COMMUNICATION: Traverse City home to a world leader in VoIP telephony

TRAVERSE CITY – The region’s reliance and interest in the Internet is exploding, and businesses are sprouting right along with it.

One of these is ISPhone, started in 1997 by Kenneth E. Moody and Victor von Schlegell, ISPhone’s president and CEO. The company provides the latest in high-tech services to their network partners with Voice over Internet Protocol (VoIP). They are one of the first companies in the world to start this new type of Internet service.

Moody, along with his wife, Suzan, started one of the first Internet Service Providers (ISPs) in the region in 1995, called GTII. Von Schlegell came on board in 1996 with 30 years of consulting and line management experience, including two years as CEO and co-owner of an ISP, and two degrees from Stanford University.

Moody and von Schlegell saw potential in the new frontier of VoIP and quickly decided it was the way to go. ISPhone has already made its presence known not only all over the United States, but in Canada, Europe and Asia, as well. They have the technical ability to set up accounts with their customers worldwide.

Internet telephony was the new thing when they first started. The company was planning on selling the service to ISPs, hence “ISP(tele)phone(y)” became an easy transition to their newfound company name.

“What VoIP does is allow access into gateways, which enter into computers, allowing inexpensive long distance calling via a network like the Internet,” von Schlegell explained. “ISPhone uses a private network to obtain voice quality that is often better than the ‘public network.’ It’s literally like a ‘tin can connection’; a virtual string at 56 or 64 kilobytes per second. As soon as you hang up, it tears the ‘string’ down and gives it to someone else.”

The ISP market has not developed as first envisioned, but it seems to be awakening. In the meantime, ISPhone is focusing on reinventing itself to do “convergence,” or putting all of a customer’s communication needs on one wire (see “Convergence Emergence,” page 12).

Other services to be offered with this new technology include voice telephones, Internet data service (e-mail, web browsing, etc.) and video conferencing or video phones. Enhanced services include voicemail and one-number service, where one phone number can reach you wherever you are in the world. You simply tell a computer (with a Web browser or cell phone) what number you can be reached at when and where you want. ISPhone also offers Pre-Paid Calling Card service for their network customers.

Richard Core and Michael Klusowski are the “techies” who keep the whole process running at ISPhone. Core designed much of the system in a room they call the “NOC,” Network Operations Center. An imposing room, it is filled with computers linked to a tower of connections, an operating link with worldwide communication abilities. Core and Klusowski also act as “Network Traffic Cops,” running the equipment and software to keep track of the network and subscribers. The work can be demanding.

“ISPhone is positioning itself to take advantage of a concept called “webtone” coined by Scot McNealy, CEO of Sun Microsystems, Core said. “We want to provide an enhanced network that is always available for whatever type of communication you need at the moment (i.e., voice, video, data, multimedia…).”

Core, Vice President of Network Operations and Development, has over 25 years in the computer technology business, having designed software programs for major companies in Silicon Valley. He graduated from U of M with a master’s in Electrical Engineering and has a master’s in Computer Science.

He thrives on the challenges in this rapidly-advancing world of the Internet. “I am always learning,” he said. “And happiest when I am doing so, as well as ‘playing’ with all this new high-tech equipment.”

“The Internet and its well-developed technology base (thanks to early government sponsorship) is what allows us to do what we are doing,” said Core. An early network, which led to what’s now called the Internet, was ARPAnet, established in 1969 (for more on the history of ARPANet (see

Exactly 20 years later, Tim Berners-Lee, a scientist working at CERN, the European Center of Nuclear Research in Geneva, Switzerland, designed the basic concept of a versatile graphic interface for what had become the Internet. That was the birth of the World Wide Web, but it took about two years to make it work.

And work it has as the technology of the new century strides full-speed ahead.

ISPhone’s web site is A special thanks goes to Richard Core and Hans Joerg Rothenberger for their contribution to this article. BIZNEWS