Can the Red Sox go all the way?

I’d walk through hell in a gasoline suit to keep playing baseball.Pete Rose

Dear Vorticians,

As I write this, my beloved Red Sox are on the verge of elimination from the American League Championship Series, down three games to two to the Damn Yankees. Myriad long-time Sox fans would gladly don that high-octane leisure suit for a stroll through the underworld if only the Boston team could keep swinging. But the hot-hitting Bosox have gone tepid and some local wags have even crafted Web pages that spoof the slumping players by showing their faces on the sides of milk cartons. “I’m Nomar Garciapara, have you seen my game?”

Well, I’ll keep my fingers crossed. But my first duty, gentle readers, is to you, so I must soldier on.

Last week’s piece on Skype and other voice-over-IP threats to incumbent carriers drew a good deal of mail from readers, which I shall share momentarily. There were also a couple of good pieces on the topic in other publications. For example, the Wall Street Journal had a front-page piece on Oct. 9 titled “Battered telecoms face new challenge – Internet calling.” I’d link you to the piece, but it’s a paid subscriber site.

Here’s an excerpt: “Sales of Internet phone systems to businesses are expected to more than double this year, even as most capital spending on telecom equipment remains stagnant. And the service is winning lots of fans in the residential market, as cable companies offer Internet calling over their own networks and a host of tiny start-ups offer low-cost, or even no-cost, plans.

“This newfound success has sent shares in VoIP companies skyrocketing — and sounded a warning to established telecom operators. Internet phone service is almost completely unregulated for now and requires little capital, and the improvements in technology make even the smallest start-ups a credible threat. So, some of the top names in telecom are testing their own Internet phone offerings to make sure they don’t get locked out of the new market.”

My own publication, Network World, also ran a story titled “ILECs answer VoIP phone threats,” which you can check out for free any old time you like. Click on:

https://www.nwfusion.com/news/2003/1013skype.html

In response to last week’s VORTEX Digest, Vortician Andy Voss wrote: “I didn’t bother to reply after the first message about Skype but this one is over the top. Skype seems OK to me, but I don’t understand all the excitement given that free PC-PC VoIP calls – with not only excellent quality but speakerphone capability – have been available via Messenger in Windows XP for about two years.

“The soft phone is in Messenger, anyone can sign up for MS Passport and call any other user, no charge. They even had provisions to allow calling off-net to PSTN subscribers via VoIP carriers, something which I think Skype has recently announced.

“In short, Skype invented nothing so far – not a concept, not a technology, not a business model. In fact, whereas MS was using SIP, I think Skype may be proprietary. I don’t love MS and I don’t compete with Skype. My objective opinion is that, so far, Skype is mostly about hype. That’s standard business practice in many industries, but I always liked to think that people in the networking industry were a bit more critical in their thinking in order to distinguish real advances from packaging, taking credit for someone else’s work.”

Vortician Tom Nolle had similar feelings about Skype, writing: “I don’t disagree that VoIP is disruptive, but I’m not sure that we’re overlooking some key points. Napster generated a lot of nice copy for the media, but they also dumped. There cannot be a ‘revolution’ where the consumer gets everything they want for nothing and the provider capitalizes to make it happen.

“Free anything is not a business, it’s a scheme. The impact isn’t as much on the big telcos, as you suggested, as on the smaller startup players. Pulling the financial rug out from under VoIP doesn’t hurt the big guys much; the trend will pass as the players emulate Napster. It will make it nearly impossible to get backing for a new voice venture, though. Want to know who is hurt by free IP voice? Vonage.”

Vortician Brad Templeton took me to task on my wording of the situation. “Why do you call it the ‘VoIP threat?’ A lot of people would call it the VoIP opportunity.  Customers in particular, but suppliers and new telcos, too.”

Good point, Brad. Finally, Vortician Peter Bernstein broadened the discussion by writing: “Check out www.buddy-line.com, and www.pulver.com (Jeff’s FWD service).  The hills are alive with VoIP, incumbents beware.”

That’s plenty for this week. Share your thoughts with me by writing to jgallant@vortex.net. And pray for the Sox!