RealTime IT News

VoIP Providers Assemble e911 Pieces

The Federal Communications Commission's order requiring broadband phone companies to provide enhanced emergency 911 (e911) calling services will shape the future of the nascent industry.

Public safety officials say it's a reasonable and responsible response to an expectation that IP telephony services enable customers to call 911 in an emergency or life-threatening situation.

As internetnews.com has reported, because of the nomadic nature of VoIP, Internet telephone services frequently route 911 calls to public safety administrative offices instead of directly sending the calls to Public Service Answering Points. Other VoIP providers offer no 911 services at all.

But some VoIP advocates worry the order could slow adoption, limit choices and stifle innovation.

It's too soon to say what the outcome will be, but with the clock about to start (the deadline is 120 days from the order's printing in the Federal Register), companies are working to comply and reconcile the extra costs with their business plans.

For the handful of well-heeled VoIP companies, the choice is simple, if unpleasant: pay the Baby Bells for access to routers and databases in order to deliver e911 abilities.

Vonage, which recently added $200 million to its mountain of venture capital, has already signed a deal with Verizon , but it wasn't cheap.

The largest U.S. VoIP provider will pay millions of dollars for infrastructure upgrades and Verizon tie-ins. It made similar arrangements with SBC and BellSouth and is hopeful it can do the same with Qwest . Other large providers, including cable or telecom giants, can afford to make their own e911 upgrades.

"The start-up costs are the killer here, so many smaller companies will not be able to afford the basic infrastructure capital expenditure or they'll have to rework their service," Brooke Schulz, a Vonage spokeswoman, said.

VoIP providers with fewer resources are going another route. 8X8, Net2Phone, New Global Telecom and Speakeasy all use e911 from network services wholesaler Level 3 , which recently expanded its e911 reach.

SunRocket uses a similar service from Global Crossing. It also stopped selling out-of-region phone numbers. Once touted as a way to give a customer the appearance of having presence in another city, the numbers can confuse e911 systems.

Brian Lustig, a SunRocket spokesman, said the move affected only a small number of customers and the obligation to offer reliable e911 took precedence. SunRocket expects to be fully e911 compliant within 10 days, well ahead of the deadline.

Despite the options employed by these providers, some industry-watchers worry that VoIP startups will be priced out.

"We're noticing a lot more panic in the lower end," said Joshua Stephens, CEO of Switchvox, a maker of VoIP-compatible phone systems for small businesses. "Unless someone comes out with a really clever way to solve this for the little guy, those guys will evaporate."

Stephens said he could envision small VoIP providers banding together in a consortium to negotiate better rates from e911 wholesalers. There could also be some consolidation among small regional players.

Others are expect a chilling effect on up-and-comers. "You'll see fewer new entrants," AT&T spokesman Gary Morgenstern said.

Vonage's Schulz agrees, saying the order "essentially means no new smaller players or independents can enter the market. E911 is a very high barrier to entry for any company to meet -- big or small."