IP telephony: an attractive option for doing business in Alaska: where is there a better test...

It "all began with a call What better way to start a feature on Voice over Internet Protocol--the art of turning your voice into data that can travel over the Internet, then turn back into voice at the other end--than with an IP phone call? Don Eller of Yukon Telephone Company Inc. called me

When we think of software, we often think drivers. The most important drivers for IP telephony in Alaska right now are its business drivers.

Advantages of VoIP include reduced costs for communications equipment. "It tends to be cheaper than traditional voice networking products and also is easier to manage," said Eller, general manager.

VoIP also enables new services like multimedia applications, VoIP phone on PC and better measurement of quality of service. The FCC also wants VoIP because its service providers are exempt from analog telephone regulations, which the FCC eyes as being a good thing.

"With specific relevance to rural Alaska, there are now IP-based satellite systems that enable the delivery of voice services to remote areas much more cost-effectively--and with better voice quality--than traditional voice satellite networks," says Eller. Yukon Telephone has demonstrated the technology's effectiveness in the Yukon. The company is eager to bring the service to market.

According to Alaska Communications Systems representatives, Alaska businesses often have headquarters in the contiguous 48 states that they need to communicate with. Alaska businesses also carry on a great deal of international communications with Alaska being a big stopping point for business traffic from the Orient.

It is also easier for Alaska businesses to justify the cost of adding data networks when they can add one network for voice and data using VoIP, rather than adding two.

APPEAL TO ALASKA BUSINESSES

Alaska can undercut communication costs by using IP telephony. "IP satellite transport is available as a commodity. The monthly operational price difference in the satellite transport systems is typically an order of magnitude and voice and data run seamlessly over the IP network," says Eller.

You don't need to have different facilities for voice and for data and for Internet and so on. This creates a savings that can be passed on to the Alaska business consumer.

"During the Internet bubble of the early '90s, the catch term convergence was worn into the ground; the idea was correct, but the technology to implement the concept was not. Technology has caught up to the vision and it's ready to implement if the appropriate regulatory bodies allow it to happen," says Eller.

MORE ON VALUE

Significantly lower business call rates, value added services not previously available, increased productivity and Internet roaming--taking your phone and number to wherever the Internet exists--are more than enough value prospects to interest and excite local enterprises.

Applications that can be run on these handsets are just beginning to develop but also will present value.

CASE EXAMPLE FROM ACS

Alaska Pacific University recently implemented VoIP. Already having Centrex phones, the value for them was to simplify the adds, moves and changes process.

"With VoIP you can unplug the phone, take it to a different building, plug it in and the phone is up and running, the system knows whose phone it is, and you don't have to go through the adds, moves and changes process that you did before with PBX or Centrex. You retain the same phone number," says Andy Coon, director of business sales aim service, ACS.

You can already hear the difference.

A percentage of long-distance business calling is already onboard the IP train. Other businesses use IP telephony over internal networks. "Many service providers, including Yukon Telephone, have already begun to deploy VoIP services," says Eller.

TIME FRAME

For most businesses in Alaska, VoIP is an emerging technology. Some leading organizations are using this technology. "South Peninsula Hospital, Alaska Southcentral Foundation and others are using the technology, but by and far it's in limited use today. Most companies are looking at, over the next one or two years as this technology develops and stabilizes, they are going to migrate to it," says Coon. Coon believes it will be a standard in two years.

WHO'S CALLING, PLEASE?

Long-distance providers use IP telephony to reduce the cost of state, national and international long distance. "Local telephone companies are also starting to deploy VoIP," says Eller.

(Yukon Telephone has had VoIP technology from MetaSwitch deployed for a year now and is one of the companies leading the adoption of the technology in Alaska.)

"Many of our own subscribers currently have telephone service that is delivered over a VoIP network. In fact, we participated in a seven-month field trial to prove the technology, that led to MetaSwitch recently being accepted as the first (and still the only) VoIP switching equipment eligible for service providers to purchase with subsidized loans from the federal government's rural utilities service program," says Eller.

