The VoIP Challenge for Alarm Systems Dealers

As an alarm dealer and central station monitoring provider, you've got lots to think about already. As if customer retention, finding new prospects, maintaining your RMRs, assessing the new product lines and staying up-to-date on what your competitors are doing to steal your edge isn't enough, there's another issue you'll soon be facing if you haven't already.

Sound the trumpets and raise the drawbridge. The new consumer technology that's here in some metropolitan locations and on the horizon in smaller towns is a thing called VoIP, which stands for voice over Internet protocol. Don't mind the alphabet soup; it's a technical way of saying that your customers can disconnect their phone lines and talk directly using the Internet.

Before you wave this off as just another technology to live with, you should know that it means a lot to your job as an alarm systems dealer. The thing that industry insiders, like Honeywell Security and Custom Electronics's Vice President of Marketing Gordon Hope, will tell you is that VoIP will change how you do business.

In the world of VoIP, you have some solutions providers, such as Vonage, that simply sell customers the hardware that they need to connect to their existing computer and high-speed connection to create a phone system that uses Internet bandwidth. This is called a non-facilities based solution. Then you have the big players - companies like AT&T, Cablevision, Time Warner Calbe and Verizon - that use a facilities-based solution, meaning that the technology isn't in the box you have, but is in their telecom facilities and that they provide you with the high-speed connection too. These are the companies that are doing heavy marketing of VoIP, and it's selling.

Consider the following: A recent offer from Verizon's VoIP division (the service is called Voicewing), promotes VoIP calling for just $29.95 a month when you add that to existing Verizon DSL service, or $34.95 a month by itself. It's a deal that many customers are biting on. With included features like unlimited local and long distance calling, voicemail with email notification, caller ID, three-way calling, a phone/address book that integrates into your PC software, $.05/a minute or less to places like Australia, Aruba, Italy, Canada and Israel, it's not hard to understand why the American public is starting to make the switch from POTS (plain old telephone service) to VoIP.

So what's that have to do with the security industry? Lots, unfortunately.

Here's the kicker to all the good deals, straight from the Verizon website:

"Verizon VoiceWing Service does not support traditional 911 or E911 access to emergency services. The limited emergency response service ("Limited Emergency Response Service") differs in a number of important ways from traditional emergency response services. You must maintain an alternate means of requesting emergency services. An accurate Service Address is required to route your calls to the closest emergency call center in the event that you dial 9-1-1. Verizon VoiceWing Service will not work if power is out. VoiceWing will not support home security systems and cannot be used with satellite television services. Network congestion or use of data services at the same time as VoiceWing might affect sound quality."

The small text, found here by doing a detailed search of the fine print and FAQs, states unequivocably if you plan to use an alarm system with a VoIP system, turn around and walk away - it won't work. And you'll find similar language from the other major providers.

"Customers are oblivious to this fact," says Alan Glasser, president of the Metropolitan Burglar and Fire Alarm Association in New York.

"I called up the PR office of CableVision," explains Glasser, "and was speaking to a woman there and she had an alarm system, which she had never tested. She had VoIP and had no idea that her own company didn't support alarm systems."

So that's it - the alarm system can't connect, can't send an alert signal, just won't work? Unfortunately it's not that easy.

"The signals might get through," says Glasser, who adds that you can't count on the signal going through. "We don't know for sure that it's 100 percent compatible. The techs say it's not 100 percent compatible, and no one wants and alarm system that only works 99 percent of the time."

"CYA": What Others Are Doing

For alarm dealers and central station monitoring providers, it brings up real issues of liability. What if John Q. Homeowner's burglar alarm sounds while he's on vacation and the signal doesn't make it over the Internet to the monitoring company to alert the police? Twenty minutes later and his prized collection of vintage coins is gone, and when the homeowner returns, the installing company, the monitoring company, the homeowner and the VoIP provider are all standing around pointing fingers. So, who's to blame?

