Tuesday, August 15, 2006

COIP or Cautiously Optimistic about IP

It's been the essential suffix for accronyms. The must-have accessory for 3 letter and 4 letter abbreviations of the technology world. Since forming one half of an extremely successful duo (along with TCP) in the early days of the Internet, IP (Internet Protocol) has gone from strength to strength, being involved with storming the Bastille of Voice and even taking on the might of Television.

IP which essentially enables / is synonymous with Packet Switching technology - allows you to send data before a circuit is set up. Hence the term "connection less" and also the reason why web pages are "stateless". Packetization is what enables the fault tolerant public internet. IP addresses allow millions of computers across the globe to be uniquely identified.

No wonder then that the march of IP has been inexorable. But as we all know the Internet wasn't designed or set up to replace telephones or television. It wasn't intended to deliver high quality of service. And although IP version 6 (the next version due to be adopted over the next few years) could address some of these problems, current services have to innovate around these challenges.

Which is one of the key reasons for bearing in mind a key distinction between IPTV and delivering TV content over the Internet, which also uses IP but isn't IPTV. What's the difference? Well this isn't an "industry definition" but IPTV should be used to define a set of services where the quality of service (picture, sound, frames, resolution) are all controlled and maintained at a level equivalent to Television. This is different from dumping a lot of content onto a server and allowing people to watch it over the Internet. Though the latter uses IP as well, the quality of viewing is determined by completely "extraneous" variables such as volume of traffic at the time, available bandwidth for the user and the provider, number of hops from the user to the server etc. In fact you can even deliver TV over the Internet but not use IP (this was, I think what HomeChoice from Video Networks was doing - they had their own protocol instead of IP). Of course it remains to be seen what Tiscali will do, having purchased Video Networks.) Of course if we all had fibre to the home and bandwidth became "infinite" then this distinction would lose value. AT&T and Verizon are both trying to make this happen in the US.

The same goes for VOIP. While you can connect and talk over a number of devices, there is a current gap between quality of service on public telephones 99.99% acceptable call quality, whereas VOIP providers are at 80% on average. No wonder analysts are questionning Skype's growth and seeing a flattening out.

Bottom line, IP is still an irresistable force. But it's velocity of world domination may depend on the quality of networks, or the emergence of IPV6. In the meanwhile, providers will need to pay to play. Only by delivering truly comparative services (with traditional TV or Phones) will IP based services succeed and for the next 24 months, this could need some investment as well).


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