[asterisk-users] What are the various models of DID providers

[Alex Balashov]

randulo wrote:

> When you think about the learning curve of the average asterisk
> beginner, the picture painted for them is "Become your own telco!" and
> we all know that's not exactly accurate. For the small asterisk
> install it's much more accurate to say "Get an enterprise-class pbx
> free (if you don't mind months of studying)."

I can definitely concur with that.  But misappropriation of Asterisk and 
naive business models arising from it is a whole different topic.  :-)

> The biggest challenge for anyone who will NOT be dealing with the
> carriers or large wholesalers is the inherent instability of the
> market for affordable ITSP. Over the past few years, many of these
> have fallen by the wayside or gotten so bad users began to jump ship
> on their own. Expect one or more announcements VERY SOON from names
> you've heard about.

It's a hard business to be in.  The margins are thin, and carriers will 
go after your biggest and most profitable customers -- assuming those 
customers aren't ingenious enough to try to cut you out on their own.

This type of resale is commonly spoken to by the somewhat pejorative 
term "arbitrage play."  It implies resale without adding a lot (if any) 
real value by people who don't understand PSTN economics or good 
engineering.  Arbitrage-based business models are also characterised 
generally by volatility and unsustainability;  in the long run, the 
market rationalises them away as the offering achieves higher 
penetration and becomes more commoditised.  People start wanting to go 
straight to the farmer to get their wheat.

However, as I said in the previous post, there are legitimate 
opportunities for ITSPs to add lasting long-term value.  To make it 
happen, though, there's got to be more than resale of minutes going on. 
   Innovation of business process and streamlining of cost will prove 
much more important in the long run as a value proposition.  Competing 
on price is just a race to the bottom.  This is especially true given 
the source of a lot of the cost basis in current regulatory conditions, 
which are, to put it mildly, rather CLEC-unfriendly.  The Bush FCC did a 
lot to roll back the pro-small busines gains of TA96--or so goes one 
point of view, anyway.

The other thing to observe is that right now, the voice traffic is still 
fundamentally exchanged through the PSTN -- even among calls between 
VoIP providers.  If I'm on a local ITSP and you call me from Vonage, the 
call is still traversing various IXCs and Bell tandems.  While nobody 
seriously expects the PSTN to go away substantively any time soon, there 
is considerable work being done by the market to find a viable private 
VoIP peering model so that providers can send each other traffic without 
paying the Bells for it at all.  This would represent a rather radical - 
if subtle - departure from the telco business model (monetisation of 
"minutes," calls as sequences of billable events and resource 
acquisition on fixed-bandwidth channel reservations on synchronous 
multiplexed signals) to the Internet business model (flat-rate or 
settlement-free peering and exchange of packets).

Many people thought universal public ENUM would be the ticket, but for 
some reason that hasn't really taken off.  But eventually, ITSPs will 
get smarter and start passing traffic between themselves over pure IP a 
lot more, creating a more serious alternative network overlay and 
delivery model.  As that happens, I think ITSPs will have a much more 
important role to play because they will slowly become the "new" telcos, 
as opposed to just playing resale games.

> My best experience is from our DSL and ITSP. I can be talking to a
> human being immediately and a service tech who knows what VoIP is
> within a minute. They're fantastic, but I see they are about to go
> public and be on the NASDAQ. I hope that doesn't compromise their
> great service.

I know what you mean;  my background is in independent ISP land, back 
when that business model still existed[1].  Independent ISPs generally 
tried to differentiate themselves in marketing with a higher level of 
no-nonsense customer service.

It's tough not to compromise that kind of service;  it's expensive to 
offer and very costly to scale.  Competition in business drives things 
down to a more Pareto-optimal[2] common denominator, wherein to maintain 
your competitive position you get dragged into doing things that are 80% 
good for 80% of customers 80% of the time just like your competitors.

> You think someday AT&T will have a web site where you can sign up for
> termination/origination? I guess the airlines are able to sell flights
> that way. Customer service would be a nightmare though. Welcome to
> "Your call is important to us" land.

I doubt AT&T will, seeing as accelerating or enabling VoIP is not really 
in the incumbents' interest.  But I think the big competitive carriers 
will certainly evolve in that direction.

-- Alex

[1]  I posted some ramblings to asterisk-biz on why that business model
      does not any longer exist, for the most part:

http://lists.digium.com/pipermail/asterisk-biz/2009-January/028951.html

[2]  http://en.wikipedia.org/wiki/Pareto_principle

-- 
Alex Balashov
Evariste Systems
Web    : http://www.evaristesys.com/
Tel    : (+1) (678) 954-0670
Direct : (+1) (678) 954-0671
Mobile : (+1) (678) 237-1775