Why phone calls will be sent over the Internet like e-mail

June 25, 2001

SAN JOSE, Calif. - For a century, a labyrinthine network of switches and wires has connected voices around the world. Access is as easy as picking up a telephone and pressing a few buttons.

More recently, separate networks have sprouted, not to carry conversations, but the electronic chatter of machines. These data networks now interconnect and span the globe.

Though both networks can handle both voice and data, their complete convergence has long seemed a pipe dream. Phones are simple but limited in function and bandwidth. Data networks are flexible but complicated.

Now, high-speed data networks have become so pervasive as to transform telephony. The global phone system is on the verge of its biggest technology shift since Alexander Graham Bell's invention eclipsed the telegraph.

Using data networks, telephone calls will no longer be made by completing circuits, a connection made by automated switches today and human operators long ago. Instead, voices will be broken down into packets of data and transmitted over the Internet just like e-mail, instant messages and other data.

The technology not only makes phone calls cheaper, it also enables new services.

"It's not just about carrying voice," said Rick Weston, senior vice president of Qwest Internet Solutions. "It's about the features that we're going to build on top of these networks."

Voice mail and e-mail, for instance, could be checked from a single program, either on a phone or a computer. New lines could be added without running extra copper wire.

Employees' telephones, assigned unique addresses, could be moved to another office or home with a few clicks of a mouse. Dial tone could be replaced with useful information, such as news or scheduled appointments.

These technologies are happening now, and dozens of companies are scrambling to profit from the convergence of data and voice networks.

Large corporations are already saving money by routing calls to satellite offices through their computer networks, bypassing the taxes and tolls of the traditional phone system and negating the need for a separate voice network.

Companies report costs savings of up to 30 percent with such systems, according to the consulting firm InfoTech.

Equipment makers such as Cisco Systems Inc. and 3Com Corp. sell specialized equipment that efficiently routes voice data over businesses' local networks and connects it to the existing telephone system. The market is expected to grow to more than $3.3 billion in 2001 and $11.6 billion in 2004, the Telecommunications Industry Association says.

Providers of high-speed Internet access are now testing the technology, hoping to cash in.

Even established phone companies such as Qwest and SBC Communications see it as a way to add services without having to lay new cable.

Yet none of the services have much value if the person on the other line can't be heard. That, so far, has been the big challenge.

Early Internet telephony, generally used to bypass long-distance and international charges, was awkward. A caller used a microphone and speakers attached to a computer.

Now, actual phones are available, and they connect to data lines instead of phone wires.

But the hardest part has been hearing the other person. Voice packets can get delayed or lost as they transit data networks.

Unlike the phone system, which creates dedicated circuits for each call, data packets from an Internet call can take varied routes. Even with a fast connection, a conversation with a next-door neighbor can sound like a call from Chechnya.

"You may get a perfectly good call if things are working fine," said Alec Henderson of Cisco Systems Inc.'s voice technology center. "But if everyone is trying to download the Victoria's Secret show, your call may not go through at all."

The key is giving voice packets priority over those containing e-mail and Web data. Companies can do this now only with close monitoring or avoiding altogether the public Internet.

Despite these hurdles, the home market is growing as high-speed Internet access reach more residences.

Companies that once offered choppy PC-to-PC service are introducing devices that link regular telephones to cable or digital modems.

Net2Phone Inc. and Dialpad Communications Inc. run traffic over voice-optimized data networks that connect to the old phone system, allowing calls to be made to regular phone numbers, not just other PCs, for just a few cents a minute.