IP convergence and your telecom contract

IP voice/data convergence naysayers have it easy. On the surface, the phenomenon seems easy to debunk.

The popular press spent the first half of this year glorifying the new IP telephony providers because they could carry phone calls for "only" 7.5 cents per minute. But everyone in the trenches realizes most corporations are already getting regular telephony for less.

Besides, I've yet to hear of a network manager handing a card to his CEO and saying, "Punch in these 31 numbers to reach our new Internet carrier, and then talk slowly and loudly to the other CEO so he knows we're offering $10 million, not $10 billion, in that takeover deal."

So can you sit back and let convergence hype just roll over you until it goes away? Not by a long shot. There's real action in voice over IP today. And the real action has nothing to do with numbers like 7.5 cents per minute. Move the decimal point over and it's more like making calls for 0.75 cents per minute by avoiding the tolls of the legacy carriers and the newbies.

Users are finding that it doesn't take an announcement of voice-over-frame relay services from AT&T, MCI and Sprint to get the convergence market going. For you, the real hang-up could be in something much closer to home: your telecom contract.

For years carriers have promised to shave rates just a little more if you sign a long-term voice contract with a rising minimum expenditure each year of the contract. But go to move your voice traffic to frame relay or ATM and you may suddenly find you've violated the contract because your telephony spending will have shrunk.

So if you have any interest at all in voice/ data convergence, here are some talking points for your next carrier negotiation, which I hope is coming up soon:

1. The major carriers now all want to be your voice and data carrier. Fine. Tell them the key to your business is the data network. Any carrier that prevents you from adding features to your enterprise data network because the contract obligates you to spend X bazillion dollars on voice tolls could be replaced.

2. Watch for extra costs such as premiums for souped-up, voice-enabled frame relay virtual circuits that supposedly get priority over other circuits. Those fancy virtual circuits are all well and good, but many experts believe the key is prioritization schemes in customer premise equipment. Don't default your WAN design and traffic modeling to the carrier.

3. Finally, tell carriers that preset minimum annual expenditures that rise each year of a multiyear contract don't make much sense anymore - even without IP convergence. Here's the long-distance carriers' dirty little secret: By federal mandate, every July 1, the access charges they pay the local exchange carriers go down. So quite possibly you ought to be paying less, not more, even if your voice traffic never migrates.

Rohde is a senior editor with Network World. He can be reached at drohde@ nww.com.

Special report: There's no stopping IP
A look at IP convergence. Network World, 8/10/98.