VoIP Special Report: Get a Grip on VoIP

In an industry filled with acronyms and abbreviations like “Cat-5,” “CCTV” and “NBFAA,” it hasn’t taken long for the letters “VoIP” to become embedded in the minds of dealers and integrators.

Security Sales & Integration was the first electronic security trade publication to introduce the acronym “VoIP” to the alarm industry in an “Industry Pulse” item for the April 2004 issue. At the time, the problem was that most alarm professionals had no clue what VoIP was, let alone what it stood for.

Two years later, most dealers now know it stands for “voice over Internet protocol” and involves the transmitting of phone calls over the Internet. They’re also aware of the implications VoIP may have for the transmission of alarm signals from control panel to central station — especially when it comes to residential customers.

If the efforts of industry associations and others to build awareness of VoIP wasn’t enough, the weekly calls from customers complaining about unanswered alarms is forcing installers to become well-versed on how end users’ changing telecommunications options can interfere with their alarm systems.

With that, the efforts of alarm companies and the industry in general have turned from building awareness of the VoIP issue to building a plan to deal with it.

VoIP, which uses the Internet to transmit phone calls, is growing as an alternative to plain old telephone service (POTS). Like those switching strictly to cell phone use, it’s enticing customers to reduce the use of their landline or cut them off entirely.

Ron Polli can speak to both sides of the VoIP issue. A longtime hand in the alarm industry, Polli is now providing VoIP services as president of Vontronix Inc. Polli says not only can dealers benefit from helping their customers deal with how VoIP affects their alarm systems but should also consider providing the phone service themselves as an added source of revenue.

“Alarm dealers have one of three choices: Continue what they’re doing today, which is being reactive to the field, close your eyes and hope it goes away, or embrace it and get their customers to buy it from them before they buy it from other providers,” says Polli. While the fuse is still burning on what is expected to be a VoIP explosion, dealers and integrators are already seeing signs of the impending mass exodus to VoIP in the form of service inquiries from their customers. Even after dial tone is maintained between panel and station in a VoIP connection, concern is growing about the integrity of the computer networks used as conduits.

More and more, manufacturers are providing products that help installers bridge the VoIP gap, and there may be opportunities for dealers and integrators to get in on providing VoIP service themselves.

Alarm Industry Now Well Aware of VoIP Impact
Within alarm companies, the people most aware of the effect VoIP is having on the industry are those who answer the phones.

The calls are usually the same: “My alarm went off and there was no response.” Not too long ago, such a call would have befuddled a dealer. Now, it’s clear that the alarm user likely switched off their landline for another phone service like VoIP.

“We get two to three calls a week now,” says Dan Budinoff, president of Stamford, Conn., alarm firm Security Specialists. “The service guys used to scratch their heads. Now, they ask, ‘Did you switch your phone service?’”

The sudden appearance of mass-market VoIP residential services and the Federal Communication Commission’s (FCC) moves to make it easier for people to switch their number from a land to cellular line in 2004 brought phone switching to the forefront of the many telecommunication issues on the agenda of alarm professionals.

Much of the awareness has come about through the work of such associations as the National Burglar and Fire Alarm Association (NBFAA) and the Central Station Alarm Association (CSAA). Both have spent time and resources informing their members and the industry in general that when customers cut off their landlines, they may be cutting out their alarm service.

Budinoff, also a member of SSI’s Editorial Advisory Board, argues a dealer or integrator not aware of the VoIP issue is probably not part of an association.

“I bet there’s an awful lot of people out there not connected to associations who have no clue,” he says. “That shows the value of associations.”

Transmitting Phone Calls Over the Internet Taking Off
In a nutshell, VoIP replaces the traditional, public switched telephone network (PSTN) of wires and relay switches with digitized packets of voice signals sent through a home or businesses’ Internet connection (see diagram on page 72 of the February issue). Before trying to work with a customer considering or already in the process of adding VoIP service, it’s best to understand the biggest reason why they’re making the switch: their wallet.

