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ARCHIVED  July 16, 1999

Internet telephony takes driver’s seat in telecom

Local telephone installers say more businesses will start using Internet telephony in coming years, but traditional long-distance telephone service will never be eliminated.

Eric Hanson, president of Vend-Tel-Co Ltd. in Loveland, described Internet telephony as a technology still in its infancy. Voice-over Internet Protocol has been around a while, he said, but the technology has been a viable option for customers for only two years or so.

“We’re not seeing much activity in this market,” Hanson said. “But outside this area, some of our business customers are putting in whole call centers on the Web.”

For example, companies that provide technical support to customers can place a call button on their Web site. A customer whose PC is equipped with multimedia functionality can press the call button and immediately connect to a customer-service representative online. The customer and the service agent can then discuss what’s on the screen in front of them.

“It’s becoming a more popular feature,” Hanson said. “The customer and agent can see exactly the same thing, so you don’t have a call center that is blind.”

Paul A. Routhier, information technology president at Vend-Tel-Co., said voice-over IP has home uses as well.

“IP is the boat that carries voice and data information where it needs to go,” he said “For instance, you can pick up the telephone to call Grandma in Massachusetts. The telephone signal goes over the Internet, and the cost is a fraction of a regular long-distance call. They’re doing that in corporate settings for about three cents a minute.”

These uses of Internet telephony result in better service and better communication with customers, but the savings comes with economies of scale, Routhier said

“Sooner or later, the savings on long-distance calls will pay off the equipment,” he said. “Over the short haul, it’s more expensive, but over the long haul, it will save money and provide ease of use and better service.”

Hanson doesn’t believe that traditional long-distance telephone service will ever be eliminated. However, most businesses are heading more toward Internet telephony so that business phones as they exist now may be obsolete in another 15 years.

“Phones and the Web will start converging,” he said, adding that many companies are already using Internet telephony to communicate with branch offices.

“It’s very effective, and the technology will get better and better,” he said. “The quality on the Internet can be perfectly clear. It just depends on how much you want to spend.”

Will Porter, president of the telephone-installation company Teleco of the Rockies in Fort Collins, agreed that telephone systems are headed toward the Internet.

“It’s the wave of the future,” he said.

In a couple more years, phone-installation companies such as Teleco won’t even sell traditional telephones any more, he said.

Even now, he’s seeing some businesses starting to use voice-over IP. As he describes it, although users can use the computer screen to view the same data while they talk, what generally appears on the screen is a pop-up box with the name and phone number of the caller 9 much like the text on a caller ID box, he said.

Some systems allow the user to put the call on “hold” status while he’s talking to someone else, Porter said. In that case, a note would appear to that effect on the screen.

Porter said that the technology is still new, and he estimates that Northern Colorado is about one and a half to two years behind Denver in adopting Internet telephony.

Even though more companies are moving toward this type of communication system, Porter, like Hanson, doesn’t believe that traditional long-distance phone service will ever be eliminated.

Many businesses will retain their phone systems over the next 10 to 15 years until they grow out of them, he said. “Long-distance carriers will never go away.”

Internet telephony may be the communications system of choice in the future, but one telephone installer pointed out that the technology still has a ways to go in terms of quality. Ralph Gray, owner of Phones West Communications in Fort Collins, likened it to two-way radios.

Even though customers are bypassing long-distance charges by using the Internet, the voice quality is so poor that it’s not worth using, he said.

“In business, they don’t want to misunderstand each other,” Gray said. “The quality is not very good right now, but it will get better.”

But by the time the transmission quality improves, Gray expects Internet carriers to start charging for long-distance calls.

“They’ll come up with a way to block it and make it billable,” he said. “I see some new technology that will make long-distance calling over the Internet quicker and better.”

Currently, Gray is seeing an increased demand for special circuits for digital T-1 lines. Traditionally, phone lines have consisted of a pair of two copper wires from U.S. West. Each pair can accommodate one phone line.

But the digital T-1, which is available through several phone carriers, comes in on four wires, allowing up to 24 telephone lines. To get the same number of lines on regular copper wires, the customer would need 24 separate lines, Gray said.

“[Digital circuits] are faster than analog for access to the Internet, so that’s one problem eliminated,” he said.

Each of the 24 channels on a T-1 can be designated for voice, data, special access to the Internet or other tasks. Also, the T-1 can tie in two phone systems for a company. For example, a business with offices in Fort Collins could link its phone system to a branch office in Cheyenne.

“T-1s are not cheap by any means,” Gray noted. The break-even point generally comes when a company has about 18 copper incoming lines. Businesses with 19 or more copper lines probably could benefit by installing T-1 digital service.”

Local telephone installers say more businesses will start using Internet telephony in coming years, but traditional long-distance telephone service will never be eliminated.

Eric Hanson, president of Vend-Tel-Co Ltd. in Loveland, described Internet telephony as a technology still in its infancy. Voice-over Internet Protocol has been around a while, he said, but the technology has been a viable option for customers for only two years or so.

“We’re not seeing much activity in this market,” Hanson said. “But outside this area, some of our business customers are putting in whole call centers on the Web.”

For example, companies that provide technical support to…

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