"The bottom line is that if you want to serve the business segment, you have to pay a lot of attention to quality--in latency, packet loss and speech degradation," says Ike Elliott, senior director of voice access and engineering for Level 3 Communications in Omaha, Neb. Level 3 has built an IP-ATM backbone for what it considers the emerging multimedia IP services space.

And latency is a sore spot for VoIP, which expends an average of 40 to 60 milliseconds of delay per gateway. That kind of overhead gets noticed fast, especially when you're traversing multiple gateways. Most service providers get around the latency problem today by overprovisioning their bandwidth.

Interoperability is another big issue. The best hope so far for ensuring that VoIP traffic can travel between IP networks and traditional circuit-switched nets is the IETF's Media Gateway Control (Megaco) protocol, which will be based in part on Bellcore and Level 3's Media Gateway Control Protocol (MGCP). This type of protocol lets a service provider's switch server or other controller device manage and control SS7 (Signalling System 7) switches on a PSTN, and VoIP gateways on an IP network. Equipment running this protocol is interchangeable in a service provider's own network. "If you have a service that uses a [VoIP] media gateway in a certain way, you ought to be able to replace it with another one and it will still work," says Level 3's Elliott.

Meanwhile, the Packet Multimedia Carrier Coalition, a group of service providers including GTE, ICG Netcom, Level 3 and Sprint, is defining just how it will implement Megaco and another IETF protocol, SIP (Session Initiation Protocol), for exchanging traffic between the PSTN and IP networks. And AT&T is running an IP telephony interoperability lab of its own, where service providers can test among one another the interoperability of their VoIP hardware and services such as billing and network management.

Le Menu
Providers rolling out VoIP services for the enterprise fall into four main groups: traditional carriers (namely, AT&T, MCI WorldCom and Sprint); ISPs (such as PSINet); IP telephony providers (IDT); and IP-based service providers (Level 3 Communications and Qwest Communications International), which have built massive IP infrastructures from the ground up.

Most of the early VoIP services from these providers target consumers, though many plan to offer some type of business service. "Prepaid calling cards are an easier way to get into the market--it's more economical with a non-subscriber approach," says Kathy Back, director of IP telephony for Sprint, which last year tested a consumer VoIP calling-card service.

Sprint, which has been tight-lipped about its business VoIP plans, will run its future consumer and business VoIP services atop its Integrated OnDemand Network (ION), the multimedia IP and ATM-based backbone it is building. Officials at Sprint wouldn't discuss details about the timing or types of VoIP business services the company will offer.

MCI WorldCom also is keeping its VoIP plans close to the vest, save for its existing Click and Connect service for Web sites. Click and Connect is a way for businesses to offer voice on their Web sites, over their customers' IP connections to the site. The voice call, which is at no charge to the user, originates on the Web connection and is then split off to MCI WorldCom's PSTN voice network using VoIP gateways. So the voice connection from the Web user actually terminates on the PSTN, at the call-center site.

AT&T has been more eager to talk about VoIP. The carrier is running a trial VoIP VPN service at a large financial services company, which it won't disclose. But the trial reflects AT&T's strategy for VoIP--to use IP's ability to blend voice and data over one pipe to supplement its bread-and-butter PSTN services. Off-network calls still will go over the PSTN for the foreseeable future, according to AT&T officials.