Web Forefront

The prevalent Voice over IP models charge a monthly or per minute fee to establish a voice connection between your Internet enabled device(PC or Handheld) and a land-line, fees which go to defray local gateways in numerous cities around the world, which are then used to place calls as though they originated locally. So say you make a call from Tokyo to Moscow, up to when it reaches the outskirts of Moscow your voice call is routed through the web, but upon arrival it has to switch to the local land-line infrastructure, for which your VoIP provider pays a local phone call fee. Win-win situation, International calls at local rates, but would it be possible to avoid paying this last per-minute or monthly fee to establish this last local call ? Enter Distributed Termination.

Distributed Termination is based on the same principals as the Peer to Peer(P2P) networks that became popular with file sharing, only now applied to sharing telephony infrastructure in order to reduce the remaining costs associated with an end-to-end VoIP call: the local loop or last-mile as it is also often called.

Instead of relying on one single access point to relay VoIP calls as local calls -- with the cost of the call absorbed by the originating party -- the twist involves having hundreds or thousands of local users acting themselves as gateways, defraying or completely absorbing the cost of the local call, in exchange for the originating party's also acting as gateways themselves in their respective local areas. Very much 'a la' P2P: I will share a piece with the network, so long as the network also shares with me.

The concept is clear cut, but of course requires some customers in the loop to install equipment to make it possible, albeit at what can be considered a flat-fee cost structure, contrary to many of the monthly or per-minute models prevalent in VoIP. For example, suppose your grandparents live in Miami and they don't use anything else except a land-line, in order for you to call them from your Seattle home via VoIP, all you would need is someone in the Miami area sharing their equipment and local-line to establish the local call on your behalf, similarly you would share your equipment and local-line for anyone trying to reach Seattle residents via VoIP.

While this model definitely figures to reduce the final cost associated with end-to-end VoIP communication, its a pandora's box in many other fronts. Security for one, having your voice calls routed through 'anonymous' gateways in remote cities, not to mention the legal aspects which local telcos will surely sink their teeth into. In the end, I guess we will yet again test if this technical innovation is sufficient to overcome the non-technical and adoption handicaps it apparently has, you can research these concepts further to make up your own mind at the company's site that is trying to make this happen: OOMA , of which I would assume is just the first in a series of competitors to come.

Related Update: This other company seems to be trying the same approach in the WiFi market -- just replace anything VoIP in the entry with WiFi -- and you've got: FON , seems like an even harder sell in my opinion.