AT&T Corp. has finally found an answer to an elusive question: How can it access the last mile needed to serve millions of U.S. households with telephone service?
After spending billions of dollars acquiring — then divesting — the vast cable properties held by Tele-Communications Inc. and MediaOne Group Inc. in an attempt to gain last-mile access, the long-distance giant is now rolling out a voice-over-IP service to reach out to — and retain — local and long-distance phone customers.
Because the service rides over digital subscriber line and cable-modem networks, and will be available to existing broadband subscribers, the expense of local network access for AT&T is, effectively, zero.
AT&T's service will be similar to that of Vonage Holdings Corp., which has attracted about 100,000 customers to date after two and a half years in the market.
Announced in December and slated for rollout early this year, the AT&T service will be based on Session Initiation Protocol (SIP) call signaling, also the foundation of the Vonage service.
AT&T is in the process of transitioning its IP voice network from a media gateway control protocol (MGCP)-based IP network to SIP, which is touted as a key strategic technology that offers lower operational costs for IP services.
The basic premise of SIP is that it puts the intelligence of IP services at network endpoints, allowing for the rapid adoption of new features. According to AT&T Laboratories vice president of global network development Clayton Lockhart, SIP is the underlying communications protocol between the various gateways, application and call-control servers of AT&T's IP voice network.
This contrasts with cable's PacketCable IP voice architecture, which uses MGCP for call control.
"The industry in the last few years has really rallied behind SIP," said Lockhart, noting that hardware silicon reference models and software with SIP stacks are finding their way into telephony devices.
In theory, with intelligence placed at the endpoints of a SIP-based telephony network, the middle network can essentially be a "dumb" network — much like how the Internet functions, explained Vonage executive vice president of product development Louis Holder.
"What HTTP [HyperText Transfer Protocol] is to the Web is what SIP is to a voice-over-IP telephone network," said Holder.
A SIP-enabled phone performs all the network connectivity functions, Holder noted — much as a Web browser does when retrieving Web pages. This allows Vonage to scale its service easily without network upgrades, "deploy services a lot cheaper and hence offer low-cost toll services to your customers," he said.
Of course, SIP IP voice-service providers don't have to worry about last-mile access networks. That's left up to the telephone and cable providers.
The AT&T service will utilize a SIP-enabled terminal adapter for the customer premises, which connects to a DSL router or cable modem and a phone. The device, which is being provided by undisclosed manufacturers, has been engineered for self-provisioning.
"The average time for installation is about 10 minutes," said AT&T Consumer senior vice president of product management Cathy Martine. At the other end of the network, application servers with SIP "servlets" execute telephony-based services and advanced call-routing functions, according to Lockhart.
AT&T began experimenting with consumer VoIP last year, with three trials in New Jersey, Georgia and Florida involving about 1,000 people, according to Martine.
The trials will wrap up at the end of this month, when AT&T is expected to announce its market rollout plans. The service will provide unlimited local and long-distance calling.
Pricing details have not yet been disclosed, although Martine said rates would be "competitive" with the current market.
Vonage's unlimited calling plan sells for $34.95 per month.
AT&T's calling features are managed by users via a Web interface, and include voice mail with email capabilities (voice mail can be played back on a computer and emailed as an attachment), a "do not disturb" feature that sends calls made during a specified time straight to voice mail, voice conferencing and call forwarding.
MORE FEATURES DUE
Expect more complex features to be introduced. "We have many features that are in our lab that are under evaluation and development and usability testing with customers," said Martine.
One feature being tested in trials (but not expected to be part of the initial rollout) is a "switched phone" feature, which allows a user to switch from a wireline phone to a wireless while still maintaining a connection. A conversation initiated on a home VoIP phone can be transferred live to a cell phone and be transferred again to an office desk phone as the user moves from home, to car, to office, for example.
Connection to a wireless 802.11x Wi-Fi (wireless fidelity) network is also in AT&T's plans. Martine acknowledged that AT&T is in active discussions with Wi-Fi providers, but wouldn't share any details.
"One of our competitive advantages is to pull rabbits out of the hat," said Lockhart. That may have cable engineers scratching their heads to come up with their own SIP voice client.
Holder believes SIP gives Vonage an operational advantage over the PacketCable specification.
Because SIP is an HTTP-type protocol, it can be used to transmit video and data, instant messaging, text chat or PowerPoint presentation data — the signaling is the same regardless of the type of data transmitted.
Additionally, the Vonage SIP network does not use a soft switch, like the PacketCable VoIP standard, but relies on servers placed along the network or within customer-premises equipment to perform soft-switch functions.
For example, call waiting for the Vonage service is executed in the customer-premises box. For quality of service (QoS), the Motorola Inc. VT1000 terminal adapter box gives voice the priority over data traffic via hardware, according to Holder.
But PacketCable and SIP are not mutually exclusive, said PacketCable director Glenn Russell. He pointed out that "you can offer the same [telephony] services with both protocols."
The Vonage service offering, he said, is similar to the basic, cable IP voice residential service offerings introduced by Cablevision Systems and Time Warner Cable.
Russell conceded that long-term, SIP is probably a better, more extensible protocol for advanced features that involve integrating with smarter endpoint devices than simply a telephone, such as a box that can display video. But for basic telephony features, "you can do them in SIP, you can do them in MGCP," said Russell.
He noted out that the PacketCable Multimedia specification defines how to get access to QoS, security and accounting over the cable network, so other signaling protocols, including SIP, can interface to the cable-modem termination system through a policy server and request QoS for a client, including a SIP client.
Based on vendor development and MSO experimentation, Russell said that Cable Television Laboratories Inc. may consider adding more hooks to integrate SIP with the QoS in the PacketCable Multimedia spec.
Meanwhile, cable engineers will watch as their precious upstream bandwidth is utilized for Vonage, and, eventually, AT&T voice traffic.
For AT&T, the vision of last-mile access enunciated by former CEO Michael Armstrong is finally close to reality, albeit in dramatically different fashion.
"We've said for a long time we're access agnostic," said AT&T media-relations director Gary Morgenstern. "We needed to find a way to get around the bottleneck that the Bells have created with the last mile."