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The E-911 Opportunity
Reprinted from the January 2006 issue of Internet Telephony Magazine.
In our company’s insider parlance, an opportunity is often a euphemism for a “problem.” This makes for some interesting turns of phrase when things go wrong and my colleagues approach me with, for example, a three-alarm opportunity. And yet sometimes an opportunity is just that: a chance to do some good, and maybe make some money while you’re at it. I recently spent some time with companies in
Intrado is one of the leaders in this space and their business is booming. On their map for the future is providing next-generation 911 services to PSAP and helping enterprise customers route 911 calls. One of the challenges with business VoIP is that an employee using a VoIP phone on a VPN could be identified as calling from where the corporation has its IP PBX and not the address where the employee actually is located.
Level 3 is a carrier’s carrier. This provider not only helps other service providers by providing an underlying network, they also provide bulletproof 911 service so long as the number is one that Level 3 provides.
For those service providers concerned about the expense of the above two solutions or want 9-1-1 coverage for any number from any provider, there are yet other solutions worth exploring. For example a company called Telefinity Dash911 is bringing 9-1-1 service to the realm of the smallest VoIP providers as inexpensively as possible. Gregory Giagnocavo is the company's founder and he has a number of successful startups under his belt.
Greg saw an opportunity when he realized VoIP service providers (VSP) who wish to connect to a Tier 1 E911 provider such as Level 3, TCS, or Intrado would have lots of hard work and a great deal of expense - both upfront and ongoing - to deal with in order to get implemented. They need engineers and telecom experts to interconnect properly. In addition they will have to pay up to $9,000 per month or more in monthly recurring expenses.
Dash911 allows interconnectivity to the Intrado network at a fraction of the cost. Starting at $395/month you pay according to your needs at $1.45 per telephone number per month. This includes 24x7 access to Dash911’s information and update call center and a fair measure of handholding for starters. This call center accepts change of address phone calls for a VSP’s subscribers, which meets the FCC mandates requiring a VSP to provide a way for a subscriber to update his address by telephone, over the Web. Gregory says Dash911 decided to go with Intrado as a 9-1-1 calling services provider because he believes they are marketplace leaders and provide the maximum flexibility in services and coverage.
Talking to Gregory reminds me of what I love about this business. I get to see entrepreneurs come up with novel ideas that just make so much sense you just know they are onto something. Whether Dash911 will become the next Wall Streetdarling is unclear at the moment but certainly the ideas and services the company is rolling out seem to be perfect for the time being.
Getting back to how the system works. Dash911 can set up a Web page for you with your logo, corporate colors and URL to allow your customers to register and/or change their address, also referred to as Registered Location for 9-1-1 service. The branded Web page can be set up within a few days, requiring very little effort on your part. If you prefer, the company also provides a SOAP API so you can seamlessly integrate their system with your own website and applications.
Dash911 will soon be offering directory assistance, a tried and true, albeit boring service that many customers want and will pay for. And Q2 will see the implementation of v911 TTY/TDD service for the hearing impaired - an often over-looked but absolutely critical segment of the market.
Another unique application is the new opt-in SmartLink911 service that is coming soon. Using this solution, whenever one of your customers dials 911 the call is actually recorded by Dash911. As part of this service your customer can program up to five emergency contacts in advance so that when 9-1-1 is dialed, these five contacts are immediately notified via e-mail, SMS or phone.
The people that are notified have the option of listening to the 911 call. Imagine how crucial such a service can be to someone with elderly parents. If your parent calls 911 and goes to the hospital today you may not find out for 24 hours or more that this call took place. If a parent is out, they might want to know why the babysitter called 9-1-1 and what was said. There are many scenarios in which this service can be useful.
Another useful feature is the “saved address” database. The Dash911 service allows your subscribers to save up to seven pre-validated addresses for 911 service. Why would you want to do this? If you travel frequently, your ‘frequently used addresses’ can be pre-saved as pre-verified addresses, allowing you to quickly and easily update your address to your new location.
Why does it take so long to update an address into the national 9-1-1 database? Credit the 911 databases that are finicky and tough to deal with, and PSAPs with their own rules and standards. When entered the way you understand and normally refer to it, your address, called the civic or postal address, may not be exactly in the format required by the PSAP’s Master Street Address Guide, or MSAG, database. This guide contains street name, direction information such as north or south and suffix details such as avenue or road (there are 32 different suffixes!)
