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Internet Telephony

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Internet Telephony, or voice over IP (VoIP), transports voice communications over IP data networks, such as the Internet, instead of over the traditional public switched telephone network (PSTN). Internet Telephony can include any type of voice, facsimile, or voice-messaging service. The service works by converting the analog voice signal into a digital format and transferring the data as Internet Protocol (IP) packets over the Internet. The IP packets are later translated back into voice data for use by traditional phone networks.

Technical Background

Internet Telephony software comes in many forms. It can be part of a Web browser program or a stand-alone Web product. Internet Telephony service may be used to send or receive calls with traditional phones or other Internet Telephony clients. Such software typically sends IP data packets containing voice data over existing IP data networks to an InternetTelephony service, which converts the packets into analog voice data for transmission to traditional phones.

Bandwidth limitations, packet loss and software incapability have limited to widespread deployment of Internet Telephony. All affect the quality of service of for Internet telephony. Bandwidth limitations inhibit streamlined transfer of the communication and lead to transfer and response delays. Packet loss causes interruptions in the communication service when the packets fail to reach their destination. Packet loss takes the practical form of patches of silence during a communication. Software incapability problems can result for a variety of reasons, but is mostly caused by companies creating their systems to work only when the same software is used for both sending and receiving.

However, with the wide proliferation of high bandwidth, low-latency internet connections (typically cable modem or DSL lines), these limitations to Internet telephony are quickly disappearing. Indeed, many cable companies now offer Internet Telephony service to their high-speed cable modem service users. The growth of Internet Telephony raises many policy issues.


An advantage of VoIP is that those who wish to avoid toll charges for long-distance calls, or avoid traditional telephone service altogether. VoIP also allows for encrypted voice communication through Internet encryption--not currently possible under traditional telephone service regulations--and enables callers to talk to a group of people at one time, much like a conference call.

The issue of the potential regulation of Internet telephony raises the problem of geographical boundaries. Traditional regulatory schemes are based on a system of geographical boundaries, into which the Internet does not easily fit. Concepts of taxing, variant rates for long-distance calls and general oversight under a political entity's police power will need to adapt to the technology.

A key issue is whether to characterize Internet Telephony as a "communication service" or an "infomation service" under the current regulator scheme. Classifying Internet Telephony as a communication service would impose the burden of Communications Assistance for Law Enforcement Act (CALEA) compliance on Internet Telephony providers.


The International Telecommunications Union (ITU), part of the United Nations, focuses on integrating and setting standards for international telecom networks and services. In May 1996, the ITU initially ratified Recommendation H.323, which sets the standard as to how voice, data, and video traffic is to be transported over IP-based local area networks. In July 2003, the ITU approved a new version of Recommendation H.323.



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