For between $20 and $35 a month, a VoIP customer can get unlimited calls to anywhere in the United States and Canada. For $10 more a month on some plans, they can add 22 European countries to their unlimited calling area. On top of that, the service comes with free voice mail, call waiting, wake-up service, call conferencing and “do not disturb” modes, among other services.

Compare that to the more than $100 per month most residences pay for their landline service without the extra perks, and the choice is as clear as picking between fruit that is ripe and fruit growing fuzzy with mold.

“My mother-in-law lives an hour from here. It used to cost me a small fortune to call her. Now, there’s definitely a savings, and the service is good,” says Budinoff, a VoIP customer himself. “It’s great for the consumer, but it’s not the best thing for an alarm system.”

Telling a customer they should avoid VoIP service entirely may fall on deaf ears when they can reduce their phone bill by more than 75 percent. Instead, an installer should try to work with its customer on making sure the connection between the panel and central station remains intact. This can be accomplished by either testing the system after VoIP is installed or convincing the customer to maintain a low-cost, bare-bones landline just for the alarm system.

For at least the near future, the forecasts of analysts don’t seem to show VoIP overtaking traditional landlines. But then, a typewriter salesperson in 1985 or a VCR manufacturer in 1995 was probably confident their devices would withstand the test of technology.

At the time SSI wrote its initial VoIP feature — “Industry Sounds Alarm on VoIP” — for the September 2004 issue, there were approximately 500,000 VoIP users in North America. Now, there are estimated to be 1.5 million. Research firm Frost & Sullivan says that number will grow to 18 million by 2010.

As staggering as that number may be, it’s a small percentage compared to the estimated 350 million landlines currently in use in the U.S. Still, a recent report by information technology research firm Gartner estimates that by the end of the decade, 30 percent of residential customers will not have conventional landlines, relying on VoIP and cellular/wireless instead.

Compatibility Not As Big a Concern as the Network
When VoIP first appeared on the security industry’s radar, most of the concerns surrounded its compatibility with alarm systems and whether it would hinder a panel’s ability to att
ain line-seizure and dial tone.

Since then, the alarm industry, cable companies and telecoms have performed extensive tests on how alarm panels perform off VoIP lines. With rare exceptions, communication continued to be maintained between the alarm panel and central station.

The Alarm Industry Communications Committee (AICC) has been working with CableLabs – a research consortium formed by cable television companies – to test various alarm panels and receivers with VoIP. During its “Home Alarm and VoIP Interoperability Test” last September, the two organizations verified most digital alarm communications formats were transmittable over PacketCable-based VoIP architectures.

“The technology is defined and stable,” says Kevin Johns, senior architect of communication protocols for CableLabs, who adds it’s still important for alarm providers to verify system compatibility with VoIP on a case-by-case basis. “Once everything is wired up, you need to assure it will still work. That is where the post-install test comes into play.”

Despite this, alarm dealers should be aware that VoIP systems weren’t designed to transmit information, they were designed to transmit people’s voices. Alarm signals transmitted over VoIP are much more prone to distortion than those over landline.

“Voice over IP is really for voice. That’s why it’s called voice over IP,” says Polli. “It will send most alarm formats, but it doesn’t work well for squeally type modem hiss stuff.”

While the concerns over compatibility are subsiding, there’s a new, growing concern that alarm firms have no control over: The stability of the Internet networks that support VoIP systems.

Say what one will about the good ol’ POTS line, but it takes a lot for one to go down. When someone cries that the phone line is down, it’s usually because of some kind of natural or manmade disaster. On the other hand, computer networks go down all the time. Go into the typical office, and there will be several exclamations a week coming out of the cubicles about the E-mail being down or getting kicked out of a server.

With VoIP, when the network is down, the phone is out. This makes VoIP phone lines especially susceptible to power outages and other incidents where a landline would still be going strong.

“When you need the reliability, the network is down a lot. That old pair of copper wires can still do the job,” Budinoff says. “My VoIP is down three to four hours a month.”

Reliability becomes an even bigger question for those who get their Internet service through their cable television company. Not only are they at the whim of their network, but also their cable service. If the cable is out, so is the phone.

