But won't that eat the Bells' profits up? How are they supposed to survive?
Gosh, excuse me, but my view of this is we're willing to pay for access to the service -- not asking for the service for free. We just want to be able to be part of the game.
MCI seems to be taking the lead using the Internet Protocol (IP) to direct telephone traffic, rather than the regular circuit-switched telephone networks. How's that transition going?
We want to get 25 percent of our calls over an IP backbone by the end of the year. We're at 10 percent now. We want to move all of it over by 2005.
Verizon is also doing a lot of IP backbone building. But is there anyone else matching these efforts?
This year marks a time when the use of VoIP has accelerated quite dramatically. It's been going on quietly in the enterprise domain, where Cisco has been very active in developing those kinds of products. This year is the first time you'll see traditional telecommunications carriers make serious moves in this direction. Maybe statistics will justify it as the year VoIP has happened.
Why would MCI and other carriers do this?
We'll be able to operate a single backbone rather than a bunch of different networks. By moving our voice services into that framework, there's a much, much richer communications network. I can do video, imagery, text -- run programs -- and there's room for new services not created yet like using the Internet component to initiate applications. It's also more efficient.
What do you mean by efficient?
The capacity to carry voice over the Internet is less than it is for the circuit-switched environment. When you dial up some person on today's telephone network, you are tying down a full 64 kilobit channel. When you're not talking, what's happening is half the channel is lying idle. If neither of you are talking, the whole 64 bits are wasted. In packet-switched, (which VoIP uses) the only time something consumes capacity is when there's something to send. The reason that's important is we don't dedicate capacity in the same way as we do in the circuit-switched world. When my voice stops and the packet stops flowing, that capacity can be used by someone else.
