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Since last year when we took an early look at voice over internet (VoIP, the P stands for protocol) things have changed with bewildering speed. Fuelled by the rapid take-up of broadband in the past couple of years, VoIP has a life and a series of internal controversies all of its own. Broadband itself is set to kick off into stratospheric 24 Meg/second speeds, enabling really smooth audio and video. WiMAX, the forthcoming local area wireless network, presages a cellphone-like version of VoIP, one up in terms of range from wireless VoIP and managed via WiFi or Bluetooth. The cellphone companies, already under notice for some charging practices, are casting around for goodies with which to fight back and are actually contemplating cutting prices.

But VoIP take-up is happening inexorably. Airbus, the plane-maker, is about to switch its 40,000 employees to VoIP.

Oxford University now has a widely based VoIP system. It is taking off because existing providers, mainly BT, have had a monopoly and little incentive to offer more financially attractive packages.

BT has argued that cellphones have been astonishingly successful despite the very high cost of their calls and that price obviously isn't an issue. But of course it is.

ADDING VALUE EVERYWHERE Everywhere you look, someone is adding special value to their favoured telephony systems. In July, Paul Zimmerman, inventor of Pretty Good Privacy internet cryptography, announced that he should have telephone privacy software available next year for VoIP. BT has brought out its Bluephone, which links wirelessly to an office or domestic wireless access point and, when it goes out of range, transfers to a Vodafone cellular system. Skype, which encourages third-party plug-ins, has recently announced a videoconferencing plug-in from Santa Cruz Networks which also facilitates Skype's ability to share photos, applications, documents and spreadsheets - but now for up to 200 people at any one time.

UNDER THE HOOD Think of VoIP as a variation on email. Sound gets digitised via your computer's sound card and sent off via the internet to another computer whose sound card converts it into sound again. Geeks were doing this years ago using simple software and dial-up modems but it was a fairly chancy business. Telephony needs to be able to cope with immediate to-and-fro communication. This is where the sheer speed of broadband has made the difference.

Everything happens so fast that it now looks seamless to the broadbander despite the often complex routing.

Here was the other breakthrough: the ability to communicate with the world outside the closed environment of the internet. And this is where it gets more complicated. On one hand there is Skype. It is the pioneering, proprietary, free VoIP system for making computer-to-computer calls. It has, according to co-inventor Niklas Zennström, 42 million users. He says things that users like to hear: 'I think charging for calls belongs to the last century.' You have to take that cum grano salis because all the big (and small) telephony people are busy trying to work out how to make big bucks from VoIP - and Skype's Out service, which lets you call people in distant countries on land or mobile numbers for about half the price of a local call, makes sure it bills you.

PHONEY WAR An alternative to Skype is SIP, (Session Initiation Protocol). There are other protocols, such as H323 and also MGCP (media gateway control protocol). But SIP is the most common and allows such things as instant messaging, video and audio conferencing and network gaming. Windows XP's Windows Messenger is tied in with SIP. So SIP looks likely to be the protocol taken up by the business world, leaving Skype to the domestic market - not least because Skype's software is free. On the other hand, Skype's Zennström apparently says that his application was written because SIP was 'such a bad protocol'. But SIP proponents, mostly big commercial operations anxious to get VoIP institutionalised, point out that Skype's programming origins in file-sharing mean that some new firewalls will automatically exclude it. In any case, neither the SIP nor the Skype people are prepared to take the first step to create interoperability between the two systems. However in the US, PCPhonelines is now selling the $50 (£30) VTA1000 dual-mode Skype/SIP phone which gives users the choice of systems. That is not the end of the battle. But for somebody buying a VoIP system for the office, the technicalities are probably not as important as the installation price, maintenance charges and call charges.

MOBILE FIGHTS BACK With the possibility of WiFi and Bluetooth wireless VoIP and the introduction of WiMAX, remote VoIP will provide an alternative to cell phones. Not happy with this concept, the cellphone companies are working out ways of fighting back. Vodaphone has decided to launch a low-cost, flat-rate 3G service.


If everything is moving so fast, isn't it a good idea to stay with BT until things settle down? Not really. Because next year BT is to start taking its whole system IP (internet protocol) and plans to have done so around the UK by 2009. This won't, admittedly, be on the internet but on BT's private internet. But it will accommodate company VoIP systems because, like it, they will be digital. But you shouldn't expect it to be any less expensive.

This move confuses the issue of how we get VoIP implemented and paid for. Currently, if you have a BT line what you are doing is using VoIP telephony over an existing telephone system for which you still pay telephone line-rental charges. There is a persuasive (to VoIP customers at least) argument for paying only for internet connection. One industry prediction is that as companies move over to VoIP for simple cost reasons, they will eventually be able to take packages involving voice, internet access, video telephony and other services such as high definition television. What would be nice would be the right to choose not to have all the football channels with every package.

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