Suddenly, the concept of using the Internet as a way for people to talk to each other–not through e-mail, but the spoken word–has gone nuclear. And even before shedding its glitches. Last week Netscape announced that the new version of its Navigator Web browser includes technology to use the computer as a phone. Microsoft then announced that the next version of its browser, due this summer, would include a similar feature. These developments will supercharge this growing industry, serving as many as 63 million cyberyakkers by 1999, reckons International Data Corp.
This phenomenon was also the force behind last week’s $2 billion merger between a traditional phone-technology company, MFS Communications, and the Internet service provider UUNet. “We’re really convinced that this is a fundamental shift in the nature of communications,” says MFS chairman James Q. Crowe, who predicts that in the not-too-distant future the entire infrastructure of voice telecommunications will move to the Internet. “At a certain point in time you’ll be able to buy a telephone in Kmart that, under the blankets, is really an Internet access device,” says Michael Goldstein, head of Voxware, a software company.
It turns out to be relatively easy to adapt the Internet to speech communication. After all, the global system net was designed to shuttle information around. Transforming your computer into a phone is simply a matter of loading the software into a machine equipped with basic multimedia capabilities (sound technology, microphone), hooking to the Net and typing in the right address for the person you want to talk to. If your friend is online, he or she will get a message asking whether to accept the call. if so, the two of you will talk into your respective mikes and listen through the computer speakers. (If your friend isn’t online, you can, of course, leave a message.)
Since it’s a lot cheaper to move data on the Net than on the phone system, online calls will cost a lot less. (Crowe of MFS estimates that it’s a hundred times cheaper.) The computer also exceeds the humble telephone in versatility. The current crop of products not only includes some of the jazzier innovations we’ve seen in the telephone market-caller ID, voice mail and such-but more exotic features. You can get wiretap-proof encryption, or the ability to share documents and doodle on a common virtual white board while the conversation goes on.
Is there a catch? Of course. Most glaringly, you are limited to calling those who are both online and equipped with the same brand of phone software you are using. Then there’s the quality of the transmissions. The conversational flow can be choppy, a vocal equivalent of typing faster than a word processor can display text on screen. And a problem called “latency” means that between the time a quip is uttered and the listener chuckles, a second or so has elapsed. Finally, setting up and using these tools, like many other things on the Internet, can be roughly as difficult as assembling a mountain bike.
The good news is that the industry, eying the prizes to come, is working overtime to address these problems. As the software evolves, it will almost certainly become easier to use. More bandwidth will increase voice quality and, one hopes, insure that all that digital gab doesn’t overwhelm the Net itself. Best of all, almost everyone agrees that a standard will soon be set so that the user of any product can talk to users of the others. Yes, even Netscape navigators will ring up Microsoft explorers. And schemes are already underway to allow phone calls made on computers to ring up standard phones and vice versa. “The two systems will weave together,” says Robert Kennedy, president of NetSpeak, which sells a product called WebPhone
A thornier matter is potential regulation. An organization called ACTA, representing small long-distance carriers, has petitioned the FCC to stop people from talking on the Internet, charging that it represents unfair competition. Since the FCC claims devotion to competition and innovation, don’t count on a favorable ruling. Especially since the companies you would think would most object to Internet telephony–ding-dong giants like AT&T, MCI and Bell Atlantic-profess to see it as not a threat but an opportunity. “Nobody big is really fighting it,” marvels Netscape VP Marc Andreessen. “The long-distance companies see it as a way to disenfranchise the Baby Bells. The Baby Bells see it as a way to disenfranchise the long-distance companies. The cable companies see it as a way to compete in the phone space.”
Are you wondering how these companies plan to make money from this? Don’t worry-they’ll figure it out. One idea is to offer multiple levels of service. “There might be different billing models, with standard and prefer-red service,” says Elon Ganor, CEO of VocalTec, an Israel-based maker of the best-selling Internet Phone software. If you’re happy to carry on a conversation that sounds like a dispatch from a war correspondent, you may still get off cheap, though probably not for that twenty-buck flat rate available today. But for an extra price your Internet provider, who may well be the same friendly conglomerate who currently sells you phone service, will provide a higher-quality line that guarantees your conversation will be as clear as glass, or at least fiber.
Meanwhile, there are already plenty of pioneers happy with what’s out there now. Vendors report popularity with retirees who use it to keep in touch with friends and family. And businesses are beginning to dial in. David Stephen Murphy of Damar Group, Ltd, a Columbia, Md.-based book-publishing company, uses the $49 WebPhone software for contact and support of international customers; he has no complaints with the quality and is rapturous on the cost. “We use it on a daily basis,” he says, “and some months we save a thousand dollars.” As far as he’s concerned, it pays to switch.