Another service Dash911 provides is checking addresses as they are entered. If there isn't an exact match the system suggests a few options and the user decides which address is correct. Addresses entered that pass this system are expected to reduce error rates that VSPs must correct to less than five percent using this service, according to the company.
Now it probably makes sense to keep seven addresses that are “MSAG approved” on file. As you can imagine the company also keeps a record of voice and Web activity of all changes in case they are needed.
Our conversation then went into how the 9-1-1 system in our country needs a drastic overhaul operationally and regulatory. One obvious area needing improvement is that operators at some public safety answering points, otherwise known as PSAPs or 9-1-1 call centers, can receive extra pertinent information via a 80-character field while other PSAPs can only receive a 30-character field. However, due to variations in what PSAPs can receive and use, this field is rarely populated with extra and critical life-saving information.
The extra information that could be made available along with an emergency call could reduce confusion in an emergency, decrease response times and easily save lives. For example what if someone who is mute calls 911, how do they respond to requests from emergency workers if a door is locked? What if a wheelchair-bound person is upstairs when a fire breaks out - how would anyone know? What about a guard dog? Will it attack? Do emergency workers shoot the dog? Or, is it a harmless canine whose bark is louder than its bite? For these and many more situations, it would be much more helpful and possibly critically important to emergency responders if they had this information when the 9-1-1 call comes in. Our national 9-1-1 system needs major enhancements and uniformity; there are too many disparate systems being used across the
Other concepts and ideas we discussed were how there doesn’t seem to be a single way to immediately communicate with all the more than 7,000 PSAPs in the country. As previously mentioned the 9-1-1 and PSAP system is highly fragmented and standards, equipment, procedures, policies and methodologies vary widely. For something so critically important, surely we as a nation can come up with a better and more efficient system.
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VoIP Predictions 2006
Reprinted from the January 2006 issue of Internet Telephony Magazine. Here are some predictions for the future of VoIP:
TV Wars
Cable companies and LECs will have brutal wars with one another about what rules the ILECs must follow to provide TV in areas where cable companies are dominant. Bribes and government wooing will take place on both sides of this conflict and 90 percent of the effort will be on killing off each other and 10 percent will be on providing services consumers actually want.
In the meantime Yahoo!, Apple, and others will become TV stations providing broadband television to consumers at such a rapid clip that everyone will be forced to rethink their Internet TV strategy
Finally a VoIP Phone Our Kids WANT To Use
I have been asking the VoIP community to come up with the iPod of VoIP phones for some time now. No one has listened. I asked for SMS and other next-gen features to be built in. No one listened. Now Hasbro (yes the people that make the Nerf football) has a device that is part walkie-talkie and part IM device. The “toy” is aptly named ChatNow and is selling in record numbers. On eBay it is currently selling at more than twice the list price of $80. I now predict someone will listen and develop a VoIP phone with SMS/IM built-in. Hopefully it will look good too.
Designer Phones Will Take Over
In true all or nothing fashion we will not only get really cool wireless VoIP phones but we will see more designer phones from the likes of companies like Bang & Olufsen and others. The telephone will go the way of the iPod and have to look stylish to be considered by ever-snobbier (more demanding) consumers.
More FCC Mess
The FCC will force all phone providers to pay into the Universal Service Fund and as a result Skype, Google, and others will see a massive upswing in their subscriptions as people sprint as fast as possible away from telephone numbers.
FCC Enforcement
Starting in Q1 expect enforcement of 911 rules. The FCC will get very tough with service providers that aren’t providing adequate 911 service. For the record, I am 100 percent behind them on this.
Blackberry Loses Large Amounts Of Device Share
A slew of new devices from companies like Motorola will eat into Blackberry share of market and devastate the company. These devices will be VoIP and presence enabled, will allow seamless browsing, and look sleek and new-age.
More importantly, the mobile device market will really take off as processors get faster, wireless networks speed up and applications take advantage of small screen size. It will finally be almost redundant to have a laptop unless you need access to large graphics.
