What’s holding up this house of cards? Right now every VoIP system and service is an island unto itself. You’ll more often than not find that on-net calls for any particular VoIP service are free. On-net means on that particular service, unrelated to location. This is because the provider owns the network and doesn’t have to pay anyone else to handle the traffic. They are making money through the monthly fee they charge their customers for the VoIP service itself.
The same is true for large companies with their own enterprise VoIP systems. One of the big cost advantages of VoIP is that you can eliminate the separate telephone network and use your data network to transport voice, data and video. Another savings comes from keeping your voice traffic on your own network, not just within an office but also between locations. Avoid the public telephone network and you avoid the per minute charges to use it.
Therein lies the rub. The only common link between all telephones on Earth is the PSTN or Public Switched Telephone Network. Its legacy is based on switching analog phone circuits to make the phone to phone connections. Long haul circuits have long since gone digital, but a very special type of digital. The phone conversations are digitized according to an international standard, G.711, and packed into rigidly synchronized channels called DS0s. A DS0 is 64 Kbps and is the same whether being transported on a T1 or PRI trunk line right on up to a fiber optic OC-768 cable. Cellular phones have their own network standards, but are designed to interface with the PSTN to hand-off traffic.
The heart of the PSTN is both its technical specs for connecting analog and digital conversations and its switching systems called SS7. Nowadays the switching signals have their own separate paths between switching offices in a hierarchy consisting of local central offices and tandem offices that connect the local offices into one large universal network. If you want to connect with any phone on the PSTN, you need to send the signals according to the SS7 protocol.
VoIP comes as an outgrowth of the computers networking industry rather than the telephone industry. Its technology is based on IP packets and SIP switching rather than pulse code modulation channels and SS7. As you might expect, you can’t directly connect one system to the other. Analog and VoIP phone systems, including business PBX systems, connect or “terminate” their calls to the PSTN. The PSTN SS7 switches take care of getting the conversations connected from one proprietary network to another. Each time a call has to traverse the PSTN, there is a small but significant per minute access charge.
TW Telecom, a major competitive carrier, is looking to give the telephone system a nudge in the direction of eliminating the SS7 switching step. According to a recent report in Connected Planet, they are asking the FCC to classify voice calls over IP as a telecom service rather than the current status as an information service. That would get incumbent telephone companies, the heart of the old Bell system, to connect phone calls on an IP to IP basis. The benefits would include higher voice quality by eliminating the protocol conversions and lower network compensation costs.
TW’s actions are the first step in a process of creating IP Exchanges, similar to Ethernet Exchanges that share traffic between network providers and extending the reach of all Ethernet networks. It’s a matter of standardizing protocols and fees so that you have a level playing field without technical hiccups. It’s not the end of the beginning, but the beginning of the end for SS7.