That answer hasn't been determined fully just yet, but as long-term security industry legal consultant Ken Kirschenbaum, says, "VoIP is too unreliable to interact with alarm systems and its communicators."

"We're going to have to have disclaimers and include specific warnings in our contracts when people that have VoIP are being solicited," continues Kirschenbaum, "I think there are going to be experts that would be willing to testify that the VoIP is too unreliable and should not have been used. When there is a failure, the alarm company should have not agreed to using VoIP."

Andy Lowitt, the vice president of dealer relations at Metrodial central station monitoring in Hicksville, N.Y., says there's a need to be proactive that has to come from dealers and the central station community,.

"From a liability standpoint, it's a good idea to notify your clients," says Lowitt. "Perform a regular test and find out if your signal works. There's a chance the signal will go through and there's a chance it won't go through. We've sent all of our dealers a standard letter that explains all of the issues. We point out the possibility that the signal will not go through. We've pointed out the problems that will be there if they have a loss of power."

Glasser concurs. He's made sure that the company's contracts and salespersons address the VoIP issue before it comes to head in an ugly lawsuit.

"The way the contract protects us is that we had an existing alarm service and they change their communications (i.e., from phone to VoIP), then we are protected," explains Glasser. "But if you're in sales and you sign up a new customer without asking the question of how their communications connection is set up, then you're screwed. You'd be liable because you should have asked that question."

But don't stop there, says Glasser.

"You should tell your customers that if they change their service, then they should let the alarm company test the system. But if you're selling alarm systems, you better ask the right questions...and if you're selling it to a customer with VoIP, you better have a back-up system."

And while the back-up seems like a no-brainer, by estimates of many people in the industry, back-up systems are used by less than 10 percent of alarm systems.

Organize, Mandate and Legislate

While there's certainly a thought in some parts of the industry that VoIP is a problem that will be solved with technology, just like the advent of DSL filters and communicator panels that worked with the Caller ID functions, Honeywell's Gordon Hope doesn't think it's that easy.

The problem as he sees it is this: "The FCC is not mandating cable providers to the same standards as telephone company providers. It is offered as an extension of normal cable services."

Fortunately, people like Hope are working within the security industry to create coalitions, solve problems and create workable standards. Hope and others involved with the Alarm Industry Communications Committee (AICC) have begun to create the initial contacts that are needed to solve this problem, by having security industry manufacturers communicate directly with cable industry organizations.

"The way to fix this problem is through standards organizations," says Hope. "At the ISC show we tried to pull some of the manufacturers together. We're offering the cable providers free equipment to let them test and to make sure their stuff will work with our equipment."

But the plan is more extensive. By involvement on the AICC, security industry leaders are planning meetings with groups like the CSAA, SIA and the NBFAA and cable organizations like the National Cable and Telecommunications Association (NCTA) and CableLabs, a group that is working to set standards and define the technology that's used in the cable modems that power the Internet and communications to VoIP-enabled homes and businesses.

Hope says that initial reaction of meetings between the cable industry and the security industry has been positive, but that a solution will take more effort.

For now, however, the issues of liability give execs in the security industry a bit of frustration and lot of hesitancy. "It's going to take high-level industry-to-industry communications to solve this," explains Hope.

Until then, the temporary solution is to watch your back and be wary of what commitments you make to consumers using VoIP. Hope doesn't like the current picture.

"At Honeywell, we are recommending that dealers don't connect with VoIP," he says. "It's a moving target, and we know some of it works and some of it doesn't."

LEARN MORE

Visit the websites of the following organizations involved in the issue of VoIP and alarm system compatibility:

AICC: http://www.csaaul.org/AICCCommittee.htm
SIA: http://www.siaonline.org/index_sia.asp
CableLabs: http://www.cablelabs.com/
NCTA: http://www.ncta.com/
NBFAA: http://www.alarm.org/
MBFAA: http://www.mbfaa.com/

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