The increased popularity and use of Voice over IP has not only sent shock waves throughout the communication industry, but has also brought about major changes and improvements in other service industries, as well. Providers of internet and cable services already have the necessary hardware and clients to become major players in the VoIP business. Telephone, internet, and cable providers are fighting tooth and nail to attract new clients, but more importantly, retain current ones. However, competition is not something new in the communications industry. Over two decades ago Judge Harold Greene broke up AT&T for alleged violations of antitrust laws. It was at this time when the major telephone companies were broken down into smaller, regional players providing long distance services. With the birth of VoIP, not only does a tremendous opportunity exist for companies such as AT&T in its current state, but it also creates a major problem. This new technology threatens to end the need for long distance carriers, something that many telephone companies rely on for a major portion of their earnings. Why would any person, or company, pay for these long distance services from traditional long distance carriers when bills would be much lower using web based carrier such as Vonage, SunRocket, or others.?[1] Unfortunately for the AT&T's and Verizon's of the world, people are starting to see the changes and are willing to adapt to the new technology to save money. Forunately for these same companies, they too see the business model trending away from their services, and are launching services to take advantage of the new web-based services. Thus, they have not entirely missed the phenomenon for their prices are competitive, but they are certainly behind the major cable companies in terms of market share.




As previously mentioned, the VoIP phenomenon has thrown gasoline onto an already heavily competitive fire with the major players being Verizon, Comcast, AT&T, Time Warner, Cox and newer more specialized players, Vonage, SunRocket, and Skype. Whether the companies are looking to provide three major services,telephone, internet and cable, or some combination of the three, they are looking to take advantage of a web-friendly society that already has the necessary wiring to utilize VoIP. In a New York Times article from this past weekend (24 November 2006), the “Bells,” which were the very same regional companies created when Judge Greene broke up AT&T, were pitted against Time Warner and Comcast who “have the technology, armies of installers, and marketing budgets to lure away video and phone customers.”[2] As of September, of the 8.2 million households in the United States that used web-based phone services, 5.1 million were through cable companies such as Time Warner and Comcast. [3] Comcast currently offers a $99 plan which includes its basic cable and internet services, but more importantly, unlimited local and nationwide long distance. [4] Not only is this service offer cheap, it might be more about convenience that wins the customer over. Due to these numbers and the fact that the cable companies have positioned VoIP as an additional service, the telephone companies face a severe uphill battle going forward. This is evidenced by stories inked in that same New York Times article about a battle for market share in the growing market of Phoenix, Arizona. Cox Communications, the major cable provider, has stolen roughly one-third of telephone provider Qwest's telephone business. Because of this, both companies have lashed out at each other through sabotaging each other's work, and taking their gripes to the state's political powers in hopes for some sort of friendly resolution. The article speaks of Cox not only battling Qwest in Arizona, but also having similar disputes with AT&T and Bell South in other areas of the country.





Although VoIP has been used through the cable companies of Comcast and Time Warner, other smaller more specialized companies such as Vonage and SunRocket have made a significant splash. These companies have been successful and continue to grow because they are able to charge very low prices to consumers, as they take advantage of technological capabilities already installed in the home or office, a broadband internet connection. For as low as $24.99 per month with Vonage, and $24.95 per month with SunRocket, customers can make unlimited calls within the United States, Canada, and Puerto Rico.[5] [6] Away from the home, Vonage also offers great deals to small businesses in hopes of capturing a share of that market. For 1,500 minutes per month including many features a business would need including voicemail, caller ID, call forwarding, call waiting and others, Vonage only charges $39.99 per month. For an additional $10, Vonage offers unlimited minutes and the same additional features. This is an attractive offer for any small business as costs are low, and fixed. A similar service to Vonage and SunRocket has also become popular for it has changed the entire landscape of international calls. This service, Skype, is as close to free as anyone can get. When a user calls another person's cell phone, there is a small charge incurred that is debited like a calling card. A user in the U.S. can call a cell phone in Italy for under 2 cents per minute, or South Africa for under 7 cents per minute. Their rates vary depending on the destination of the call, but it is cutting into the profit margins of major phone carriers at alarming rates.[7] This has become a major trend on college campuses as many users use it primarily as a free service when they call from computer to computer. Even though there are small fees associated today when calling a cell phone, many have remained loyal and stuck with Skype to buck the traditional telephone system.







In the end, for most households, the technology and capability to use VoIP is already in place. As people become
more knowledgeable about the advantages and savings they can enjoy with VoIP, and as the services themselves become
more reliable and popular, it will only be a matter of time before everyone is taking advantage of the phenomenon, whether
they know it or not. Soon enough down the road, the traditional operator and telephone line service that Alexander Graham Bell created for us will no longer be used. [8] Almost everything we use today is web based because it is fast, relatively cheap, and very efficient. The cable companies such as Comcast and Time Warner are in the best possible positions because they are the major internet providers. They have received the lion's share of the VoIP business, and unless they kill themselves by over-pricing their current clients, will continue to pick up more customers from the traditional telephone line providers.

To experience the power of Vonage, please click here. [9]

For more on the pros and cons of VoIP, please click here.





(8) All images available online: http://www.wikipedia.org/

(9) Video available online: http://youtube.com/watch?v=sK9dXT3qHpw&mode=related&search=