Column: Telecom takes positive stance on Internet telephony

Unlike most of its overseas counterparts, Telecom New Zealand is highly gung-ho about the prospect of Internet telephony.

Unlike most of its overseas counterparts, Telecom New Zealand is highly gung-ho about the prospect of Internet telephony.

"It's going to help drive the Internet into the mass market," says the telco's manager of Internet services, Chris Tyler.

Cynics have suggested that the real reason Telecom has been so publicly positive about the tool--Tyler made warm comments about it at last month's launch of Xtra, the telco's Internet service--is because Telecom is confident it's too unsound ever to come off. The company can afford to take this stance publicly, says this school of thought, garnering kudos for being open and accepting of new technology, because it knows Internet telephony is too technologically tricky to attract anyone outside a few enthusiasts.

But Tyler--who uses it to keep in touch with friends in the United States--doesn't think so.

"It's a very real application for the Internet. The fact is, it's here, it adds value to the Internet experience and, at the end of the day, it's got a lot of applications and functionality associated with it."

US telcos in particular have reacted with horror to the technology, petitioning the Federal Communications Commission to have it regulated. The main reason given for this is that users of Internet telephony currently avoid paying access charges, the monies from which go to providing universal service.

"The natural reaction from any industry that sees someone offering their service on a different channel is to be a bit defensive," says Tyler. "We've been through the defensive issues, and we recognise that as the technology comes along, it will have significant competitive pressure on traditional telephony pricing."

By this time next year a lot of the technical problems will have been ironed out, he says. It's likely people will be able to call telephones from their PC, rather than both parties requiring a computer, and he points out that companies such as Netscape and Microsoft are embedding open standards telephony software in upcoming releases.

"And we believe with the interaction of video, graphics and voice we will see a lot more functionality coming out.

"But currently, and for a considerable period in the future, voice telephony is much more efficient and reliable--it remains a higher quality means of connecting, and as a result it will have premium pricing."

The early adopters will be the corporate market, as they will tend to make the most savings and already have virtually all the necessary hardware and infrastructure installed.

In the process of the US argument over regulation, some interesting figures have emerged; for example, the America's Carriers Telecommunication Association (ACTA) estimates that the average long-distance phone call comes to 22 cents a minute, while the average Internet call costs 3.3 cents a minute (the figures are in US currency). And the average phone call lasts three minutes, while the average connect time for Internet users is 18 minutes.

But the biggest issue that will inhibit growth of Internet telephony is going to be infrastructure--the unreliability of Internet connections, plus audio bandwidth requirements.

(Rob Hosking is a Wellington-based Computerworld reporter. Email him at rob_hosking@idg.com.)

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