The History of VoIP

Many eons ago, when neon pants were popular and Will Smith was still the Fresh Prince of Bel-Air, VoIP software was introduced to the brave new world of 1995.

VoIP (Voice over Internet Protocol) technology uses the Internet to transmit phone calls as digital data packets. This is much faster and cheaper than the older method of using copper landlines to send voice as analog data.

Through the years, VoIP technology has expanded to include features like IP video conferencing, IP faxing, music on hold, mobile capabilities, and a high bandwidth capacity for concurrent calls. VoIP technology has also seen changes in how it is regulated by the government, and those regulations are only getting tighter as VoIP continues to rise in popularity.

To understand the future of VoIP technology and its affect on phone users, one must first take a quick gander back to that fossilized past of 1995 to see how VoIP came about, how it grew and changed, and how it is changing the world we live in today.


1995: And So It Begins...

The Good Old Telephone is Invented

The first phone call was made in 1876 through the independent work of Elisha Gray and Alexander Graham Bell. The first public phone service was crude at best, as phone users had to install the telephone lines themselves and they could not own their own phones, but merely lease their phones from the company. Phones calls were sent over landline as packets of analog data.

The Internet is Invented

To understand VoIP, it’s important to understand the invention of “digital” information. Around 1943 mathematician Dr. Claude Shannon published "A Mathematical Theory of Communication," which introduced the idea of communicating in binary code. This binary code structure is the basis of all digital communication, from cell phones, to the Internet, to VoIP. The Internet began in 1968 by the U.S. Department of Defense. The Internet was meant to work as a decentralized communications network, which it still is today. The Internet is a huge network of interconnected computers that have agreed to certain rules, such as the universal recognition of IP addresses and URL codes, so that things like websites are recognized by each computer. VoIP uses binary data packets to send voice data, and use IP addresses as “Internet phone numbers”.

VoIP Arrives on the Scene

As the Internet and the personal computer were becoming more popular, tech entrepreneurs saw the potential in sending phone calls over the Internet instead of paying for expensive phone service. Analog data does not travel very well, so it needs help along the way with telephone poles and other such physical transfer points to help the call reach its destination. These stops are accounted for as “toll charges” when making a long distance call. Digital data, on the other hand, can be sent over a long distance without ever changing hands, which makes it easy and cheap to send a long distance phone call with VoIP.

In 1995 the first VoIP software was sold on the market by an Israeli company called Internet Phone. VoIP required that both callers have a computer equipped with the same VoIP software, along with a sound card and a microphone. Callers could only communicated back and forth through computers using the same program.The service was spotty at best, as the Internet itself was spotty and slow. However, as the Internet has grown more robust, so has the HD quality of VoIP phone calls.


1998: When VoIP Met the PSTN

VoIP had an important breakthrough in 1998. Providers started to produce VoIP software that was capable of translating calls from digital data to analog data so that VoIP calls could connect to the PSTN. The PSTN (public switched telephone network) is the network that connects all traditional landline phone service. The ability to translate calls meant that someone using VoIP could now call someone using traditional phone service and vice versa.

This PSTN capability, along with better broadband Ethernet service allowed VoIP to flourish.


2005: VoIP Gets Regulated by the FCC

VoIP boomed in the 2000s for both residential and business customers. VoIP also became a popular international calling alternative to traditional service. The FCC started to take serious notice of VoIP in 2005. The FCC (Federal Communication Commission) is the government agency that has regulated traditional phone service since 1934 to ensure that telephone providers use fair business practices.

For many years, the FCC viewed VoIP as a sort of “in between” service: between a telecom service and an information service like the Internet (which the FCC does not really regulate). However, in 2005 the FCC started to add regulations on “interconnected” VoIP providers, which are VoIP providers that can access the PSTN to send a call to a customer with a PSTN phone number. Nearly all VoIP providers are interconnected VoIP providers. These regulations are still in place today and include:

  • Interconnected VoIP providers must offer 911 capabilities.
  • Interconnected VoIP providers must comply with the Communications Assistance for Law Enforcement Act of 1994 (CALEA), which allows law enforcement to search digital data such as emails.
  • Interconnected VoIP providers must contribute to the Universal Service Fund, which supports communication services in low-income areas.

Since 2005, the FCC has added more regulations onto interconnected VoIP providers including:

  • The FCC requires interconnected VoIP providers to comply with Local Number Portability (LNP) rules. VoIP providers must port phone numbers in one business day.
  • VoIP providers contribute to the administration costs of the LNP.
  • The FCC limits interconnected VoIP providers' use of customer proprietary network information (CPNI), like the users’ telephone calling records.
  • Interconnected VoIP providers must comply with the Commission's Telecommunications Relay Services (TRS) requirements, including contributing to the TRS Fund, which supports communications services to people with speech or hearing disabilities.
  • Interconnected VoIP providers must ensure that their services are available to and usable by individuals with disabilities, if VoIP access is readily achievable.

2013: The Future and Beyond of VoIP

Experts now predict that the PSTN will become obsolete in 2018 due in part to the popularity of VoIP technology. According to a recent PEW study, 25% of the US population has used or is currently using VoIP technology. There have been other technological advancements in 2013 that will play a huge part in VoIP’s future, including the expansion of WiFi routers in places like buses, airplanes, parks, even inside streetlamps. The FCC will continue to play a big role in VoIP’s future as well, starting with more regulations like antidiscrimination rules and the requirement that VoIP service stays availability even during a natural disaster.

In the more distant future of VoIP and Internet service, continued technological improvements will continue to improve customer access to VoIP. For instance, some states have fought through the court systems to open up local government-run Internet networks, and tech company Google has begun to retrofit entire cities with more fiber optic Internet service, which is 100x faster than the average Internet speed.

All of these changes, from Internet speed, to new VoIP regulations, to more WiFi-enabled areas, create a very bright future for VoIP service, indeed.