Michael Gallagher is the Assistant Secretary, US Dept of Commerce. Apparently, his title does not do him justice : He actually advises the President on ICT development in US.

Anyway, he sound like campaigning for the President ;-) but it has been very informative filled with data, President’s policies and how it is affecting the industry.

Then something hit me: The man advising the President on ICT is here actually at the VON event, talking and engaging the industry…This is how important VoIP is…

Walked a little bit around VON Exhibition in the late afternoon but only managed to half of it before they closed. Anyway, lots of gadgets on displays but a lot of it are just “me too”. But here are also some pretty cool toys.

1) Motorola

They are finally here – GSM + WiFi phone! Not exactly the first in the market (XDA II) but at least MPx is not vapourware. Apparently they are going to be on sale in Asia (including SG) in a few weeks time.

The form factor, while a bit big, are much smaller then XDA II. And it actually looks like a phone rather then a PDA. The most cool part is that it is able to open in two ways, like a clamshell phone or on the side like a Zaurus!
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One of the things that striked me at the evening panel (as titled above) was that several panelists mentioned that 10 years ago, numerous (AT&T lab) engineers told them VoIP was not possible at all. Reasons cited inclued needing a lot of CPU power, lack of bandwidth, poor sound quality etc etc. But wala, here we are today at VON where VoIP is changing the industry.

Hence, “all engineers are blind”. Blind not because we dont know anything but because we know too much. We know too much to focus only on why the “crazy” idea won’t work because (1), .. (2), .. but failed to see when those doesn’t matter. Does quality of the voice matters? Yes but only up to a point. But no, engineers wants nothing but perfection so nay, VoIP can never make it.

Another thing that striked me is Robert comment that a survey shows people used less then 24mins of their landline per day whereas they spend more then 4hrs on tv or internet. And so we have this wonderful 99.999% uptime phone which we build and maintained for so many years and continue to pay for it till now and we not using it for more then 23hrs per day? Perhaps with VoIP, we can stop the concept of hanging up the phone – I mean, I dont hanging up my skype session anymore.

Many stood up and welcome Michael Powell, Chairman of FCC, as he entered the room. He gave an excellent stateman-like speech, a farewell nevertheless. I feel quite sad¹ that he is leaving office in the time when the VoIP industry needs a pro-active FCC chairman in these times.

His final remark is that of the 8 years he served in FCC, he is most proud of VoIP. He mentioned about a recent trip to an electronic store and found a new shelf with voip offerings. It is actually pretty profound – you no longer get your voice service from your nearest telecom retail but from an electronic store package in a single box!

This reminded me, here is the new shelf I found in Frys on Sunday which I don’t see a year ago.

This is why I worked so hard for : Someday, I hope to see shops in Sim Lim selling voice service packed in a box too!

¹ Why do I care what is happening in FCC? Well, beside being the regulator for the largest economy in the world, they still has a lot of (soft) influence among the regulators in the rest of the world. Many still look towards FCC as a guide.

Jon Miller, Chairman and CEO of AOL, just revealed AOL Phone Service (to be launch next month) at this morning session.

This is my first townhall session at VON. Basically an open mike no-barrier Q&A session with FCC folks (Jeffrey Carlisle, Chief, Wireline Competition Bureau and Robertt Pepper, Chief of Policy Development). What is amazing is how open they are in answering the questions, about FCC views, position or thoughts on a whole slew of issues.

The transparcy is refreshing. It helps industry to understand FCC workings, what they think and hence, give them better guidance how they should structure their business or investments.

I hope IDA could do such thing some day.

There are a lot of discussion about termination charges at VON. Particularly, the recent Madison River blocking Vonage incident bring out more horror stories about Rural LECs (e.g. high termination charges).

Well, what do you expect? RLEC used to be a mini-monoploy and the gateway to their communtiy. In the past, there are no way you can get to them without going through them but now all that is changing due to VoIP.

If RLECs are bad, wait till you deal with developing country incumbents who used to get a lot of termination revenue. In fact, AT&T is a largest contributor to their GDP at one stage. Some already starting to voicing that VoIP is hurting their revenue stream at ITU and WSIS.

All these are are signs of a painful transition of a US$1T industry to, say US$100b one. For every dollar they used to made on voice, they going to get only 10cent in future – this means for every 10 jobs we have today, 9 has to go.

Now, this does not mean VoIP is destroying value. Instead, think of it as freeing up value. Now, I am paying 100-200$ on phone bills per month compared to 500-800$ few years ago. But this also means I have 300-500$ spare cash which I now pays for other new services – bigger broadband, dedicated server (for this blog :-) etc.

It is important to free up such value for consumer because then consumer have more free cash to buy new services. This will encourage companies to start offering new services, new jobs will be created to replace those lost and all of us will have better quality of life.

I spent my morning at Wifi VoIP Summit as I was given a slot to give a presentation about the APEET Trial.

When I told the audience that QoS is the last thing in our mind in our trial, one of the audience jumped and said something to the effect that 802.11b can only support 12 concurrent calls. Ha!¹

Look, if I have already provisioned the wireless infrastructure to support 1000 clients doing web, email, streaming, file sharing etc, do you think handling 12 or more concurrent rtp is going to be a problem? Dewayne was around, told me not to worry about it – they just don’t get it.

After lunch, I went back to the Telecom Policy Summit which turns out to be incredibly useful.

There was a panel on alternative last mile technology and the consensus seem to point to nothing viable in the short term beyond DSL and Cable so it looks like we will still see duopoly in US for a while. There was also a little discussion on “naked DSL”².

On social issues, it seems that everyone hated CALEC. No one question why it is needed but hated how it is been implemented. Law enforcement agency wanted information (e.g. timestamp 200ms) which is not possible with the existing deployment without huge investments and neither could they explain why they need such information.

Oh, another interesting point : Looks like people have stopped asking for deregulation and reversed to ask for some regulation particularly on interconnection (and termination charges and ensuring no LECs is blocking VoIP (Looks like I am on track :-)

¹ Base station design, VLAN and handsets makes a huge difference.

² DSL not tied to having phone service. I called it service unbundling.

Just finish packing my stuff and going to the airport now. I am going to VON Spring in San Jose. VON folks are kind enough to squeeze me a few minutes last minute at the Wifi VoIP Summit to give an update of the APEET Trial. I will also be on the VoIP blogger panel with Andy Abramson, Dan Brekke, Jeff Pulver, Om Malik, Aswath Rao and Tom Keating. (Hey, I am the only one from Asia :-)

Come to think about it..this is my first VON! And I am pretty excited about it! See you in San Jose!

Yohoo! In the case of Vonage vs unnamed LEC (Madison River), Common Sense : 1, Stupidity : 0. Even though the decision is pretty much expected, I am surprised how fast this gets resolved. Thank you, FCC and Mr. Powell!

Fresh on MSN and InternetWeek:

In a first-of-its-kind penalty, a telephone company will pay $15,000 to settle allegations that it blocked phone lines that customers used to make calls over the Internet, federal regulators said Thursday.

Madison River Communications, LLC, also must not block Internet calls in the future, according to the Mebane, N.C.-based company’s settlement with the Federal Communications Commission. The company did not admit to violating any rules.

$15k is a small slap on the waist but is a big warning sign for all others :-)