Do CLECs Have Their Heads in the Sand about VoIP?

I’m at the CompTel/ASCENT show right now, and one of the most interesting meetings I had today was with Michael Khalilian, chairman and president of the International Packet Communications Consortium (IPCC). He says that despite the fact that UNE-P is going away and CLECs clearly need to find new business models, CLECs as a whole are not investing in VoIP.

Fear, he believes, is a key force holding CLECs back from taking the VoIP plunge. He thinks CLECs are operating under the false assumption that VoIP — and E911 for it — doesn’t work, which he says is a message being promulgated by both incumbent providers and the media at large. Incumbent service providers, he says, will push heavily to discredit new technologies that will replace UNE-P. That way the CLECs will stay with ILECs for access and switching even when UNE-P dissolves.

A wrong-headed view on the cost of VoIP is another factor causing CLECs to dig in their heels, he says. Wall Street has spread the word that Vonage-types are spending $100 to $200 per head on customer acquisition, according to Khalilian, who says that those numbers are greatly inflated.

So Khalilian wants to emphasize to the CLEC community that VoIP does indeed work, and that the technology costs for VoIP are below $100 per subscriber. That number was inflated only because of the large amount of money pioneering VoIP service providers spent advertising through major media outlets, he says. “Some of our friends spent over $100 million in the last couple years” on marketing, he adds. “But if Vonage didn’t educate the [market], half of these vendors wouldn’t be here.”

Khalilian hopes that by spreading those messages, competitive carriers will reach a comfort level with VoIP. “As the service providers slow down,” he says, “they’re going to hurt themselves.”

The need to spread that message has forced IPCC to evolve from a protocols and standards organization to a technical marketing organization charged with pushing VoIP forward.

IPCC at CompTel/ASCENT last month held an E911 working group meeting, as well as a handful of sessions to get its message out.

“We need to just clean up our message,” he says, and convince the CLECs not to rely on reselling somebody else’s service on the traditional network. The current path most CLECs are taking, he says, simply positions them as an extension of the RBOC sales force.

Stepping into the Sonus Networks booth where Michael and I were sitting, Ron Contrado, CEO of Homisco and a COMPTEL board member, added that CLECs “really need to get out ahead of the curve and get into other access, such as wireless” and do new things like hosted PBX and service bureaus — “something that causes the minute to stick.”

Until next time,

Paula Bernier

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