Web 2.0 and VoIP 2.0 Finally Merge
The opening up of the GoogleTalk API creates a slew of new products and services leveraging Google’s open API to allow developers to voice enable everything on the Internet. Every Web site now can easily take advantage of the amazing potential of adding voice.
Google Launches GoogleTalk “Out”
On the heels of the “GoogleTalk Out” announcement, eBay/Skype will sue Google to get them to change the name to something else. Google changes the name but gets so annoyed they vow internally to take eBay out. Google subsequently begins to integrate tighter with Amazon and eBay makes nice with Yahoo!
Regardless of what the name becomes, GoogleTalk Out allows any Web application to be connected with any and every phone. Overnight, new business models appear on specialized Web sites allowing these sites to send phone calls to retail establishments on a paid per call basis.
Google will get involved in this market allowing the pay per call ads to be placed on a variety of Web sites like Google ads are distributed today. Google will get a cut of every call as will the owner of all the specialty sites.
VoIP Continues Growth
VoIP, IMS, and SIP continue growing rapidly and blaze past many of the most optimistic market forecasts.
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Top VoIP Investments/Trends
Reprinted from the January 2006 issue of Internet Telephony Magazine.
Last year in response to many requests I started a Top 10 investments list in which I outlined some of the best investments for 2005. Here is an update on last year’s list as well as some new additions. As a bonus I have added some top trends.
Peer to Peer
I led with P2P last year and lo and behold, two out of the three companies mentioned, Nimcat Networks and Skype were purchased for $46 million and over $2 billion respectively. P2P is still a super-hot market. Expect much more activity in this segment in the next 12 months.
VoIP Peering
There are rumors that some of the interconnection facilities may be acquired soon. These are the buildings that actually allow the physical peering to take place. Telx is a leading voice peering facility. The Voice Peering Fabric (VPF) is a Layer 2 Ethernet exchange allowing VoIP peering to take place as well as the resale of ASP services. The VPF is owned and run by Stealth Communications. As VoIP peering is generally a small part of what Telx does, the more pure play companies in VoIP peering are session border control companies as well as those that do transcoding such as Ditech Communications whose stock has appreciated 50 percent in the last quarter.
Open Source Telephony
This continues to be a rapidly growing space but it is unclear where the investment opportunities are. Companies like Digium or Pingtel are obvious plays but Sangoma, a company making high-end open source compatible hardware, is less obvious. Still, all of these companies are private at the moment which presents a problem for the casual investor. Correction, Sangoma is indeed public.
Government Suppliers
This is still a hot area and the government will likely be one of the largest purchasers of VoIP equipment in the world. There are a few companies here worth watching such as NET.com and TeleCommunications Systems. The former used to also sell products to service providers but recently changed focus to selling enterprise VoIP solutions. In addition they have had a recent management overhaul. As a result the stock is battered and at a three-year low.
Triple-Play
This is still a very hot space and like last year it is the holy grail of service providers. Sales in this space are still brisk and will only get hotter. Cisco recently acquired set-top box maker Scientific Atlanta to further entrench themselves in video and paid just under $7 billion to do so. The IPTV market is also seeing massive growth. I don’t expect either of these spaces to slow for the foreseeable future.
Consumer Electronics
As VoIP gets more entrenched in our everyday lives the consumer electronics market will have more and more VoIP embedded in every day products. I am still waiting for the Apple VoIPod.
The companies that may benefit here are service providers such as Vonage or Skype that can get great licensing deals in place with these companies.
VoIP Chips and HMP
These technologies are actually at odds with one another but there are certain devices where HMP makes no sense and in these areas highly specialized VoIP processors are way to go and represent a great opportunity.
In larger VoIP systems, look to Intel and Aculab as some of the major players in the HMP market. No, unfortunately Aculab is not public.
SIP
SIP is hotter today than it was a year ago and TMC is launching SIP Magazine in print this month in order to help educate the market on the tremendous opportunities available in the space. Anything relating to SIP has legs at the moment and service providers and enterprise customers want more SIP products now.
As more SIP products are released, the desire for products and services based on this standard will only grow. Expect companies to make a nice living this year providing SIP trunks for IP PBXs.
