Since the introduction of Voice over IP (VoIP) in the last decade, most of the debate comparing VoIP to the Public Switched Telephone Network (PSTN) or softswitch to the Class 5 switch focuses on a DS0-to-DS0 replacement of the incumbent technology by the new technology. It has also consisted of a feature-by-feature comparison followed by a component-by-component comparison. This is an inaccurate means of comparing the two technologies. Much of the terminology focuses on softswitches as Class 4 or 5 replacements. A better perspective is to view the new technology as superceding as opposed to replacing Class 4 or Class 5 switches. This chapter will focus on two concepts currently in vogue regarding new technologies superceding incumbent technologies: deconstruction and disruption.

In their 2000 book entitled Blown to Bits ^[1], Phillip Evans and Thomas Wurster explore how certain industries have been "deconstructed" by the Internet. That is, the emergence of information or services available via the Internet has caused firms to lose sales and market share if not their entire business due to the emergence of new technologies. Examples of those industries include travel agencies, retail banks, and automobile retailers. The following pages will investigate the potential deconstruction of the North American telecom industry by Internet-related telephony applications.

Clayton M. Christensen in Innovator's Dilemma (referred to earlier) describes how some well-managed firms can find themselves disrupted by new technology that is cheaper, simpler, smaller, and more convenient to use, known as disruptive technology. Has the...