Features – Voice Over Internet Protocol (VoIP) Opportunity Arises

Chris Hayes is CEO of CourtEXPRESS, a national and international court access and document retrieval service using leading-edge Internet and telecommunications technologies. He uses Skype to communicate with his branch offices.


You could be telephoning your colleagues over the Internet much sooner than you think. Peer-to-peer telephony may be the “killer app” for 2004. At least one software developer has found a way around the stumbling blocks that have kept Voice-over-Internet-Protocol (VoIP) applications from widespread use.


A new application from Skype, a virtually unheard of software company, lets you set-up and start using your computer network as a telephone system in a matter of minutes. That is a major breakthrough in the VoIP field, especially when you consider that big-name vendors have invested millions of dollars and worked diligently for years to turn PC networks into telephones.

The Skype application is not the ultimate voice-over-Internet product the world has been anticipating. In actuality, some people would argue it is not a real VoIP application because Skype does not use telecommunications industry’s VoIP protocol standards. Furthermore, the product is still in test-mode, i.e., “beta,” and is being tweaked fairly frequently.

Still, protocol technicalities and beta version aside, Skype is a breakthrough because the average computer user can make it work. VoIP is complicated, very complicated. It involves protocols, gateways, gatekeepers, translators and numerous other software components that must work together smoothly if voices are to be carried from one PC to another. Setting up and using most VoIP applications, especially with a local area network (LAN), requires professional technical skill and most law firm IT departments do not have time to play with a new, unperfected application. As a result, few people ever see the technology in action to appreciate its value, and fewer still want to be the first to invest money in it.

Skype is easy to install, simple to use, and—it works! That’s why it is so exciting. It can give you a taste of the telephony capabilities to come and, maybe, even a desire for the applications that are available today. Most of all, it lets you try VoIP without a major investment of money, time or brainpower.

Get the feel for IP telephony.

Getting a feel for Internet telephony is important because VoIP offers a wealth of possibilities for the future. Potentially, it could cut telephone costs and support new types of communications. It cuts costs in three ways: (1) bypassing the Public Switched Telephone Network that charges by time and distance in favor of ISP networks that charge flat monthly fees, (2) using resources only when conversation takes place (as opposed to “keeping the line open” even when the conversation falls silent) and, thus, permitting more calls to take place simultaneously, and (3) enabling a single network to carry both data and voice, thus reducing equipment and management requirements.

It supports new types of communications by combining Internet applications and web-sites with human voices. That means people can collaborate online more easily, whether they are working together on a brief or working with a realtor online to tour offices space in another city. Outside the law office, it means customer service representatives can interact with customers more readily, which should advance E-commerce.

Free long-distance calling.

Free long-distance calling. Some of those savings are already available with Skype. Skype lets you call a colleague in another office for free (at least for now it is free). Free calling between your branch offices and your international offices can mean major savings for law firms. And free calling from an attorney’s home to his or her colleagues in any of the firm’s offices is another convenience.

To use Skype, you download the software from the Skype web site and setup a screen name. Skype cross-references your screen name with your IP address in their database, so you don’t have to remember long strings of numbers. Next you enter the screen names of people you want to call and Skype does the cross-reference for you and loads them into your personal directory. Currently, people have to give you their screen names, since no master directory is available. Finally, you plug in either a headset or a microphone and set of speakers to complete the set-up.

How does it work?

To call someone, you open Skype’s simple Instant Messenger-like dialogue box, and click on the screen name of the person you want to call. A dialogue box pops-up on that person’s screen showing your name and a telephone icon and his or her PC emits a ringing sound. When the person you are calling clicks on the telephone icon, the two of you can talk as through you were using a standard telephone.

Since its release in December 2003, some six million people have downloaded the program and it is not unusual to see nearly 200,000 people online at one time. Skype is the same company that developed the wildly successful Internet-based program KaZaa that so many teenagers use to share music files, and it is obvious Skype is applying the same attributes of good timing, technical savvy and smart marketing again.

Timing, technical savvy and smart marketing.

Skype’s timing is good in terms of the current state of VoIP. The Internet was not originally designed to carry data and voice communications, and many of the components within a network needed to mature before IP telephony could advance. Call quality has been a problem. Voice traffic is subject to line drops, delays, echoes, and a choppiness referred to as “jitter.” Broadband networks go a long ways toward resolving those problems. Over DSL or cable networks, call completion rates and sound quality approaches that of “POTS” (plain old telephony systems).

Skype leveraged its technical savvy in using KaZaa’s “peer-to-peer” protocol technology. The peer-to-peer protocol permits individual computers to communicate directly, rather than requiring the resources of a server. This is good news and bad news. The good news is that it works, and as you add Skype users to your network you are adding power, rather than draining the resources of a centralized server. The bad news is that the peer-to-peer protocol is not recognized by the International Telecommunications Union, which has established two protocols (H.323 and SIP) as the standards for the industry. Vendors using the approved protocols are more assured of being able to connect to telephones and telephone networks as well as Internet in the future. It remains to be seen whether the industry will accept Skype’s protocol (a client-base of millions will be hard to ignore) or whether Skype will evolve its technology and become more mainstream.

Skype has also overcome several problems that other major vendors have not, namely, firewalls and interfaces. Skype operates behind the firewall, which has been a major stumbling block for larger VoIP applications. In addition, Skype has developed simple Instant-Messenger-like screens for using the application. Teenagers immediately recognize the icons and the rest of us understand them easily as well.

Skype wisely opted to keep its functions simple. It does not work over traditional telephone networks, and it does not work in conjunction with telephones. Further, the person you are calling must also have the Skype software. This limits usage, so you will still need your existing telephone system for some time to come. Meanwhile other vendors are tackling the really difficult areas of connecting standard telephones to Internet networks and switching communication between the Internet and the PSTN, the two areas that make VoIP so complicated.

In a smart marketing move, Skype has made its telephony application available for free. It has attracted a large client-base by word-of-mouth or “viral marketing” as Skype likes to call it. Such a large client base provides Skype with the customer feedback needed to quickly wring out glitches caused by differences in hardware configurations, operating systems and networks. That makes for a more solid product.

Free distribution over the Internet has provided Skype with the market share that a new application needs in order to do battle with the major vendors in the field, including Microsoft, Nortel, Cisco and others. Skype has left open the option of charging for calls in the future, but for now it remains free. The Federal Communications Commission has exempted Internet Service Providers (ISPs) from the fees for providing voice communications, but that could change in the future, and the FCC could add a small level of unknown costs to VoIP.

The future.

Think of Skype as a periscope into the future: it is a small application that can give you a picture of what is to come. As VoIP evolves, we get closer to combining voice, data and images to give us, essentially, personal TV-like connectivity with each other. One day, we will surely have the wireless, two-way, wrist-TV that Dick Tracy* started using in the 1930s.

Dick Tracy, created by Chester Gould in 1931, is drawn today by Dick Locher and Michael Killian. Dick Tracy is a registered copyright of Tribune Media Services, Inc. All Dick Tracy artwork is copyright Tribune Media Services, Inc. 2000.

Posted in: Features, VoIP