That wraps it up for last year’s list. Here are some new thoughts:
VoIP Service Providers
In the past few weeks 8x8/Packet8 worked out a deal to provide VoIP service to BellSouth and their stock price doubled overnight. Then Vonage announced it received $250 million in convertible debt! Whether this makes Vonage a good investment or not is unclear but obviously there are many people who want to back this company at all costs.
I would have to say that the position that Packet8 is in is highly enviable as they are wholesaling their service quite effectively overseas and domestically. In the past six months they have turned me into a believer in their strategy. Prior to this point they were a niche player… Now they are in an amazing position. Yes Vonage is gaining tremendous mindshare and their brand is synonymous with VoIP. Packet8 on the other hand has a low-risk high-reward strategy of growing their wholesale business and reaping the future rewards of someone else’s marketing.
IMS
IMS is one of the most exciting technologies I have ever been involved with and it promises to help service providers roll out new services faster than ever before and furthermore allows these providers to make more money from the networks they own. Finally it allows wired and wireless networks to work seamlessly together. At the moment anything having to do with IMS is in high demand making this another investment opportunity for the foreseeable future. TMC will be launching IMS Magazine in print next month.
WiFi Telephony, Dual Mode
These markets will be huge. There is no doubt in my mind. Companies making money here will be those selling equipment as well as service. Even Skype will make a killing as they continue to license their protocol for WiFi telephony phones.
There is additional opportunity in connecting WiFi telephony devices to corporate PBXs. SpectraLink and Symbol Technologies are some of the players in this market.
Hosted VoIP
This market will grow more slowly than expected due to tremendous competition. Corporate
The overall picture for VoIP is very bright. There are few segments of the market that aren’t growing rapidly. If you are interested in hearing more about the financial angle regarding VoIP, don’t miss the opportunity to hear investment guru and CNBC anchor Ron Insana as he keynotes our upcoming Internet Telephony Conference & EXPO this January 24–27. We are truly honored to have Mr. Insana as part of the event and I for one am very much looking forward to his illuminating comments.
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Iwatsu at ITEXPO
Here is one that was just sent to me:
Iwatsu Voice Networks to Feature
IRVING, TX -- (MARKET WIRE) -- 12/20/2005 -- Iwatsu Voice Networks (IVN) today announced they will have the latest version of their Enterprise Communications Server and new Platinum Series terminals on display at the TMC™ INTERNET TELEPHONY® Conference & EXPO East 2006. The conference will be held January 24-27, at the
"Iwatsu's participation at the INTERNET TELEPHONY® Conference & EXPO is a primary reason why this show is widely recognized as the industry's #1 venue to test, compare, and learn about the benefits and cost-savings inherent in IP telephony products and services," said Rich Tehrani, TMC President and conference chairman. "The evolution in this industry has been monumental and it still continues to grow. We are proud to have Iwatsu Voice Networks and its
The Enterprise 2.0 Communications Server, powered by QuadFusion™ Technology, is the only telephony system that merges the four predominate communications protocols (VoIP, TDM, SIP and H.323) onto one platform without the need for external servers. The new Platinum Series station terminals incorporate the award winning ePod that provides a mouse-like interface for feature access.
"The release of
Amazingly the show is just 30 days or so away and I can’t wait to escape the cold and head down there.
Happy holidays to all my faithful readers. Have a safe, happy and healthy new year.
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Nacchio Investor Fraud
According to published reports, a federal grand jury in
At least six other former Qwest executives have been charged since the Justice Department began its probe of the company in 2002. Former Qwest Chief Financial Officer Robin Szeliga pleaded guilty in July to insider trading and has reportedly agreed to cooperate with investigators.
The indictment is the first charge against Nacchio in the government’s investigation into accounting practices at Qwest, the fourth largest telephone company in the
Nacchio, who maintains he is innocent, already faces civil charges filed by the Securities and Exchange Commission and shareholder lawsuits.
Following a lengthy investigation, the SEC sued Nacchio and eight other Qwest executives in March for committing massive financial disclosure fraud. According to the SEC, the Qwest defendants “engaged in a multi-faceted fraudulent scheme designed to mislead the investing public about the company’s revenue and growth.”
Regulators have said Nacchio sold Qwest shares for a profit of $176.5 million from 1999 to 2001.
