The disruption potential of VoIP lies not so much in its ability to push down the cost of telephone service than in its ability to get consumers to ignore the telephone business altogether. The nature of the Internet makes VoIP advantageous even after the cost of plain old telephone service goes to zero. For while the network determines all the essential features of traditional telephone service, from audio quality (low) to addressing (telephone numbers), the Internet asserts few constraints on VoIP services or devices. Thinking of communication solutions as an extension of the web and implementation as hosting can help break the grip of the telephone myopia reflected in most VoIP business plans.

Framing the value of VoIP as replacement for traditional telephone service makes interconnection with the telephone network seem essential, but VoIP enables communication solutions that go beyond the
“telephone call.” Think of it as viewing the telephone itself as a more efficient telegraph. The infocom industry needs to unleash new demand associated with new services. A transformation from world wide web to worldwide communication requires interconnection among VoIP providers, not the telephone network. The unwillingness of Vonage and Skype to interconnect with other VoIP providers makes no more sense than Yahoo imposing on users a proprietary browser that can’t be used to access any other sites on the web.

The voice quality of a telephone call remains inferior to even an AM radio broadcast. Low fidelity loses much of the character of voice necessary to convey mood or subtle meaning not contained in the words themselves. A telephone call remains a poor substitute for meeting in person, but demand for high-quality audio still requires an industry wide market push, as in the effort that won HD video momentum. Improving voice quality remains off the table as long as the value of VoIP requires interconnection with the telephone network.

None of the means used to navigate the Internet have analogs in the telephone world. Web site visitors can arrive by entering a URL into the browser address bar. The relative ease of remembering domain names vs. telephone numbers is difficult to dispute; a significant portion of web site visits are the result of people guessing the URLs. And compared to web search engines, both the online and offline versions of yellow pages offer very weak functionality.

Absent a requirement to connect with the telephone network, VoIP implementations can support click-to-connect and flat-rate global connections. The problem is finding a path to critical mass. The rapid growth of the web after the emergence of the browser in 1991 followed the addition of click-to-connect functionality to flat-rate global connectivity associated with Internet. The web browser set in motion a virtuous cycle of growth as expanding content attracted new audiences and audience growth attracted new content. The same process could play out with a worldwide communications model that combines click-to-connect addressing and flat-rate global termination — neither of which can be found by interconnecting with the telephone network.

Daniel Berninger is the CEO of Free World Dialup