ABSTRACT
There are a broad range of objectives and opportunities that can be lumped under the heading of Internet telephony, or ITel. This chapter identifies a number of criteria that can be used to separate these different ITel applications into classes, including the degree of interoperation with the existing telephone system, and the extent to which the existing Internet must be augmented to support them. Using this framework, the chapter concludes that different ITel applications have very different motivations, and have very different implications for industry structure, economics, and regulation. The immediate opportunities for ITel involve cost reductions relative to current telephone pricing. The long-term trajectory for ITel is to become a new mode of computer-mediated human communication, which will have profound consequences for the telephone industry. This long-term form of ITel will not necessarily grow directly from the products that are being deployed now, but will come from a number of intermediate developments that can be anticipated over the next several years.
