Vonage goes to the video

Internet phone service provider Vonage will sell videophones and a videophone service sometime before the end of March, its chief executive said Wednesday, stamping an important imprimatur on a market once derided by comparisons to the futuristic TV cartoon "The Jetsons."

Vonage Chief Executive Jeffrey Citron didn't provide an exact date for the service's debut--first quarter 2005, he said--nor did he release pricing details. For a general idea on what a Vonage videophone service might cost, one can look to videophone provider Packet8, which sells unlimited video calling for $30 a month. Packet8 videophones, which have embedded cameras to capture the caller's image, come heavily rebated.

Vonage has partnered with broadband video equipment maker Viseon to develop the videophone. Vonage will release a videophone that resembles the VisiFone II, a phone developed by broadband video equipment maker Viseon. The VisiFone II debuts in January.

Videophone service is the latest add-on from Vonage and other providers of VoIP--voice over Internet Protocol--a cheap telephone service in which phone calls use Internet Protocol (IP) to travel over the public Internet, or privately owned high-speed networks based on IP. The calls are much cheaper than traditionally placed ones mainly because of IP's efficiencies, plus most IP calls have so far avoided regulation, while traditional phone companies must collect fees and taxes from their customers.

VoicePulse, another VoIP provider, is also planning to add a videophone service "very soon," a spokesman said. He said details were not available.

Videoconferencing over broadband is very small market. By year's end, revenue from sales of video-calling gear will be little more than $40 million, though that adds up to a 23 percent annual increase from last year, according to analysis company Point Topic.

But Citron said recent developments in chip designs and videophone manufacturers coming together over standards has helped drop equipment prices to much more affordable levels. Also, he adds, broadband connections are becoming fast and reliable enough for the service.

"Historically, it's not a product we were interested in," Citron said. "The quality wasn't great, there wasn't a reliable enough network, and it was incredibly expensive. We think those barriers are being eradicated."

Wake up and smell the Coffee !!

Voip is far less efficent the TDM voice technology. In fact is uses somewhere in the range of 90kbps compared to 64Kbps for traditional TDM. Voip providers like Vonage are really using someone elses network and not paying for it. ISPs pay big dollars for internet egress and design their networks to handle traditional TCP/IP traffic. Voip providers like Vonage today attempt to utilize the ISP network for their voice type service without paying a cent. This is a crime as it forces ISPs to pay for more network egress which reduces their profit margins and in the end will increase the rates customer will have to pay for high speed access. Folks like Vonage will only last so long until ISP wake up to the fact that Vonage is really making heavy margins or the services that the ISP is providing without compensation. Soon better the later I hope for the good of our national TCP/IP infrastructure and the unknowing customers which will end up paying for it one way or the other.

[Dachi]

Bandwidth

Actually P2P traffic, worms, spam, and spyware consume our bandwidth. The phone is going to use H.263 and H.264, which are not bad. And unlike the previous items, the phone requires the user to decide to use it, rather than constantly happen in the backround which makes all the difference. You would think that web traffic would make up most of our bandwidth, but it is only a small fraction (maybe ~15%). We like VoIP because the lower phone bill makes the $40+ cost for broadband seem more reasonable.

AOL+Phone = $24+ $56 or $80
Broadband + VoIP = 40 + 17 or $57

If they need a backup line everyone has cell phones now anyway.

And if we want to reduce bandwidth, we could start by reducing the number of unpatched windows boxes on our network with ~15 different worms just pounding the network. We started offering free AV software in hopes of trying to combat this.

Besides, bandwidth is getting cheaper anyway. 53k dialup will begin to go the way of the dodo bird.