Dialing Into Voice Over IP

Voice Over IP

It may not look like it but Heather Dushowny is making a revolutionary phone call talking over the Internet using a technology called Voice over IP.

"I plug this cord from the computer into the box," says Dushowny.

As CBS News Correspondent Gretchen Carlson reports, it's as simple as plugging your telephone cord into your high-speed Internet service. Here's the revolutionary part: that cuts your bill in half.

"It's like $40 a month versus $16," she says. "It seems like an obvious choice."

Does it sound too good to be true? Actually not, says Jeffrey Citron, CEO of Vonage, which pioneered the technology.

"There are about 100 million phone lines that are installed in homes or small businesses around the United States, and our goal is to convert them all into Voice over IP," says Citron.

He says he was determined to shake up the industry.

Vonage's explosive growth, from 7,000 customers to more than 300,000 in just two years, has forced the heavyweights of the telecommunications world, like AT&T and Verizon, to dial into the technology as well.

"All of the telephone companies will be getting in," says telecommunications expert Susan Kalla. "All of the long distance companies will be in."

Major corporations like Ford Motor Company are also racing to take advantage of 21st century technology. In Detroit, Ford is in the process of shifting 50,000 employees to Voice Over IP.

"We're doing it first and foremost to take money off the table, to save money," says Ford's Information Technology Director George Surdu.

Surdu says to a phone user, there's no difference between a regular landline phone and Voice over IP. But the difference to Ford is huge. Surdu says the technology saves money by integrating voice and data onto the same line, which also makes video conferencing easier.

He projects significant savings.

If you've been waiting for a catch, it's probably this: less than one-third of U.S. households have high-speed Internet service. But experts predict as more people get it, they'll switch to Voice over IP just as quickly as they embraced the cell phone.

"I suspect within ten years everyone will have it," says Kalla.

People like Dushowny are already finding it an easy call to make.