Google Voice and FaceTime – Why the Carriers Are Losing Their Voice

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NSFW: Playing Hangman on Twitter

Lately it seems like there is endless news around messaging, VoIP and video calling. Apple recently announced they’d added FaceTime support for the Mac, and had shipped 19 million FaceTime-enabled iOS devices since June. Google Voice also made headlines last week for an outage, but I think the bigger news associated with that downtime is how fast they’ve been growing. And there’s been a flurry of startup activity around messaging and communication as well, such as the super innovative GroupMe releasing an Android App.

The resounding theme from all these seemingly disparate announcements is that messaging, voice, video, and chatting applications are on fire. Sure, we all use social media, but it sure hasn’t dampened people’s affinity for texting or making a call.

More revealing, all of this innovation seems to be happening at the application layer, far from the AT&Ts of the world, who are missing another wave of innovation which is happening on top of their networks. It’s very evident that Google and Apple are making overtures to become your de facto voice and messaging provider, and the carriers are sitting with their pants down, struggling to plan how they stay relevant.

Why the Carriers Will Become Irrelevant in Voice and Messaging

It’s easy to bash carriers. I recently wrote about the technical reasons why AT&T’s network is so awful which got their higher ups to contact me and whine about what I’d written. Truth is, there are long-standing reasons behind AT&T’s failures—network decisions take many years to unfold, especially since the telco monopolies are, by their very nature, slow to respond to change and innovation.

But forget the past, let’s look at why the carriers are poised to become more and more irrelevant beyond being pipe providers in the future. And let’s do so specifically around voice and messaging, the bread and butter services that they evolved to provide.

Imagine the future of communication on your smartphone: you’re on a video call with your significant other across the world on different networks, you tap your screen, and instantly their phone screen mimics yours as you flip through photos of your trip while continuing your call. Or imagine sending out an MMS to a group, and when each of your friends open it they immediately tap into a live HD audio/video stream which you’re broadcasting to everyone. No delays, no dialing, and no going in and out of different apps—it just works.

All of these amazing use-cases, and more, will be enabled by 4G wireless standards. This is because 4G is 100% IP-based, which is what the internet was founded upon. Today, voice is routed separately from data on mobile networks due to legacy “circuit-switched” architecture. With LTE, the first phase of 4G, voice and video sessions will be packetized and sent over the network from your smartphone just like any other application layer data, which will open a range of new capabilities.

LTE Now; Voice in 2013 – Are You Kidding Me?

But there’s a roadblock to realizing this vision of ubiquity. Right now the carriers can’t agree on what’s happening with respect to voice. In classic fashion, they are stuck in endless consortium meetings arguing about standards instead of moving forward, picking one, testing, and deploying.

Some carriers are behind a voice technology called IPMS (IP Multimedia Subsystem), which is 100% IP-based, and others are clinging to VoLGA (voice over LTE via generic access), which splits mobile voice and messaging apart from the IP-based LTE network in a technique called “circuit-switched fallback”.

Guess when they plan to resolve all this? 2013! Per this AT&T slide from a few weeks ago. And it’s easy to envision any resolution extending years past this date, which is crazy considering what’s at stake for the carriers as they struggle so stay relevant in voice communication.

FaceTime best foreshadowed their dwindling relevance, since video calls over WiFi bypass the carrier network entirely. And though FaceTime doesn’t yet work on 3G you can see the writing on the wall. Meanwhile Google Voice still requires you to dial out using your carrier’s network, but Google’s acquisition of Gizmo5 last year foretells this will go away in favor of full VoIP too. Then of course there’s Skype, which now works over 3G, bypassing the voice network of your carrier too.

The Bureaucracy Behind Why The Carriers are Missing Out

Carriers are in the process of transitioning from a telco model, which is closed, to the internet model, which is open. In the old days it was deemed acceptable for them to stew over standards for multiyear periods, but innovation on the internet doesn’t work this way.

Recently at CTIA, Verizon declined to discuss the VoLTE situation because they simply don’t have anything cohesive to communicate. This is embarrassing, considering their LTE network is supposed to be ready by the end of the year. What this means is that voice will be routed over their old network for years to come—fabulous.

This is absurd, and is symbolic of how consortiums and standards bodies work in telecom—anyone who has ever sold to or interacted with a carrier understands the glacial pace at which they move. What the carriers really need to do is get out of bed and resolve how voice will be packetized, then move forward and deploy it. It’s simply embarrassing that they can’t do this, but it’s not surprising, since they still receive so much revenue from voice plans.

The Internet Wins Again – Go Back to Sleep Carriers

The future in mobile communication is being written at the application layer—both by innovative giants like Apple and Google, and smaller startups such as GroupMe and Twilio—not at the infrastructure layer by the AT&Ts and Verizons of the world. The carriers had a chance to provide a better voice and messaging experience with 4G, and to charge a toll for that experience, but they are missing that window.

Apple and Google are closing it fast. Back in June, when iPhone 4 was released, people wondered why Apple made FaceTime an open standard. Here is one important reason why: A closed standard may have caused an overly fragmented market for video-calling, which would definitely benefit the carriers. This is  likely, at least in part, why Steve Jobs decided to open up FaceTime, as any open standard’s success in video/telephony limits the power of the carriers.

The funny thing is, they seem to be screwing it all up without Steve’s help. There is simply no doubt that the future of voice and messaging is with companies innovating at the application layer, and my guess is there is going to be a ton of investment activity and M&A in this space as new realtime communication tools are developed over the next few years.

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Contributor Steve Cheney is an entrepreneur and formerly an engineer & programmer specializing in web and mobile technologies.

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