84 Part I • Information Technology
estimated that about 20 percent of households in the
United States have no way to obtain broadband Internet
service (except for satellite), and another 5 to 10 percent
only have a single choice—their local cable television
provider (Lacy, 2005). Consumer advocacy groups believe
that the lack of competition in the marketplace—with the
dominance of the major telephone and cable operators,
such as AT&T, Verizon Communications, Time Warner
Cable, and Comcast—has hindered the spread of broad-
band in the United States (Holahan, 2008). Perhaps the
Federal Communications Commission’s 2010 National
Broadband Plan will push the United States in the right di-
rection. It seems clear that it will take a concerted effort on
the part of the government, private service providers,
broadband content developers, and others if the United
States is to catch up in the broadband arena.Intranets. An important spin-off from the success
of the Internet has been the creation of intranetswithin
many large organizations. An intranet is simply a network
operating within an organization that employs the TCP/IP
protocol. In most cases, an intranet consists of a backbone
network with a number of connected LANs. Because the
protocol is the same, the organization may use the same
Web browser and Web server software as it would use on
the Internet; however, the intranet is not accessible from
outside the organization. It might or might not be possible
for people within the organization to access the Internet.Internet Telephony Grows Stronger
The Internet is not just for data—Internet telephony, also called Voice over Internet Protocol (VoIP), is a
major factor in telephone communications, especially for corporations. VoIP allows the user to make
voice calls using a broadband Internet connection instead of a regular (analog) telephone line. The
advantage of VoIP is that it can significantly reduce telecommunications costs.
In order to use VoIP, a broadband Internet connection is required, either through a company
network or a DSL, cable modem, or other broadband connection. The simplest way to use VoIP is to
plug your existing telephone into an analog telephone adapter—which is an analog-to-digital signal
converter—that is in turn plugged into your DSL, cable modem, or LAN. VoIP providers such as Vonage
and ViaTalk bundle these adapters free with their service. Another option is to buy a specialized IP
(digital) phone that plugs directly into a LAN connector; this is a popular option for businesses. The third
option is to use your computer as a telephone; in this case your computer requires some software, a
microphone, speakers, and a sound card as well as a broadband Internet connection. With this option,
you can download the required software from Internet, for free or a very small charge, and make local
and long-distance calls to other computers for free (except for your ISP fee). To interface with the
public telephone network, however, you need to go through a VoIP provider. A variety of services (and,
therefore, costs) are available, all of them quite reasonable compared to traditional telephone services.
For example, Vonage provides unlimited local and long-distance service in the United States for $25.99
per month (with a one-year commitment), and ViaTalk provides a similar service for $16.95 per month.
Introductory offers with even lower prices may be available from these and other VoIP providers.
Because of the potential cost savings involved, businesses have been quicker than individuals to
jump on the VoIP bandwagon. There are two primary approaches (and several variations thereof) to
providing VoIP in businesses: With one approach, the business buys the IP phones, the Ethernet
switches, and the servers that run the call-control software and operates the VoIP network itself; with
the second approach, the business buys the IP phones but subscribes to a hosted VoIP service for
running the network. For the first approach, the primary vendors of VoIP equipment include Avaya,
Cisco, Alcatel-Lucent (France), Siemens (Germany), and ShoreTel. For the second approach, there are
many hosted VoIP providers, including giants AT&T, Verizon Communications, and Sprint Nextel as well
as Vonage, Covad Communications, 8×8, and Avad Technologies. According to one estimate, Internet
telephony represented nearly 70 percent of the enterprise (i.e., large company) telephony market in
2009 (Viscusi, 2010). VoIP telephony is not as popular for small businesses, but it remains a viable
option to be considered. The home market for VoIP is growing largely because consumers are buying
bundled services (i.e., broadband Internet access, television, and VoIP telephone) from their cable
company or wired telephone provider.
[Based on FCC, 2010; King, 2006; and Viscusi, 2010]