A very cool article from eWeek

It's the End of the Phone As We Know It …
By Jim Louderback
October 30, 2003

It's the end of the phone as we know it, and I feel fine!

But I don't think the traditional wire-line phone folks will feel so good. That's because when you combine Wi-Fi with cellular, you just obviated the need for any wired phones at all.

Here's how it works. You've got a righteous cell-phone, like the new Treo 600, or a svelte camera phone. While you bop from place to place, you receive and send via the traditional GSM or CDMA wireless network. But step into your home, office, restaurant or bar, and that phone switches instantly and associates with the local 802.11 hub.

Suddenly, instead of squawking on the fragile wide-area wireless network, your dulcet tones are smoothly sliding along on a local 54Mbit or higher broadband network, swept away onto the Internet network: from cell to VOIP in an instant.

Fantasy? Hardly. A mostly overlooked announcement on the outskirts of last week's CTIA show in Vegas portends tumultuous change. Wireless technology vendor TTPCom rolled out its new GSM.11 architecture, a single piece of silicon that combines cellular-based GSM technology with 802.11 LAN. According to TTPCom, we'll see phones based on GSM.11 by 2005—with a target price of less than $100.

That means a cheap T-Mobile or Cingular phone can double as a LAN-based VOIP phone along with working on the cellular network around the world.

But you don't have to wait until 2005. All the pieces exist to make this a reality today. The new Treo 600 from Palm One has everything you need. First, it's a great cell phone on either Sprint's CDMA or the GSM networks in the US. But because it includes an SDIO slot, you can easily add a Wi-Fi network card—as soon as Palm OS 5.x drivers are available.

From there, it's a reasonably easy piece of engineering to create a VOIP phone for the Palm OS that uses the microphone and speaker of the Treo and communicates via the IP services provided by the Wi-Fi internet connection. According to my buddies at Palm One, all this is possible—but they couldn't lead me to anyone building such a piece of software today. But if you're out there and reading this, let me know. I'll test it out and tell the world.

The harder part in all of this is building in network smarts to let you roam from cell to IP network and retain your same phone number. How will the wireless network know to route your calls to an IP number when the phone associates with an access point, or to a wireless phone ID when you're roaming free. Who handles the billing? How do you get from the Wi-Fi network to a local exchange when calling a wired number—while they still exist?

Ericsson and others have been studying the problem from a hardware perspective, and you know Sprint, T-Mobile and Cingular are all licking their chops over sticking it to the Baby Bells that in most cases birthed them.

Three years ago I advised Paul Allen—shortly after he purchased a controlling interest in Charter Communications—to move beyond traditional cable-modem IP phones to become a MVNO—technically, a Mobile Virtual Network Operator. By reselling wireless phone service in the communities served by Charter's CableTV franchise (along with RCN), Allen would have positioned himself as the first to offer cell-phone and VOIP service on a single bill, with a single number, and via a single device.

He spurned my advice, but I know someone's going to get this right. My bet: We may have to wait until 2005 for universally available hybrid phones, but sometime next year we'll see the beginnings of it. VOIP—via free services like SKYPE and SIPhone have become so good, so quickly, that there's little need for a true wireline phone.

For the baby bells, the battle's almost over. So far, Internet-based technologies—where every computer in the world can communicate with every other one—have revolutionized music, movies and mail. It's about to do the same to telephones—but only after layering in wireless technologies. Remember Studebaker, Polaroid and Pets.com? All failed to anticipate market change. In 10 years, we'll add SBC, Bell South and Qwest to the list. Wired phones will seem as quaint as instant film, Tang, steam-powered cars and buggy whips. Sign me up!