Will Google Kill Telecom?

Thanks Mashable!

This is Part 1 of a two part series on Google Voice in Canada. Part 2 will theorize on what the impacts will be on Canadian Telecom when Google offers Canadian phone numbers.

This week’s announcement of Google Voice integration with Gmail, with free calling and free long distance is perhaps one of the most controversial moves yet by an Internet company to change the telecom industry. Free computer to computer calling (a la Skype) isn’t problematic, it’s when free extends to long distance and calls to to the PSTN (public switched telephone network) that the Google service gets spooky.

Telecommunications companies around the world continue to invest billions of dollars into *the last mile*, that’s the distance from your house back to their closest switching office. Folks with a regular telephone (as opposed to a VoIP phone) rely on that last mile to make and receive telephone calls. Despite pushes to move everything to the Internet, that last mile is going to be important for a long time to come. 

If Google is offering free calls to the last mile (this is called call termination), you know they aren’t paying [hardly] anything to the carrier who is actually providing that last mile call termination. They’ve managed to strong arm someone into offering it at no charge, perhaps in exchange for some other service.  Where it gets very spooky is with Long Distance Termination. Again - free over Google, but there is a real and true cost to terminate a call to a standard telephone in Canada and the United States.  If no one is paying for that call, then the local carrier is losing money, and has less revenue to be able to maintain their local telephone network.

:-(

Let’s look at an example:  I called my PRIMUS phone from Gmail. The call routed from Google, through Verizon, up to Allstream, and then down to Primus. All for free to me. Perhaps Google did indeed pay Verizon something, who had to then pay Allstream, and lastly Primus. And this is the call flow for a VoIP call, where most of the routing bypasses the local mile of infrastructure, since my Primus phone is layered on top of my Rogers Broadband connection. Confused yet?

If I call my Bell phone line from Gmail [yup, 2 carriers in this house - diversity and redundancy is important with 2 teleworkers under the same roof], the call still starts in the US, at Google’s data centre, heads off to Verizon, up to Bell Canada, and then down my little copper wires from the Richmond Hill Bell wire centre. If there’s no costs to the user [me], then there are no revenues flowing to Verizon to maintain their interconnection with Bell, and no revenues to make sure my little copper wires from the Bell wire centre stay nice and healthy, or get upgrades when needed. At some point, in the not-too-distant future, there won’t be any money left to manage, maintain and upgrade the public telephone network.  That’s all well and good if EVERYONE in the world has migrated to VoIP service over Broadband Internet, but not so good if you are a carrier who has to maintain 2 networks, one for VoIP and one for the public telephone network. It’s certainly bad news if you have to rely on the public telephone network for your phone services.

At some point, carriers will realize that getting into bed with Google is going to destroy the telecom industry. Everything will be free, for a while. Then everything will be bad, very bad.  Right now, Google can only offer outbound free dialling from Gmail. Just wait until Google gets its hands on Canadian phone numbers. I can only hope that it won’t be a free service too.

Why Unlimited is Bad

Unlimited is bad. For everyone. Full stop.
In 1997, unlimited dial-up internet was the marketing trend du jour. It took less than 2 months for the dregs of society to ruin it for the rest of us. Dregs, you say? That’s a terribly harsh description. No - folks figured out that if you could keep your modem connected 24 by 7, you could run a web server, share your unlimited internet connection with all your friends (rent your internet connection, even), and generally take advantage of unlimited usage. The whole purpose of *unlimited* is to reduce the customer’s fear that they might exceed their maximum static plan in the course of reasonable and normal usage. It’s “not” to give someone carte blanche to take advantage and exploit the service and the service provider. There’s a reason why unlimited dial-up service was $19.95/month, but dedicated, nailed up, always on service was over $500/month ;-)

It seems that marketing folks never learn from their mistakes. Unlimited is bad. Dregs will always try and exploit unlimited offerings with the argument of “unlimited is unlimited - I want to use it all!!!”

It’s hit the cable internet folks, the wireless folks… heck, even the food industry. We are, on average, a species that is unable to control ourselves when it comes to unlimited :-)
Someday, marketing departments will realize we aren’t wired to be reasonable.

The Death of Voice - Long Live Voice Telecom

In late 2001, many of the Canadian telecoms purged their staff of experienced folks who could support traditional voice technologies — 800, 900, casual calling, calling card and other TDM based legacy systems. The theory was that VoIP would soon usurp TDM, and who wouldn’t want VoIP?
Needless to say, many - if not most, of the business and enterprise customers weren’t ready to make the leap to IP Voice.  As it turned out, many of the carriers weren’t as ready as they thought either.

Now, the remaining industry experience is reaching retirement age, with no *junior* experts to fill their roles in the coming few years. Where does that leave the customer? Making a jump to an immature technology? Sticking with a service with limited support?

Ten years ago, I was an Internet and Data specialist. Now - I’m a budding voice specialist, simply because there wasn’t anyone else who knew the answers to the questions I was asking about TDM based voice services. The internet can only help you so far in setting up a 900 network :-)
I’m looking forward to VoIP replacing carrier networks.
The NGN network deployments across Canada are expanding.
I can dream about the SMS-800 database taking on more of a DNS-like quality.

Until that time, I’m going to be using access tandems, term numbers and buddying up to the last remaining TDM voice talent in Canada.

Slamming Canadian Telecom: Canada's Second Favourite Pastime

We are a whiney bunch. Full stop.

If it’s not the weather, how rotten our sports teams are or how miserable our government is, we’re bashing the hell out of any and all Canadian telecommunications companies for their crimes, real or imagined.

It’s so very ingrained in us, I’m not even sure Canadian consumers know exactly why they’re whining and complaining any more. It’s just a habit now.

• If you were in London, UK, you’d be paying ~$60/month for average broadband internet. (40 Gb of data transfer and up to 20 Mbps of download speed)
• If you have an unlimited cell phone plan in France, that’s going to cost you $135/month, and that doesn’t include a data plan.
• If you’re in the US, and want to go with Verizon, you’re going to pay $115/month for 900 minutes of talk time, unlimited texting and a data plan.

All these prices have been converted to Canadian dollars.

You want to gripe about choices and competitive options?

Almost anywhere in Canada, you have upwards of 6 or more choices on who you’d like to have take care of your communications services. Big guys, small guys, and middle size guys are in the communications business.

Wireless carriers in the US? AT&T, Verizon, T-Mobile, Sprint and and a handful of others. The trick is that they may not all be national, and a few of them I’d never heard of before. The other popular trick —- smaller guys launching a wireless service that’s overlayed on top of one of the BIG 2. Optical illusions :-D

I’ve been with 3 different wireless carriers, never had a billing problem yet.

Same for Internet Service Providers and TV service providers. Sure, the odd call into customer service, swap out a PVR because it’s gone wonky. Bing, bang, boom. Problem solved.

We are a very hard bunch to satisfy. We’re demanding, mean, threatening and fickle. Maybe we should be fired as customers instead?