
network delay, 90
networks, 29–32
payload, 90
poor compression, 90–91
POTS transport, 82
PRI, 83–85
PST-VolP baseline, 82
quality, 89–91
service level agreement, 91
signal attenuation, 91
signaling system 7 (SS7), 87
switched CSI, 64, 67–69
VolP support, 81–86
public networks, 29–32
public switched telephone network
(PSTN)
about, 12, 22, 24, 81, 240, 253
BRI, 83
call control, 86–89
call control and VolP, 87–88
delays and errors, 88–89
digital telephony, 25–29
DSL transport, 85–86
gateway, 253
ISDN transport, 83–85
jitter, 90
network delay, 90
networks, 29–32
payload, 90
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poor compression, 90–91
POTS transport, 82
PRI, 83–85
PST-VolP baseline, 82
quality, 89–91
service level agreement, 91
signal attenuation, 91
signaling system 7 (SS7), 87
switched CSI, 64, 67–69
VolP support, 81–86
public telephone network, 29
•Q•
quality, PSTN, 89–91
Qwest Communications, 236
•R•
real-time network management, 109
real-time transport control protocol
(RTCP), 19, 253–254
real-time transport protocol (RTP),
19, 253–254
real-time videoconferencing networks, 19
recurring costs, 54–55
recurring usage charges, 203
reduced international charges, home
VolP, 219
reducing phone lines, 156
regional tolls, 249, 253
regulatory fees, 239, 254
ring topology, 99
RJ-11, 143
RJ-45 connector, 142–143
RJ-45 LAN interface port, 245
routers, 254
routing calls from area code to area
code, 26–27
RTCP (real-time transport control
protocol), 254
RTP (real-time transport protocol),
19, 253, 254
runs only on Internet myth, 222
•S•
savings
case study, 56–59
charges, 52–55
single-location companies, 195–196
SBC Communications, 236
scalability, 171, 254
SEM (stateful event monitor) firewalls,
136–137
servers, 13
service categories
about, 51–52
charges, 43–52
international, 43, 50–52
interstate, 43, 49–50
intralata, 43–48
intrastate, 43–45, 48–52
local, 43–52
service level agreement, PSTN, 91
service quality myth, 223
session initiation protocol (SIP), 126,
127, 254
setup VolP through DSL connection,
102–103
Shannon, Claude, 23
Shoretel, 227, 231
Siemens, 227, 229
signal attenuation, PSTN, 91
signaling system 7(SS7), 87, 254
single bill, home VolP, 218
single carrier, home VolP, 217–218
single-location companies
about, 187
billing, 189
call support, 193–194
contracts, 188–189
conversions, 193
decisions, 187–189
existing networks, 190–192
financial analysis, 196–197
269
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single-location companies (continued)
implementing, 192–196
long-term plans, 189
networking costs, 192
PRI lines, 193–194
savings, 195–196
SIP (session initiation protocol),
126–127, 254
slamming, 50
soft phones
about, 16, 146, 254
computers, 147
features, 149
network, 147
portable computers, 148–149
software, 147
stationary computers, 148
software, soft phones, 147
solution design, plan development,
177–178
speed, dedicated transports, 106
splitter, 254
Sprint, 236
SS7 (signaling system 7), 87, 254
standards
IEEE 802.3 standard, 246
IEEE 802.11 standard, 120–121, 246
IEEE 802.16 standard, 123–124, 246
IEEE 802.11a standard, 120
IEEE 802.11b standard, 121
IEEE 802.11g standard, 121
star topology, 99
state taxes, 156
stateful event monitor (SEM) firewalls,
136–137
stationary computers, soft phones, 148
staying power myth, 225
support costs, 206–207
switched carrier services infrastructure
(CSI), 64
switched lines
dedicated transports, 116–117
emergency services, 117
switched networks
about, 29–30, 81
dedicated transports, 111–113
switches, 13
switching reasons
about, 211
bandwidth utilization, 215–216
cost-effectiveness, 212–213, 216
enhanced network management, 214
feature availability, 212
flexibility, 214
investment protection, 213
leading edge technology, 211–212
maintenance, 213–214
management, 213–214
personnel allocation, 215
portability, 214
productivity applications, 215
symmetric transmission, 94, 255
system features, 145
•T•
taxes, cost management, 156–157
TCP, 255
TCP/IP
about, 255
differences, 17–20
layers, 17
model, 16
technology, costs and, 207–208
Telecommunications Act (1996),
