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Hosted IP: CENTREX in IP Clothing?: Page 2 of 5

FEATURES AND FUNCTIONS

"Standard" features and functions can differ significantly. Traditional Centrex offerings normally include a basic set of features:

* Call Transfer
* Call Hold
* Call Forward
* Three-Way Calling
* Call Transfer
* Call Divert (on no reply /on busy)
* Call Waiting
* Call Pick Up
* Last Number Redial
* Hunt Groups

Class 5 central office switches that are the basis of Centrex offer more and advanced features, which are available to users on a monthly recurring charge (MRC) per feature. Voice messaging is an extra MRC per voice mail box.

Hosted IP providers, such as Vantage Communications or Star2Star, routinely offer a more robust complement of features, functions, and applications in their standard package. The "standard" package usually includes the features of traditional Centrex or PBX phone system: Hold, transfer, conference, call forwarding, call waiting and more advanced PBX functionality. Network services are often included:

* Clear channel data T1 for voice and data
* Unlimited local and domestic long distance calling

* Unified messaging to the desktop

* Direct Inward Dial (DID) numbers to every station
* Local Number Portability

Advanced professional features, such as automated attendant and receptionist and basic call center capabilities, are included. Often, previously unavailable features are now part of the usual offering:

* Soft phone, IP fax, and secure Instant Messaging (IM)

* Onscreen programming and missed calls

* Unified messaging, i.e., voicemail integrated with web and e-mail

* Direct dial from Microsoft Outlook (Lotus Notes and Groupwise integration are less prominent)

* Pop-up screen on the PC to show incoming calls

* One converged network for all communication--voice, data, video and Internet

* One network for all features - voicemail, call forwarding and others

* One website to control and manage voice applications

* Connection to multiple locations via reduced-digit interoffice dialing

* Interoffice transfer, common voicemail, and common receptionist

* Mobility and telecommuting

* Disaster recovery and business continuance

The Hosted IP platform and development should support capabilities for future enhanced applications to improve business performance with applications programming interfaces (APIs) that facilitate integration with other systems and databases within the organization.

One area in which a potential issue exists among Hosted IP offerings is that of 911 and E911. Based on preprogramming, some solutions will route a user’s instrument to the user's "home/local" public safety answering point (PSAP), even if the device is physically in another town or state. In this scenario, if the caller is in a California hotel and his "softphone" is logically active in NJ, the user must make the hosted system "aware" of the change of location. Upon doing so, any 911 calls are routed to the California PSAP. If not, the emergency call goes to the NJ PSAP, and bad things might happen to the caller during a crisis situation. Service contracts usually put this responsibility for notification and potential liability on the user.

Even with the potential 911 issue, the differences between Centrex and Hosted IP features (more akin to an on-premises PBX) appear significant to the user. Assuming "more is better," Hosted IP has the clear advantage.

ARCHITECTURAL CONFIGURATIONS

Technologically, Centrex already meets architectural requirements well, since the service provider, usually the local exchange carrier (LEC), is assuming the bulk of the responsibility. The LEC takes care of all equipment support, operation, upgrades, and administration and management (although self-administration options are usually available). The LEC also provides connectivity from the central office (CO) to the customer premises, usually via copper or fiber. The customer must provide an on-premises infrastructure of copper or fiber/copper from the demarcation point via main and intermediate distribution frames to the user’s telephone instrument. Notably, this physical infrastructure is passive and physically discrete from the organization’s data network.

Hosted IP service providers address the requirements in much the same manner in terms of equipment support, operation, upgrades, and administration and management (usually via a web portal). Additionally, the Hosted IP service provider will recommend a link configuration, such as a bundled T1, SIP trunking, or other high capacity wideband facility, with its offering. This configuration allows the service provider to better control the quality and manage available bandwidth to accommodate traffic volumes between the customer and the service provider. However, the converged network that supports voice, data, and applications must meet a new level of performance with associated customer-premises equipment that is discussed below.