Less neutral, more neural

Brix NetworksI read two articles yesterday that make arguments for service quality differentiation.

Om Malik writes about the latest study on VoIP quality. He quotes a study from Brix Networks that indicates almost 20 percent of Internet telephone test calls experienced unacceptable call quality over the last 18 months.

Brix CTO Kaynam Hedayat says:

The network is ready for VoIP. But now that there are more services running over the same pipe, carriers need to differentiate packets and prioritize service

Om says:

A lot of these problems are due to bandwidth constraints on the networks. Trying watching You Tube videos and talking over a VoIP phone and you experience the downshift in quality first hand.

And in Network World Canada, Mike Volpi, senior vice-president of Cisco’s service provider group and routing technology group, is interviewed on trends in the carrier market – an interview that took place at our 2006 Canadian Telecom Summit. When asked “Does Cisco have an official opinion on Net neutrality?” Mike replied:

We do. We have a strong opinion. Our view is that additional legislation is unnecessary. We totally agree with the notion there should be no blocking of lawful content. However, we don’t believe there should be legislation mandating that every packet on the network be treated equally. Our simple analogy is that it’s like creating legislation that every passenger on an airplane should be treated equally, whether they choose to pay more or not. My view is if I choose to pay more, I have the right to pay more and be treated better.

Brix is reporting that there are service quality problems with 20% of VoIP calls. This is caused by “late packet discards, lost packets, and round-trip voice latency.” In other words, voice has problems riding in a permissive environment over a ‘stupid’ network.

Maybe the time has come to recognize that not all applications are created equally – that some applications on some networks might benefit from a little intelligence that recognizes the real-time characteristics demanded by voice. Voice isn’t working well enough with a neutral network.

It takes a more neural approach – intelligently recognizing that voice should supersede other applications.

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VoIP adoption in the USA

TelephiaAlec Saunders writes that last Friday, Telephia released a report on what they call the ‘pure-play subscription VoIP’ business in the United States. The study excludes companies like Skype and the cable companies, but includes AT&T; CallVantage and Verizon VoiceWing.

In any case, the survey finds that in Q2 2006, 4.1% of online households in the US subscribe to a VoIP telephone service, up from 3.1% in Q1. This represents an increase from 2.2M to 2.9M.

Vonage is the category killer at 53.9% share, with almost 10 times the share of the second place providers, AT&T; and Verizon each with 5.5%.

The study also looked at reasons to churn. According to Kanishka Agarwal, Vice President of New Products, Telephia:

The VoIP market is highly competitive with many different players trying to get a bigger slice of the market share. Service providers who offer the best customer experience through superior product quality and excellent customer service will beat out their competition

According to the survey, more than 27 percent of VoIP subscribers who are likely to change providers cited network quality as their primary reason for wanting to switch.

I’m not sure I understand the Telephia decision that “excludes cable companies who offer ‘digital phone’ services since they are not promoted as VoIP.” This will ultimately limit the value of the survey unless Telephia modifies its policy.

I’m not sure that customers worry about such arbitrary distinctions and categories that the industry assigns to different services and technologies.

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Cheap shots

VonageVonage Canada held an analyst meeting last Tuesday to update the community with their product plans. Jon Arnold has a good description of the information from the meeting. By the way, the V-Phone installs easily and works like a charm.
One of Jon’s takeaways was a commentary on the challenges of marketing when you don’t have an existing customer base (such as that enjoyed by the telcos and cablecos):

All the money in the world doesn’t change the fact that they have limited options for mass marketing to attract customers. So, by definition, they have to be that much more creative to either find or create routes to market.

Contrast Jon’s position with a cheap shot thrown by Networking Pipeline. In an article called “Vonage: The New Spyware King“, we read:

A report from a respected anti-spyware researcher says Vonage ads appear in a dozen spyware apps, and that the ads also show up at pornographic sites.

… targeting people at pornographic sites isn’t going to bring in the best, most stable customers, either.

Oh my! I guess the Networking Pipeline people don’t want ads for consumer products to appear with their porn.

Still, it gives a new perspective to Vonage wanting ILECs to provide naked DSL.

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Pervasive communications

The availability and power of pervasive personal communications took on special meaning for our family this past week as our daughter completed her year of studies abroad.

She spent much of her time during the past week in bomb shelters. We were able to stay in touch by cel phone – providing a reassuring voice for both sides of the call.

I often hear people complain about the changing decorum and etiquette as cel usage becomes pervasive. Still, it is in times of emergencies such as these that help most of us appreciate these technologies and the accommodations that must be made to our traditional sense of courtesy.

By the way, she arrived home safely last night. Thanks for asking.


Update:
I notice that Jeff Pulver has a guest blog today that makes observations on war in the age of connectivity .

The New York Times has an article Online, Tears and Empathy for Israelis that also ties into this theme. The article quotes Ami Ben-Bassat, a journalist who writes about popular technology.

Mr. Ben-Bassat cautioned against what he described as the romanticism of some bloggers who think their interactions might change the world, or at least the conflict.

Exit Dexit

DexitIn the department of ‘How is that for irony?’, word is that Dexit, the company that promised a cashless society, is continuing to have a tough time managing its own cash.

In a press release on Thursday, Dexit announced it cut its staff from 55 down to 30 and it has scaled back the number of locations that will accept the card. According to John McBride, the company Chairman and interim CEO,

The Company launched the Dexit Service in September 2003 and has now successfully proven the reliability and scalability of the technology.

Huh? I have two Dexit chips that I received as demonstration units and both have all the money still loaded on them. I never found a location that accepted Dexit, so I don’t know how there can be any evidence of scalability. I suspect that Esso, Shell and Mobil have better proof of RFID technology scalability.

Most importantly, almost all of Dexit’s revenues have been derived from an exclusive licensing agreement the company enjoyed with Bell. That agreement expired and it has not yet been renewed. Despite ‘good faith’ efforts to negotiate a new arrangement, Dexit has already indicated that it will get no licensing revenues for the quarter that just ended June 30.

I didn’t see any evidence of success in marketing, success in getting users or vendors to adopt the technology or shift away from reaching into their pockets for change. The company might have been better off with a strategic partnership with a gasoline company to leverage their existing base of RFID users.

I can think of a bunch of relationships that would have been more fruitful.

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