Terminology for VoIP is imprecise and there are no well established definitions. Much of the confusion arises from the absence of clear service descriptions and the fact that the word “Internet” is both the name of a network of networks and the name of a protocol. This lack of precision creates a serious problem. We therefore attempt to use the following terms and definitions consistently in this report:
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Voice over IP (VoIP): Any communication that includes conversational voice provided on a network that uses the Internet Protocol (ie either Internet or a managed IP network)
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IP telephony: Same meaning as VoIP
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Public telephony: A public conversational voice service that uses the established telephone numbering system defined in ITU-T Recommendation E.164. This service may be provided on traditional circuit switched networks, ATM based networks, the public Internet, managed IP networks or a combination of such networks.
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Internet named telephony: A public or semi-public conversational voice service that uses Internet names and may include “presence” functions4. In practice it may be limited in the short term to the users of the same service provider. This service may be provided on the public Internet, managed IP networks or a combination of such networks. This is not yet a commonly used term but we have coined it because it is needed in this analysis.
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Internet telephony: Although it normally means telephony over the public Internet, we avoid this term because it creates too much confusion between the public Internet, the Internet protocol and Internet naming.
Figure 10 shows the relationship between these terms.
Figure 10: Terminology 
Whilst we explain that there is a significant difference between the public Internet and managed IP networks, either can be used to provide public telephony or Internet named telephony and therefore the distinction between these types of network should not be part of any distinction between services.
We are also of the view that voice quality should not be part of any distinction between services because the voice quality achievable with these new technologies is changing and so is not a stable reference point for definitions. There is a widespread misunderstanding that the Internet cannot provide adequate quality for public telephony, yet various incumbent operators are using Internet based wholesale services for some of their international traffic.
1.2 Acronyms
3GPP 3rd Generation Partnership Project
AAL ATM Adaptation Layer
ADSL Asymmetric Digital Subscriber Line
ALG Application Layer Gateway
ATM Asynchronous Transfer Mode
BICC Bearer Independent Call Control
CC Country Code
CLI Calling line indication
DNS Domain Name System
DSL Digital Subscriber Line
ENUM A working group of IETF developing a method for resolving E.164 numbers into names for Internet resources
ETSI European Telecommunications Standardisation Institute
FRIACO Flat Rate Internet Access Call Origination
GPRS General Packet Radio Service
GSM Global System for Mobiles
IAB Internet Architecture Board
IANA Internet Assigned Numbers Authority
ICANN Internet Corporation of Assigned Names and Numbers
IETF Internet Engineering Task Force
IP Internet Protocol (IPv4: version 4, IPv6: version 6)
ISOC Internet Society
ISP Internet Service Provider
ITSP Internet Telephony Service Provider
ITU-T International Telecommunication Union – Telecommunication Sector
LAN Local Area Network
NAT Network Address Translator
RIPE Réseaux IP Européens
SIP Session Initiation Protocol
SME Small and Medium sized Enterprise
TIPHON Telecommunications and Internet Protocol Harmonization Over Network
TLD Top Level Domain
TSAP Transport Layer Service Access Point
UAC User Agent Client
UAS User Agent Server
UMTS Universal Mobile Telecommunications System
VoIP Voice over IP
VPN Virtual Private Network
2 IP Technology and networks 2.1 The Internet protocol
The Internet Protocol, and the technology that supports it, has become established as the central technology for communication networks. Its significance is that it is a multi-service technology since it provides a common format for communication that can support all services and can be supported on all the various different electrical, optical and radio transmission systems as shown in figure 11.
Figure 11: The central role of IP 
Reality, however, is not quite as simple, since the IP protocol is not that well suited to time critical data streams such telephony media and there are various methods for improving network performance such as using ATM routers instead of IP for media streams.
The Internet and the various IP-related protocols were developed originally in the 1970s from the Arpanet programme funded by the US Department of Defense. The objective was to develop a highly resilient data network. The expertise and culture came from the academic community, and the hardware was developed by the computer industry rather than the traditional telecommunications industry.
The significance of the Internet grew dramatically in the second half of the 1990s, when the technology developed enough to provide email, information services and latterly voice with adequate quality, and when the market penetration of personal computers needed for accessing the Internet became high.
2.2 The commercial drivers behind IP
The two main driving forces behind the growth of IP technology are:
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The low capital cost compared to other communications technologies. The performance/price ratio of IP based switches is doubling every 18 months whereas that of circuit switches is doubling every 80 months. The lower cost of IP compared to traditional communications technologies is caused by the simplicity of the designs, the intensity of competition in the retail orientated computer market and the large economies of scale.
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Its potential as a multi-service technology, which leads to cost savings both in the provision and operation of networks.
The result is that almost all telecommunications are now migrating, or planning to migrate, to IP technology. Even where the IP protocol is not that well suited to particular services, such as conversational voice with its sensitivity to transmission delay, the advantages outweigh the disadvantages.
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