The technology is very appealing to small business, but it is expensive for small businesses and those that are remote, which you have a lot of in Alaska. According to Rich Hanlin, sales manager of complex opportunities, ACS, VoIP is not even close to the 5 9s of reliability (99.999 percent reliable) when you are going over satellite.

WHAT WAS THE BIG SELL FOR ALASKA, REALLY?

All of the cost efficiencies we've already listed and discussed, together with the new revenue streams born of VoIP deployment, have carried Alaska business phone customers over the line into the yes quadrant on the VoIP service question. Nonexistent state and federal regulations mean services are deploying and pricing with very low overhead. More Alaska businesses are choosing VoIP all the time, especially knowing that deregulation won't necessarily last forever.

Some benefits discovered after use include delivering stable voice in remote areas. One customer of ACS uses VoIP with an Anchorage dial tone to support its remote offices.

VoIP PROLIFERATION

After experiencing the long list of flexible services, low ongoing costs and better voice quality, most customers are glad they switched to all digital with no signal loss.

Though some early adopters found the technology wasn't ready tot them, most new users are pleased, unaware that others once experienced problems with reliability or quality.

"We see the entire telecom industry moving rapidly in this direction. The greatest hurdle, today, for Yukon Telephone Company Inc. is not problems with the technology, but regulation. As a rural telephone provider, Yukon could deliver a greater suite of services to its customers in rural Alaska at a substantially lower cost than current services are being provided, but cannot do so due to regulatory restriction. Technology has outpaced regulation by at least five years," says Eller, not stating specifically what regulation remains to hinder progress.

IN THE FUTURE

The customer has to have a broadband connection for VoIP to work, says Coon. "The business customer could have a home product running over their cable modern or I)SL (digital subscriber line) connection that allows them to connect up to their office and they do many things like video conference, multitasking with others on their corporate network from home," says Coon.

Yukon Telephone's General Manager, Don Eller, Talks IP Telephony

ABM: What do Alaska Business Monthly readers need to know when considering VoIP offerings?

Eller: The most important point is that VoIP does bring about cost savings and opportunities for productivity enhancement--so all businesses, whatever their size, should be looking at how this technology might apply to them.

There are a number of different ways to deploy VoIP within any business-rn1 example, smaller businesses would likely get service directly from their local service provider, whereas larger businesses would install it them selves in their network with an IP PBX.

Either way, your existing data network may need to be upgraded to sup port the additional bandwidth and performance requirements of VoIP. Your service or equipment provider should be able to advise yon about this.

ABM: What do Alaska businesses need in order to implement IP Telephony/VoIP?

Eller: You need an IP network for your data that is up to the task of also transporting voice. In addition, you need VoIP equipment, which could range from a small telephone adapter that allows you to plug a regular phone into an IP network, to an IP phone, to a full-scale IP-based PBX.

Most importantly, you need a partner--either your local telephone service provider or equipment vendor--that understands the issues and can help you make the right decisions.

Comments from ACS on Considerations Before Getting VoIP

The most important thing is to realize that your LAN (local area network) and WAN (wide area network) infrastructure in many cases need to be rebuilt to support the quality of service required for VoIP said Andy Coon, director of business sales and service, ACS.

If you are going to manage and maintain the systems yourself, you have to have a very high level of internal IP engineering resources or you have to work with a provider that has those resources, said Rich Handlin, sales manager of complex opportunities, ACS.

"We do an initial network evaluation and a go-forward plan on the network," said Hanlin. "We" provide design, implementation and we can package in management and make it a turnkey package if they want that."

"Our internal engineering resources are among the best in the state," added Coon. "We have a QoS (Quality of Service) internal to our core and extending out beyond to the service level agreements on our backbone and to our commitment to our customers.

"When using something like VoIP it is as intricate to their business' success as it is technically to their dial or data. Should they incur any downtime, their business stops," said Coon. "That's where our dedication to the customer comes in, in that we realize every minute counts. The people we have on staff and our transport amounts to their livelihood."