on-demand service providers selling real-time communications


Today consumers think of telecommunications in terms of both products and services. Starting with the Carterphone decision by the Federal Communications Commission in 1968

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Today consumers think of telecommunications in terms of both products and services. Starting with the Carterphone decision by the Federal Communications Commission in 1968,1 it has become permissible and increasingly common for consumers to buy telecommunications applications or equipment as products as well as services. For example, a customer-owned and customer-installed WiFi local area network may be the first access link supporting a voice over Internet Protocol (VoIP) service, and a consumer may purchase a VoIP software package and install it on his or her personally owned and operated personal computer that connects to the Internet via an Internet service provider.

The technologies used for telecommunications have changed greatly over the last 50 years. Empowered by research into semiconductors and digital electronics in the telecommunications industry, analog representations of voice, images, and video have been supplanted by digital representations. The biggest consequence has been that all types of media can be represented in the same basic form (i.e., as a stream of bits) and therefore handled uniformly within a common infrastructure (most commonly as Internet Protocol, or IP, data streams). Subsequently, circuit switching was supplemented by, and will likely ultimately be supplanted by, packet switching. For example, telephony is now routinely carried at various places in the network by the Internet (using VoIP) and cable networks. Just as the PSTN is within the scope of telecommunications, so also is an Internet or cable TV network carrying a direct substitute telephony application.

Perhaps the most fundamental change, both in terms of technology and its implications for industry structure, has occurred in the architecture of telecommunications networks. Architecture in this context refers to the functional description of the general structure of the system as a whole and how the different parts of the system relate to each other. Previously the PSTN, cable, and data networks coexisted as separately owned and operated networks carrying different types of communications, although they often shared a common technology base (such as point-to-point digital communications) and some facilities (e.g., high-speed digital pipes shared by different networks).

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