In a previous blog post I discussed two companies that you probably never heard of that make telephone calls possible — Neustar and iconectiv. These companies administer the NPAC database, which is a database that gets consulted each and every time that any one dials a telephone call to a US (non-toll-free) telephone number. A million times per day, a telephone call gets placed to a US telephone number, and a million times a day, a lookup happens to this NPAC database, without which the phone call would not be able to reach its destination. And if you are like me, you never heard of either company.
In this blog post I will discuss another group of companies that you probably also never heard of, that are responsible for a super important part of the way that telephone calls take place. This category of companies does not, so far as I know, have a name. I will call them “VOIP wholesalers”. Some of these companies are called Onvoy, Bandwidth, Paetec, Peerless, Level 3 Communications, XO Communications, and Aerialink. I had heard of Level 3 before, but I only knew them as an Internet company. The other three companies I had never heard of at all until very recently. What do VOIP wholesalers do, and why should you care?
To make sense of what VOIP wholesaling is, it will help to review some of the points I made in a previous blog article, the article about reducing the monthly cost of each of my firm’s phone lines from $40 to 85¢. One of the main points of that article was to observe that if you are using a pair of copper wires (a “landline”) then you are part of an ever-shrinking group of telephone customers. The telephone companies that used to have nearly a monopoly on providing telephone service through copper landlines are seeing their business shrink rapidly. As I discussed in that blog article, some people are ditching their landlines and using cell phones only. Other people who have cell phones and move into a new home just don’t bother to get a landline installed.
And some residential customers who do sort of want to have a landline, but who don’t feel like paying the legacy monthly cost for a copper-pair landline, have gotten into the habit of using MagicJack or Vonage or Ooma as a way of providing a dial tone for traditional analog telephones.
But as I discussed in that previous blog article, a growing trend is that businesses are dumping their traditional copper-pair landlines and are migrating to high quality VOIP services. Part of this trend is a parallel migration from old telephone systems (PBXs) to new VOIP-based PBXs. In a previous blog post I discussed factors that one might consider when picking a new PBX. A business that has migrated to a VOIP-based PBX is very well positioned to dump legacy analog telephone lines (with their high monthly cost) in favor of VOIP lines (which cost essentially nothing).
So suppose you’ve decided to try to cut your monthly bill for telephone lines from $40 or $55 per month to 85¢. If you have made such a decision, you will then go shopping around to pick a telephone company to provide your VOIP lines.
Actually, that is probably not what most firms do. Most firms, I expect, put themselves in the hands of a consultant that will deliver a “solution”. The consultant will pick the 85¢ VOIP provider and the firm will never even learn the name of the provider that the consultant selected. The “solution” will involve signing a multi-year contract and locking in a monthly charge. The consultant will pick the monthly charge to be an amount that is notably cheaper than the firm’s old monthly phone bill to the legacy landline provider (such as Centurylink or Verizon), a price that still delivers a generous profit, given that the underlying cost of the telephone lines is the 85¢ that I keep mentioning.
But anyway, maybe you will bypass a consultant and maybe you will pick your own VOIP telephone service provider. As I mentioned in the earlier blog post, we settled on Voip.ms, which somehow makes money charging us only 85¢. (Amazingly this 85¢ includes a potentially unlimited number of phone calls that can happen at the same time, which is the equivalent of a potentially unlimited number of copper pairs from the legacy telephone company.)
You might not pick Voip.ms. Maybe you will pick SIP.US, or Twilio, or Megapath, or any of several dozen other companies that make their living providing a connection between your VOIP PBX and the PSTN (public switched telephone network).
What I am astonished to have learned is that none of these companies (I call them “VOIP retailers”) actually provides the connection between your VOIP PBX and the PSTN (public switched telephone network). They merely act as retailers, and they resell wholesale VOIP service from VOIP wholesalers.
Yes somehow the 85¢ per month that my firm pays to Voip.ms for an unlimited number of incoming and outgoing telephone calls is merely the retail price. There is some smaller wholesale price! Voip.ms sort of subcontracts the task of actually providing the connection between the PSTN and our VOIP PBX. Some wholesaler somehow makes a profit on a monthly fee that is even smaller than 85¢.
The NPAC database permits you to figure out who the actual wholesaler is for any given telephone number this is served via VOIP. And, I was astonished to learn, there are services that a member of the general public can use to interrogate the NPAC database. With such a lookup service, you can work out whether a telephone number is (likely to be) a legacy copper landline on the one hand, or whether the telephone number is hosted by one of the VOIP wholesalers.
For example you could look up our firm’s main telephone number (303-252-8800) in the NPAC database, and you would see that the wholesaler hosting the number is Onvoy. Voip.ms is the retailer and resells the wholesale service from Onvoy. I had never heard of Onvoy until I started trying to learn about VOIP migration.
Sort of randomly I picked some well known big law firms. For each such firm I looked up the firm’s main telephone number. I then looked up the telephone number in the NPAC database to see who hosts that telephone number. This tells you whether the law firm is (probably) still using copper landlines or whether the law firm is using VOIP. Here are some of the results.
|Banner & Witcoff
|Paetec Communications, Inc.
|Crowell & Moring
|Foley & Lardner
|Level 3 Communications
|Neifeld IP Law
|Level 3 Communications
|Paetec Communications, Inc.
|Polson IP Law
|Saidman DesignLaw Group
|Paetec Communications, Inc.
Not one of these well-known firms uses a legacy landline telephone company. Every one of them uses VOIP. And most of these VOIP providers are companies I had never heard of until very recently when I was trying to learn about VOIP services. Probably all of the inbound and outbound telephone calls to and from all of these well-known firms are VOIP calls. Probably all of these well-known firms used to use legacy copper-pair landlines as recently as just a few years ago. They all got smart and migrated to VOIP.
I’d guess that at most of the firms listed above, they have no idea who their VOIP provider is. Their direct relationship, I’d guess, is with a consultant that in turn subcontracts the VOIP service to the VOIP service provider listed. I do not mean this as a criticism of the firm. I only mean that in many cases probably the firm has not heard of the company that actually provides their telephone service.
This trend, migrating from analog copper pairs to VOIP, will only continue. Eventually very few businesses will use traditional copper landlines. Nearly all businesses will eventually migrate to VOIP as the firms listed above have done. And (this is the main point of this blog post) in most cases the provider of the VOIP service will be a company that most people have never heard of.
What about the USPTO? I looked up the USPTO’s main telephone number in the NPAC. The USPTO still uses Verizon.