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VoIP Peering: Event Horizon
[December 05, 2007]

VoIP Peering: Event Horizon

Chief Strategy Officer
(This article originally appeared in the January 2006 issue of Internet Telephony magazine.)
From Summit to Summit, VoIP Peering has peaked interest in the technology, that is. VoIP Peering (News - Alert) still has a long way to go, but it has certainly begun to sink in with many in the industry. After being the keynote speaker for the State of VoIP Peering during the VoIP Peering Summit at the Internet Telephony (News - Alert) Conference & EXPO in Miami back in February, it became clear to me that many looked on with a passive sense of acknowledgment, but didn't feel threatened in any way as that was the first time they had heard anything about such a concept. Besides that, most believed that VoIP Peering was only a technical benefit, improving provisioning methods. They either didn't hear, or they misunderstood the part about ENUM. Those that did hear and clearly understood, namely the VoBB and smaller cable companies with flat-rate VoIP offerings, jumped right on it and have been pursuing and implementing it ever since.

By the time we got to Los Angeles, ENUM VoIP peering was a half-billion minutes strong and everywhere was talk of implementations! The VoIP Peering summit at the LA Internet Telephony Conference & EXPO in October was a big step forward. Now we had some real debate from the attendees in the form of nay-sayer questions. There were even a few new service offerings announced at the conference. It was clear that the potential economic impact of multi-lateral VoIP Peering was being understood. The questions were good, challenges overcome, and objections noted, but overall it was a testament to how far the concept had come in less than a year. Any time there are people serious enough to try and discount or discredit reality, you know you're on to something. More providers trying to get in to the space is also a good indication.

As all types of business models around the world change those of us in telecom need to realize that we are not immune. Actually, were far from it. In the past there have been radical shifts and new businesses born from them. Ultimately, all of those changes are what led us to where we are today as a global society. To us it's all good, as we don't remember first-hand the pain and suffering the now infamous buggy-whip makers went through while their business model (and entire industry) was wiped off the face of the earth. There's no need for many of us to try and imagine what it must have felt like as anyone in the circuit-switched minutes business is feeling the same way right about now. If you're not one of those people, you're probably only one degree of separation away from someone who is. TDM switches are being replaced with softswitches, or at least upgraded to IP front ends until the eventual phase-out. There is a new skill set to acquire, a lot of work to do, all for lower margin services. It's a lot of effort and many people in the path of this evolutionary change are questioning the potential returns.

Just as the event horizon of the black hole is met and, from that point on, all matter is crushed in to singularity, margins on minutes and the minutes themselves have now met the VoIP Peering Event Horizon. If nothing else, bi-laterals become easier to provision and the whole market moves faster, with shorter contracts and more price compression. That's the bright side for the existing model. The multi-lateral VoIP Peering that is occurring today in ever-growing daily volumes is whisking PSTN minutes away in to the ether, never to return again. The minutes universe is getting smaller by the second. If you haven't done so already, its time to evaluate your voice service business model and form an escape plan.

There is a sunny side of the street. With the help of the visionary, Rich Tehrani (News - Alert), VoIP Peering is gearing up for a big year in 2006. Rich has independently declared 2006 as the Year of VoIP Peering. This declaration is, no doubt, based on its successes in 2005, but it is probably much more than just a guess. Rich, President of TMC (News - Alert), has been in this business of VoIP and Internet telephony for many years. He's seen all that has come before, what worked, what didn't, and why. VoIP peering is a better provisioning methodology as well as the key to a definable ROI and bottom line margin improvement for carriers and enterprises alike. VoIP Peering makes common sense and a lot of sense to Rich. Thanks for the vote of confidence!

Hunter Newby is chief strategy officer at telx (News - Alert). For more information, please visit

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