Gig-E vs SONET (Cont'd)

“We are already seeing businesses switch their long distance voice to the Internet,” says Murphy. "They are finding that the quality is acceptable and the cost/benefit ratio favors the lower-cost service.

"Eventually the people building the metropolitan Gig-E loops will want to connect them to other cities, and they will create Gig-E long-haul links to do that.” Inevitably voice, as well as data, will travel those Gig-E packet networks.

As this happens, the voice carriers will be caught in a hard place. On the one hand they cannot abandon SONET and its guarantees of high-quality voice transmission. Legally, they are charged with guaranteeing a specific voice quality, and they cannot do that with Gig-E, says Murphy. Also, a large portion of the important residential voice market will be very resistant to adopting Internet telephone both for quality and technical reasons. People like the simplicity of the phone system. They lift the headset and it works.

On the other hand, increasing numbers of businesses are likely to be attracted to Gig-E packetized voice. While the quality is noticeably less and the connections more sensitive to network interruptions, that quality is comparable to cellular in many areas, and the lower cost will make a noticeable impact on business bottom lines.

The voice carriers cannot afford to lose either market. Therefore, their best defense may well be to offer their own Gig-E long-haul data and VoIP packages to their business customers at prices competitive to the Internet-based competition. They can differentiate their services by offering to bundle in traditional SONET voice so that, for instance, a business could use VoIP solution internal long-distance but SONET for A-list customers. In this way, with strong marketing the carriers could turn the tables on the Internet voice carriers, preserve their market dominance, and increase their flexibility to provide the service that the marketplace demands.

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