235, 242, 255
telecommunications relay surcharge, 157
telephone calls, 1, 11
telephone networks, 22
telephone numbers, 24
telephony
about, 13
analog and digital, 24–25
Centrex model, 34–36
circuit-switched networks, 27–28
converging networks, 38–39
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digital, 23
digital services carrier network, 28–29
digital telephony, 25–29
expensive myth, 223
features, 146
KTS model, 36–37
PBX model, 36–37
POTS line costs, 33–37
private systems versus VolP, 37–38
private telephone systems, 33–37
session initiation protocol
telephones, 127
television, broadband, 95–96
terrestrial, 110
3COM, 227, 231
throughput, 106
throw out PBX phones myth, 226
toll bypass, 255
toll charges, 255
toll-bypass charges, 54
toll service charges, home VolP, 218
T1 line, 110, 243
T1 lines, 71, 255
T1 transport, 66
T3 lines, 71, 110, 243, 255
topology
ring, 99
star, 99
transitions, cost management, 169–170
transmission control protocol/Internet
protocol (TCP/IP), 256
transmission control protocol (TCP), 255
transmission methods, broadband,
94–95
transport, 248, 256
transport layer, 17, 19–20, 256
transport lines, 202
transport services, 66, 256
transports, 65–67
triple play, 256
troubleshooting VolP through DSL
connection, 103
trunking, 126
•U•
UDP (user diagram protocol), 19–20, 256
unified networks, cost management,
166–168
uninterruptible power supply (UPS), 203
universal service fund, 157
upgrading
older systems, 150–151
wireless networking, 121
UPS (uninterruptible power supply), 203
user diagram protocol (UDP), 19–20, 256
users, broadband, 95
using older phones, 152
•V•
vemail, 15, 256
Verizon Communications, 236
videoconferencing, home VolP, 220
virtual private networks (VPNs)
about, 134–135, 256, 257
cost, 137, 139
implementing, 139–140
Internet, 137–140
voice mail, 256
voice over Internet protocol. See VolP
(voice over Internet protocol)
VolP adapter box, 257
VolP Centrex, 245, 257
VolP phones
about, 141–142
hard phones, 142–146
soft phones, 146–149
upgrading older systems, 150–151
using older phones, 152
wireless phones, 149–150
VolP through DSL connection
about, 100
POTS, 101, 103–104
setup, 102–103
troubleshooting, 103
271
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VolP (voice over Internet protocol)
about, 1, 11, 256–257
advantages, 12
analog and digital, 24–25
Bell, Alexander Graham, 21–22
consumers, 79–80
corporate sector, 79
flexibility, 15–16
interoperability, 13
MAC address, 13
origins, 21–22
over DSL transport cost, 86
over Internet, 78–79
portability, 13
providers, 235–237
support, PSTN, 81–86
VolP-enabled phones. See VolP phones
VPNs (virtual private networks)
about, 134–135, 256, 257
cost, 137, 139
implementing, 139–140
Internet, 137–140
•W•
WANs (wide area networks), 14, 244, 257
WAP (wireless access point), 257, 258
Web
access, hard phones, 146
surfing, 15
Web sites
Alcatel, 227, 229
Avaya, 227, 228
Cisco Systems, 227, 228
Internet Engineering Task Force, 140
Inter-Tel, 227, 232
Mitel, 227, 230
NEC, 227, 230–231
Nortel, 227, 230
Shoretel, 227, 231
Siemens, 227, 229
3COM, 227, 231
VolP providers, 236
WEC (wireless extension to cellular),
122–123, 257, 258
wide area networks (WANs), 14, 244, 257
WiFi (wireless fidelity), 93, 100, 257, 258
WiMax (worldwide interoperability for
microwave access), 100, 108,
123–125, 257, 258
wireless access point (WAP), 257, 258
wireless CSI, 75–76
wireless extension to cellular (WEC),
122–123, 257, 258
wireless fidelity (WiFi), 93, 100, 257, 258
wireless labeling, 100
wireless networking
about, 119–120
adding VolP, 122–123
Ethernet networking, 120
home VolP, 220
IEEE 802.11 standard, 120–121
IEEE 802.16 standard, 123–124
IEEE 802.11a, 120
IEEE 802.11b, 121
IEEE 802.11g, 121
IP soft phones for pocket PCs, 122
Media Access Control (MAC), 120
upgrading, 121
WiMax, 123–125
wireless extension to cellular, 122–123
WiSIP, 126–127, 150
wireless phones, 149–150
WiSIP (wireless session initiation
protocol), 126–127, 150
worldwide interoperability for
microwave access (WiMax), 100, 108,
123–125, 257, 258
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