The Quick Start Guide to VOIP for the Home, Home Office, and Small Business

VoIP Termination is an Issue Waiting to be Resolved

The number of people using conventional phones is many more than those using VoIP-phones and broadband phone service.

This forces the VoIP phone companies to route the voice data from the IP network to the conventional phone lines being used by a telecom carrier. The telecom carrier then forwards the call on a PSTN line to the called party. Every day billions of VoIP calls are being terminated on PSTN lines. However, the VoIP termination is an issue that is yet to be addressed fully in the US.

It was hoped that the petition filed by Level 3 Communications with the FCC would resolve the issue. However, Level 3 chose to withdraw its petition in March 2005 leaving the question of termination fees wide open. This is an issue that cannot be brushed under the carpet forever.

The VoIP market is booming and the number of players is going up. The chain that starts from a VoIP subscriber extends to VoIP phone company, wholesale VoIP provider, private IP networks and commercial or conventional telecom majors who provide termination facilities on their networks.

Today, the VoIP provider is only requesting for call termination on conventional telecom networks and not paying any fees for it. If, however, the telecom majors insist on termination fees then the VoIP companies will have to increase their tariffs. This will make their services less attractive to the end customer, and even slow down the growth of VoIP phone call market.

One solution is that VoIP providers set up their own IP-based networks to terminate calls. However, this will only be practical if all providers join hands to set up a parallel network that touches all cities and towns of America.

Till this happens the wholesale VoIP termination services will continue to struggle. The VoIP phone service providers too will be on tenderhooks because they know that payment of inter-state or intra-state access charges for calls terminating on PSTN (Public Switched Telephone Network) will throw their business plans for a toss.

VoIP termination is a big challenge. One player that stands to gain most from this is the wholesale service provider. But this can only happen if the wholesale VoIP provider is able to offer reliable and flexible VoIP termination services to retail providers based on an open and distributed architecture.

The wholesalers also need to improve the economics of VoIP termination by implementing more flexible routing schemes to reduce operating costs. At the same time they should continue to provide reliable termination services to retail service providers by deploying carrier-class voice gateways that offer increased network intelligence.

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