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Thursday, December 11, 2008

Private Telephone Systems Reduce POTS Line Costs


Computer data networks and circuit-switched voice networks are completely
separate, with individual staffing, billing, maintenance, and accounting systems.
Although the maintenance costs of computer networks are affordable
for most companies, the recurring charges for traditional forms of telephony
are huge for small, medium, and large multilocation companies.

VoIP is designed to converge (integrate) a company’s voice needs onto the company’s
existing computer network. If a company does this, they can eliminate
most (if not all) recurring circuit-switched telephony charges.

In the past, the POTS world had only two types of services: local and long distance.
Local service covered the entire metropolitan area, with no distinctions
for the various levels of toll service that we have today. In the early
days of the telephone, long-distance cost customers dearly. A call from New
York to the west coast might have cost $3 to $4 per minute. Today, that same
call might cost a consumer $.02 to $.05 per minute and a corporate caller $.01
to $.03 per minute. The corporate customer is most likely on some sort of
dedicated private network consisting of a phone system connected to the

It might appear that the cost of telephony today is dirt cheap in historical
terms. This would be a mistaken conclusion. In addition to the carriers getting
more organized and the government increasing its regulation of the
telecommunications industry, many changes have evolved. These changes
have increased your bottom-line telephone bill and increased the number of
line items on that bill.

Now, instead of just two types of phone service offered on the PSTN (local
and long distance), we have five: local, intralata, intrastate, interstate, and
international. These five services
are based on the origin and destination of a call, using the LATA and
NPA-NXX to determine those locations. In addition, the same system is used
by the government to place various surcharges and fees on each telephone
access line.

No one would argue that the quality of carrier-switched telephony is excellent.
However, the system that has evolved for charging telephony customers
leaves much unsaid and a lot to be desired. Except for local calling, VoIP can
reduce or eliminate the charges of the other four categories.

To lessen the burden of newer and diverse telephone costs, many companies
have acquired their own POTS-based telephone systems. Company-sponsored
telephone systems can reduce the monthly bill that consumers and companies
pay for telephony services. Four different telephony system models have
evolved in the past three decades.

The first model, POTS, has already been described; it is the use of telephony
access lines and carrier services over the PSTN through a carrier. The other
models are the Centrex, KTS, and PBX models. Each of these are discussed in
this sections.

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