VoIP: It Works

When Jon Aust, managing director at EPSN LLC — a billing software company catering to health care providers — helped established its office in Sterling, Virginia earlier this year, one of the most important decisions the company faced concerned the type of phone system it would choose.

The company faced three main options: a traditional small-office system with service from local telco Verizon, an integrated voice-and-data solution using VoIP (voice over Internet protocol), or IP telephony technology with service provided by an independent broadband service provider. “We’re primarily a sales organization,” say Aust. “Reliable phone contact with our customers is a major concern.”

Regardless if they’re in start-up mode, establishing a branch office or upgrading their main telecommunications systems, more and more small business owners face a similar decision. Both EPSN and Hahn & Associates PC opted for VoIP and haven’t looked back.

Comparable Quality
EPSN ultimately chose service from IP network provider DSL.net, a move it considers a no-brainer. DSL.net provides local and unlimited long distance phone service for 27 lines, plus high-speed Internet access on the same T-1 (1.55 megabits per second) connection for a flat monthly fee of $1,000. DSL.net’s network switches route all calls to the appropriate extensions at EPSN’s offices, much like the service offered by the phone company, Centrex .
“The economics of it were pretty simple,” says Aust. “There’s a clearcut advantage to going with IP telephony. DSL.net gave us our data and voice service for a price you can’t touch in a traditional telecom environment.”

That doesn’t mean EPSN made the decision lightly. Much of the firm’s voice communications requirement goes to an outbound call center where agents call doctors, dentists and other prospects and customers across the country. Reliability and call quality are vital. “Our main concern with the technology,” says Aust, “was whether VoIP could provide the service quality we need so that customers wouldn’t have any issues with it.”

VoIP technology takes the analog audio signal from a phone set, translates it into the data packets — used to transmit information on the Internet — and sends them out over an Internet-like IP network, or sometimes over the public Internet itself. At the other end, VoIP systems or phone sets reverse the process, translating the IP packets back into analog audio signals which then go over the PSTN (public switched telephone network) to their final destination.

As Aust points out, there were problems in the early days of VoIP. The voice quality was often tinny and harsh. Calls would cut out. Data packets were lost, resulting in garbled voices, or packets arrived late consistently — referred to as latency – which resulted in choppy conversations. “I’ve always been skeptical of the technology,” Aust says. “The price points were very, very attractive, but I was never willing to suffer the quality issues.”

Now, however, VoIP service providers like DSL.net can deliver service that is comparable to the telcos, he says. “Those early problems have been solved. IP telephony makes absolute sense — at least for an operation our size.”

Aust holds no reservations about the service — for either connection or audio quality. “We haven’t experienced any service issues that relate to the VoIP technology,” he says. “We get dial tones, the voice connection is clear, and we get the full dynamic range of a voice.” The ultimate proof? “We’re talking on it now,” Aust points out during our interview. It sounds as good as any telco connection.

It’s possible that EPSN could experience a degradation in service quality if all 25 employees were connected to the Internet and the phone at once — since all of the voice and data traffic is going over the same shared T-1 line “I’m sure you could create an environment in which something would give, but I believe it would be the data service that would degrade. In any case, we haven’t seen it yet,” Aust says. He points out that the firm also hosts its Web site at the office, so data traffic from Web browsers comes over the T-1 line as well.

Easy to Manage
VoIP makes sense for small businesses for more reasons than just price, Aust adds. If EPSN had gone the traditional route, it would have had to purchase a PBX (Private Branch eXchange) or key telephone system to route calls coming into and out of the office, and it would then have to worry about managing and maintaining that system.

“The complexities in terms of operating and managing that kind of a system are more than a small business like ours, particularly in our early phase of startup, wanted to deal with,” Aust says. “It’s not just the difference in service cost from Verizon, it’s also that we’d need people to maintain the equipment and service.”

With the DSL.net solution, the only equipment the firm had to buy was Internet Protocol-compliant phones — DSL.net does all the network switching. EPSN bought Cisco 7965 phones for “practically nothing,” Aust says. The 7965 is an earlier model that Cisco no longer markets. They cost “a few hundred dollars” each when new.

More Service, Less Money
Hahn & Associates PC, a seven-person accounting firm in Falls Church VA, in the metro Washington DC area, also chose DSL.net to supply integrated VoIP-based voice and data services.

In this case, it’s easier to quanitfy the cost savings. The firm was paying Verizon between $500 and $600 a month for local service for five phone lines plus advertising.in the yellow pages. Most of the firm’s calls go to local clients, so it typically paid AT&T under $100 for long distance. And it was paying DSL.net $119 for a 272 Kbps (kilobits per second) Internet access service.

Under the new deal with DSL.net, the firm replaced its Verizon local service and AT&T long distance fees and the $119 it was paying DSL.net for Internet access with a flat rate of $500 a month.

DSL.net provides a T-1 (1.55 megabit) line that carries both voice calls for the original five extensions, plus three additional, unlimited long distance calling in North America and all the firm’s Internet traffic. “It wasn’t really the phone service so much as the T-1 line for fast Internet access that was the main attraction,” explains the firm’s founder Thomas Hahn.

Hahn still pays Verizon about $100 for advertising, so his total communications costs run about $600 per month. While this is only slightly less than what he was paying before, the firm now gets a much faster Internet connection, plus three additional outside lines.

DSL.net also provides a network router/gateway that performs analog-digital-analog conversions on voice calls and routes them to Hahn’s existing Pansonic key phone system. The firm continues to use existing phone sets as well.

Hahn, while no technologist, was aware of VoIP and the issues around it, but was not overly concerned about service quality. And he is generally happy with the service now. “I’m definitely satisfied with the quality of the calls,” he says.

He has experienced a few minor glitches, however. Faxes would not go through at first, but that problem has been fixed. The one remaining problem probably has little to do with VoIP. When he or his staff call customers from some of the firm’s phone lines, customers see a call display message saying, ‘Private Number’ instead of Hahn’s name and number. He’s afraid customers might screen out his calls thinking they’re telemarketing calls.

Initially, price was a bigger impediment. Hahn couldn’t afford what DSL.net originally quoted when he approached the service provider about supplying his voice communications needs. DSL.net later came back and offered him a lower price which he subsequently negotiated down even further. This is a point worth noting.

When small businesses deal with telcos, they rarely if ever have any bargaining power. When they deal with service providers specifically targeting smaller enterprises — which includes many VoIP service providers — they do.

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