According to the SEC, Nacchio and others “made numerous false and misleading statements about Qwest’s financial condition in annual, quarterly, and current reports, in registration statements that incorporated Qwest’s financial statements, and in other public statements, including earnings releases and investor calls.”
As a result of that scheme, Qwest fraudulently recognized over $3 billion of revenue and excluded $71.3 million in expenses. In October 2004, the SEC sued Qwest in a settled injunctive action in which the company agreed to pay $250 million for its misconduct.
Other Qwest officials named in the SEC complaint included Szeliga; former Chief Financial Officer Robert S. Woodruff; former Chief Operating Officer Afshin Mohebbi; former Executive Vice President of Wholesale Markets Gregory M. Casey; former Senior Vice President of Pricing and Offer Management Roger B. Hoaglund; former Senior Vice President of Finance William L. Eveleth; former Director of Financial Reporting James J. Kozlowski; and former Senior Manager of Financial Reporting Frank T. Noyes.
Federal prosecutors, who face a five-year statute of limitations to file insider-trading charges, have focused mainly on Nacchio’s stock sales during April and May 2001, which reportedly netted him about $42 million.
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Ron Insana
I just had a chance to speak with Ron Insana today and am very impressed with him. He really knows his stuff. If you aren’t aware, Mr. Insana is an anchor for CNBC and is one of the most well-known names in the investment/financial community.
Ron will be speaking at Internet Telephony Conference & Expo next month in
I am not a fan of winter so the ability to get out of the cold for a few days while learning from industry luminaries and at the same time talking with people deploying VoIP from all over the world is a chance I relish. I hope to see you at the show so be sure to register now.
I am excited to hear Insana speak about VoIP and investing in general. He is a gentleman on air and on my call today. I was very impressed. I am sure he will measure up very well against our most recent ITEXPO headline keynoters Carly Fiorina and Michael Powell.
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$100 Laptop
Will Nortel help make the dream of one laptop per child a reality? Apparently so:
Nortel is a member of the "One Laptop per Child" (OLPC) initiative, a non-profit organization, which was formed earlier this year by Nicholas Negroponte and other faculty members from the MIT Media Lab.
Nortel's Brazilian unit is helping to finalize options for pilot projects in the country. "We are looking at several options and the timeline isn't precise yet. But we expect that in six months we will have a defined way to move forward," said Abreu.
The company is helping
Nortel Brasil is also in talks with educational institutions such as the
The firm is bringing its expertise to identify ways to connect the notebook to networks. It is helping to develop technology such as WiMax/Wimesh, which can be used in remote locations in
One of the biggest challenges is to align various disparate organizations and fit the initiative within government projects, said Abreu.
The corporations that have joined the OLPC initiative have pledged an undisclosed annual contribution to help fund it.
The objective of OLPC is to develop a fully functioning, connected laptop to give an innovative learning tool to as many children as possible around the world - especially those in developing nations.
The machines are rugged, Linux-based, and so energy efficient that hand-cranking alone can generate sufficient power for operation, Nortel said.
The OLPC's pricing goal is to start near US$100 and then steadily decrease. However, some experts are concerned that the low cost of these notebooks may lead to low quality.
The Brazilian division of
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Two-Tiered Internet
The LECs are very smart and have mastered the art and politics of getting what they want in
Now they are seeking to have a dual-tier Internet where they will have the ability to charge content providers for access to high-quality Internet connections. This is a precarious situation for companies like Apple who want to provide video content and others providing VoIP.
I truly hope the tow-tiered system is never allowed to happen.
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Intelligent Design Loses
(AP) "Intelligent design" cannot be mentioned in biology classes in a
Dover Area School Board members violated the Constitution when they ordered that its biology curriculum must include the notion that life on Earth was produced by an unidentified intelligent cause, U.S. District Judge John E. Jones III said.
Several members repeatedly lied to cover their motives even while professing religious beliefs, he said.
The school board policy, adopted in October 2004, was believed to have been the first of its kind in the nation.
"The citizens of the
The board's attorneys had said members were seeking to improve science education by exposing students to alternatives to Charles Darwin's theory of natural selection. Intelligent-design proponents argue that it cannot fully explain the existence of complex life forms.
The plaintiffs challenging the policy argued that intelligent design amounts to a secular repackaging of creationism, which the courts have already ruled cannot be taught in public schools.
The
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