VOIP makes it possible to route voice phone calls over the Internet instead of traditional telephone networks. Because it uses the public Internet, VOIP is substantially cheaper than the old fashioned POTS (plain old telephone service) lines that have been in place for more than 100 years.
Ironically, the conference begins just three days after Vonage - the nation's largest VOIP provider with 500,000 subscribers, suffered its first major outage. On Friday afternoon, approximately half of Vonage's subscribers were without phone service for about 45 minutes due to a bug in a software upgrade on the servers that coordinate the company's network. The problem was quickly fixed and service was restored.
Unlike the old AT&T and its offspring "baby bells" like SBC and Verizon, players in the VOIP field don't have to string wires or invest in expensive networks to transmit calls around the world or around the block. In fact, they don't need even need wires to offer local phone service to homes or offices. That's because they piggyback on existing Internet connections, including DSL and cable modem lines and high-speed business networks.
If you already have a broadband connection at home, all you need to get a VOIP phone is an adapter that plugs directly into a standard Internet router or, in some cases, a combination adapter/router that plugs directly into a cable or DSL line.
Linksys, for example, offers a $78 Broadband Router with 2 Phone Ports that provides everything you need (except a subscription to a VOIP service) to connect your phone into the Internet. With this equipment in place, you can make and receive calls through regular telephones. You don't need to use a computer - your computer doesn't even have to be turned on. VOIP service providers also offer their own equipment, in some case for free to subscribers.
Vonage, which I've been using for more than a year, has - with the exception of last Friday - been rock solid. The only other time I've lost service is when my Internet service was interrupted. If your DSL or cable modem service goes down, your Internet phone dies with it. Still, in most cases you can still get the call. Also, unless you have a battery backup system on the router and other Internet equipment, the system will also fail if your power goes out. That's why it's a good idea to have an alternate phone line such as an old fashioned SBC POTS line or a cell phone. Actually, I recommend that everyone have at least one POTS line on a hardwired phone as an emergency backup.
Vonage has a backup system that allows you to receive calls at an alternate number if it can't route the call through the Internet
Vonage also offers a service to simultaneously ring another phone line even if your Internet phone is working. All calls to my home office also ring on my cell phone so I only have give out one number. It's also my own version of number portability. I recently changed cell phone numbers but didn't have to notify anyone. Instead I just logged on to the Vonage website and changed the forwarding number.
Call quality is usually as good or even better than a standard phone line. In fact, I sometimes use my Vonage line for radio broadcasts because of the excellent call quality. However, if the Internet connection slows down due to congestion on your own network (such as trying to make a call while downloading a large file) or other problems, you can experience sound degradation such as wobbling which gets better as soon as the network traffic lets up.
Vonage charges $24.99 a month for its premium service that offers unlimited calls to anywhere in the U.S. and Canada. International calls are pretty cheap - but vary by country - 3 cents a minute to landlines in the UK, 4 cents to Germany and 5 cents to Japan. Most cell phone services outside North America charge the caller - not the subscriber - for airtime so calls to cell phones will cost more.
There are also extra features such as three way calling, call waiting, caller ID and voicemail. Traditional phone companies usually charge extra for these types of services. For $14.99 you can get the basic plan that includes 500 minutes. Each extra minute costs 3.9 cents.
Competitor Lingo offers an even less expensive plan, especially for people who call Europe. For $19.99 a month, you get unlimited calls to the U.S., Canada and 17 countries in Western Europe.
Rather than trying to hold on to its old franchise, phone industry pioneer AT&T has jumped onto the VOIP bandwagon in a big way. The company is no longer marketing its traditional residential long distance service and recently sold its cell phone division to Cingular.
AT&T is instead concentrating on hawking its VOIP CallVantage Service, which costs $29.99 for unlimited U.S. and Canada calls with a 50% discount on its rates for international calls. One interesting AT&T feature, called "Locate Me," allows you to program up to five phone numbers so that callers can track you down at home, at work, on your cell phone or at grandma's house. The service can be programmed to either ring all phones at once (the first one you pick up gets the call) or call one number after another, in sequence.
Another service, called Skype, allows you to place calls from your computer. Skype offers software for Windows, Mac, Linux and PocketPC that allows you to use PCs and portable PCs to place calls to anywhere in the world.
Skype is free if you're calling another PC but it also allows you to call regular phones for a small fee. You have to pre-pay for the service in increments of 10 euros (about $13.25) increments. Calls are only 1.7 cents a minute to landlines in the U.S. and Western Europe. Japan is 1.9 cents.
A syndicated technology columnist for nearly two decades, Larry Magid serves as on air Technology Analyst for CBS Radio News. His technology reports can be heard several times a week on the CBS Radio Network. Magid is the author of several books including "The Little PC Book."
By Larry Magid