VoIP

No Old Iron

Take a look at what you get when you build a VoIP service with the new technology of softswitches and SIP, incorporating the lessons of the CLEC buildout.

by Alex Goldman ISP-Planet Managing Editor [November 4, 2004]

Imagine a brand new company whose motto is "No Old Iron." To a CLEC, that motto would mean softswitches instead of expensive class 5 switches. To David Clark, President and co-founder of Las Vegas, Nev.-based CommPartners, it would mean a lean operation that can cover the nation with VoIP service for a fraction of the cost of building a nationwide CLEC.

Clark was senior vice president of investor relations at MCG, which became MPower, and brings with him the lessons learned in the CLEC buildout and meltdown. He's especially excited about the efficiency of the company's network.

The nationwide network diagram is breathtakingly simple. With just four SuperPOPs in the continental U.S., plus one each in Alaska and Hawaii, the company will cover all fifty states (it's filed applications for CLEC status in all fifty and is currently certified in 25 states, with four more expected by the end of the year).

Clark explains that the SuperPOPs require relatively little data center space, about 200 square feet each. The key to connecting small businesses to the SuperPOPs is through leased T-1s which, he says, are not likely to get more expensive in the near future, especially as his company is not using RBOCs for the T-1 lines. Most of the T-1s will be supplied by Internap.

Maurice Gallagher, of Gallagher Equity Management, says that as an investor in MPower, he feels he's "doubling down" by investing in CommPartners.

The technology is not proprietary and the business plan could, presumably, be copied. The company is using Telica and Broadsoft to provide switching and PBX functions. The core is a Syndeo Syion softswitch that is up to spec for the cable broadband market. Acme Packet provides session border control functionality.

On the client side, the key product is the familiar ATA, this one a Sipura SPA-2000. Mark Peterson, vice president of sales and marketing, points out that it's very very small, 4 1/3" x 3 2/3" x 1 1/3" and it doesn't weigh much either: the whole package, including cable and adapter, weighs barely more than one pound.

Clark says that some people can build the network, and others may be able to build the applications, but very few will be able to build both. He claims Level 3 as a major competitor (but we suspect several other startups are aiming for the CommPartners niche).

Clark says his company's commitment to open standards such as SIP is proven in the company's sponsorship of voip-info.org. The company spends very little on R&D, but is a real supporter of open source software and standards. "We expect cool applications to appear, but we're not in the business of anticipating what those applications might be," he says.

Furthermore, he claims, his company is very well funded.

A final advantage is back office functionality. He says that some ISP customers are handing him the customer information and asking CommPartners to integrate the bill and send it to end users.

It's no secret that a surprising number of ISPs use nothing more sophisticated than Quicken for their back office (see, for example, the 7th Biannual ISPCON ISP-CEO Roundtable). Quicken's fine if all bills are a flat monthly fee, but when you add in phone calls, including the variable charges of international calling, then you need a more sophisticated billing system, and CommPartners is prepared to provide it, if asked.

The people at CommPartners feel that they have a total package, from front end to back end, guaranteeing a higher quality of VoIP phone call than the competition. The company is reaching out to ISPs and VARs as channel partners. It currently has no direct sales force, relying instead on companies that already have their own small business customers. Asked if ISPs should also be cultivating VARs and consultants and integrators, Clark's reaction is, "of course!"

He points out that many businesses have traditionally had separate voice and data staff, and, by now, it's clear that "data has won." It's a natural extension of the primacy of data to enable the data staff to handle voice with the efficiencies that VoIP generates naturally. It can be as simple as being able to add a new phone number from a console instead of calling in a consultant simply to add, move, or remove a phone number. But efficiencies go far beyond that with special calling features and all the other bells and whistles that SIP makes possible.

Clark and Gallagher agree that VoIP providers can avoid the problems that really harmed the CLECs, problems they euphemistically call "lack of control over Selling, General, and Administrative (SG&A) expenses." Small customers are already provisioned. Larger customers simply need a T-1 line, which is not subject to the RBOC delays that plagued CLECs.

Gallagher adds, "you need to not be dependent on others for provisioning customers, you need to be at the front end of the technology curve, and you need to have automation, which is key." CommPartners has all of that.

For the future, the company hopes either that SIP will become a world standard or that other standards will be mapped to function with SIP servers, enabling it to expand its footprint outside the U.S.

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