“Let’s just admit to it. The Internet is still the Internet, and it’s a little flaky,” says Vontronix’s Polli. “I would recommend, especially if you take security seriously, to use VoIP as secondary for alarm service.”

VoIP Customers Shouldn’t Cut the Landline Completely

There is a growing consensus among alarm professionals and consumer advocates alike that the best option for alarm customers adding VoIP service is to not cut off the landline link in the process.

“I’m recommending to our customers that if they want to go to VoIP, keep the landline for the alarm system,” says Security Specialists’ Budinoff. In fact, keeping the landline was just the recommendation made by Consumer Reports magazine, which did its first in-depth look at VoIP in its January 2006 issue. The consumer advocate magazine’s editors praised VoIP for cutting phone bills and adding useful new services, but also urged readers to keep a landline phone with a basic plan.

At first, this sounds like defeating the low-cost purpose of switching to VoIP. However, adding a bare-bones basic phone plan for around $10 a month alongside a typical $20-amonth VoIP service can still run substantial savings compared to the typical landline service.

Best of all, the alarm customer can enjoy the benefits of VoIP service while still keeping a stable connection between their alarm panel and central station.

Manufacturers Join the Internet Protocol Parade

It doesn’t help alarm professionals if they take notice of VoIP, but those that make security products do not. To their benefit, manufacturers have started taking notice of the rise of VoIP among alarm customers.

Security product makers are offering items that can help installers maintain the connection between a VoIP customer’s alarm panel and the central station.

Honeywell Security, Bosch Security and DSC are among those manufacturers, while a new company called UHS Systems recently launched a plug-in product designed to seamlessly connect an alarm panel through VoIP to a central station.

In fact, Bosch was ahead of the game years ago when it introduced the C900V2 dialer capture module, which upgrades any alarm panel to communicate through a computer network to a central station equipped with a Bosch receiver, instead of a landline.

“The technology used in the C900V2 has been around for several years. It’s hitting its stride now because of the explosion of VoIP accounts,” says Bosch Security Product Marketing Manager Tom Mechler. “The advantage is the installer doesn’t have to do any special programming and because it uses dialer capture, it transmits full data.”

End User Installation Needs Could Be Opportunity

Polli’s Vontronix is just the latest of several companies joining the growing VoIP industry, but he stands out among alarm dealers because he used to walk among them. Because of that, he sees VoIP as an opportunity not only for telecommunications and IT companies, but also for alarm dealers and integrators.

Polli’s background in the alarm business goes back to when he was the original sales manager for Sears and Roebuck Alarm Systems. He then founded an alarm company of his own that he later sold to SecurityLink. That led to his introduction to Internet telephony after he joined computer modem maker Zoom Technologies.

Using the knowledge gathered at Zoom, Polli has started his own VoIP venture in Brick, N.J. Unlike other VoIP providers, Polli’s service is aimed at security dealers and integrators. In mid-January, Vontronix started offering its services through distributor ADI. Polli’s concept is to help residential installers add VoIP as part of their overall home installation. “This is designed for alarm dealers as a potential source of additional revenue,” says Polli.

According to Polli, a dealer can buy a $95 hardware package from Vontronix through ADI, then make the profit after selling it for $120 installed. Best of all, since VoIP is not subject to the same taxes other phone services are, the installer doesn’t need to worry about the IRS when they install VoIP.

The Vontronix president compares the installation of VoIP services to the installation of alarm systems. While a homeowner can certainly buy a “do-it-yourself” alarm kit from a hardware or electronics store, most opt to get an installer to install the system with less likelihood of error. “There may be those willing to tinker with VoIP for three hours, but the average homeowner would much prefer to have someone professional install it,” Polli says.

Many of the problems that arise when an alarm user installs VoIP arise from self-installation. Many of the VoIP retail packages – including that offered by the popular Vonage – are usually installed by the end user themselves. An alarm customer could very well mess with wiring of which they have little to no knowledge.

“One of the most important aspects of alarm system compatibility is that the panels are wired
correctly,” says CableLabs’ Johns. “It makes professional installation imperative.”

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