I am always fascinated by the ways technology can improve our lives and, in many cases, allow us to do things easily and cheaply. A perfect example is telephone service.
For more than a century, having a telephone in one's home meant signing up for service from a telephone company, running wires into your home and having a traditional telephone instrument. In the United States, prices for a single private line vary from perhaps $16.00 to as high as $35.00 per month, depending upon the local telephone company, the rates established by the state utilities commission and other factors.
Next, you need to add in the options. Oh yes, there are multiple options to choose from, and each one costs an incremental amount from most telephone companies. You can choose from call waiting, caller ID, call forwarding, three-way calling, call transfer, voice mail, repeat dialing, and more. Each of these services typically adds another $1.00 to $5.00 per month. It is not unusual to pay $25 to $45 per month for a single telephone line with all the options that you want.
Of course, you must then add in the cost of long distance calls. (U.S. residents are fortunate in that local calls are available at no extra charge. Telephone companies in most other countries charge a fee for local calls.) Long-distance charges are only a fraction of what they were before the breakup of Ma Bell, but they still add a significant amount to the monthly bill. Of course, I don't have to tell you all this if you are the one who pays the bills in your household. You already know how much your total telephone bill was last month.
Today's high-speed in-home Internet connectivity offers a new option, one that can deliver more features per dollar. In other words, you can save big bucks with Internet telephone service. This new technology is not perfect, however. There are a few drawbacks that you need to be aware of before making the leap.
VOIP (or Voice Over Internet Protocol) is a great new way to make and receive phone calls, using your broadband Internet connection instead of your standard phone line. A VOIP service converts your phone calls into data that zips through your high-speed Internet connection, just like web pages. It comes out the other end just like a regular phone call. Your callers will never know that it's any different since it sounds just like a regular phone call.
VOIP is normally pronounced almost the same as "voice." Keep the same sound of the first three letters, then substitute a P for the letters "ce."
There are three basic types of VOIP services available today:
1. PC-to-PC calling - These "hobbyist" type services require a Windows, Macintosh, or Linux computer on each end of the connection. The user must connect a microphone and earphones (or headset) to a regular computer, install special software, and then make calls to other computers via the Internet.
While cheap to set up and able to provide high-quality connections, such hobbyist systems are quite limited. For one thing, the computer must be powered up and running all the time in order to receive calls. Next, the voice software must be running all the time in order to receive calls, consuming valuable CPU cycles and memory space. This will slow down your computer; older systems will have the most noticeable degradation.
There may be some impact when running other programs. For instance, talking on the computer may be impossible when simultaneously downloading a file and also formatting a floppy disk.
While using your computer to make telephone calls, you should keep in mind that the typical desktop and laptop computers were not designed for such usage. Call quality may suffer. For instance, none of the hobbyist level Internet telephone services I know of support QoS, a standard within the telephone industry. Without QoS, voice communications may suffer from "jitter," delays, and choppiness.
NOTE: QoS is short for "Quality of Service," a networking term that specifies a guaranteed throughput level. For a detailed explanation of QoS, look at http://en.wikipedia.org/wiki/Quality_of_service.
Finally, most of the personal computer-based systems are designed only to talk to other computers running the same software. The big advantage of these hobbyist services is cost. Placing a call from one computer to another is usually free of charge anywhere in the world, assuming that an Internet connection is available. Someone in New York can talk to another person in Calcutta for hours per day without paying a nickel for toll calls. Another advantage is that some of these services work well on dial-up connections, although with lower audio quality.
2. PC-to-telephone calling - These are extensions of existing PC-to-PC services. In most cases, a "gateway" to normal telephone networks is available. You put your headset on, connect it to your computer, and command the computer to connect to the distant gateway and then beyond to a regular telephone anywhere in the world. Some systems are one-way: you do not receive an assigned telephone number but can call out to regular telephones. However, they cannot call you. Other systems are two-way: you have an assigned telephone number that can receive calls from regular telephones as well as make calls to the same telephones. Most PC-to-telephone calling systems charge fees for the service. All the technical disadvantages described earlier still apply: power must be left on, the system may not multitask well when phone calls are in progress, calls suffer from "jitter," and other problems.
3. Commercial quality telephone-to-telephone Internet-based services are designed to transparently replace your local telephone company's service. You use a regular telephone, not a computer and headset. In fact, you don't even need to own a computer at all, although you will need a broadband DSL or cable modem connection. You may use your existing broadband service. Instead of a computer, you use a regular telephone, such as the one you already own. If you need a new telephone, you can purchase any standard telephone in department stores, drug stores, Radio Shack, or at any of a thousand other places. You will also need a VOIP "black box" (properly called an Analog Telephone Adapter, or ATA). These units may be free when you sign up for VOIP service or may cost as much as $100.
The telephone replacement services are used in exactly the same manner as your local telephone company's service. In the United States, that means you pick up the handset, listen for the dial tone, and then dial 1 followed by the area code and then the telephone number being called, such as 1-800-555-1212. The typical telephone-to-telephone Internet service is easier to use than a cell phone. If a visitor to your home was to make a telephone call using your Internet telephone, he or she would not know there was any difference from a regular telephone line. Those who call you also will not be aware of any differences; they will think they are calling a regular telephone.
With the typical telephone-to-telephone service, you do not need to leave your computer running all the time. You do, however, need to leave the broadband DSL or cable modem hardware running at all times as well as the VOIP "black box" (ATA). Luckily, all these devices consume very little power. The total amount of power required isn't much more than that required by a night light.
For the remainder of this article, I will be comparing commercial quality telephone-to-telephone services versus traditional telephone service. In other words, I will describe only those services in which you pick up a telephone and then can dial directly to any other telephone in the world. Descriptions of hobbyist-grade PC-to-PC and PC-to-telephone services that require software on your desktop computer will be left for a future article.
Background
VOIP phones offer cheaper rates because they use the Internet for most of the distance instead of using traditional phone lines. If you are in New York and use your VOIP phone to call a telephone number in Los Angeles, your VOIP call travels from New York to Los Angeles across the Internet. It then reaches a "gateway" in the Los Angeles area. This gateway connects your call from the Internet to the local telephone company's lines. In short, it is a local call as far as the telephone company is concerned. You used the Internet to bypass the long distance lines (and charges). It costs the telephone companies less to handle that call, and the cost savings are passed on to you.
Advantages
The advantages of Internet-based telephone services include the following:
1. Price Almost all Internet VOIP telephone services are dramatically cheaper than traditional telephone service from your local "Baby Bell" provider. The following is typical of most VOIP providers:
a. Monthly service charges for one line vary from zero to about $25.00. At the low end of the scale, Soyo's Z-Connect service (http://phone.soyo.com/service.php) is a "pay as you go" plan in which there are no monthly fees. You only pay for the minutes used. Most other VOIP providers charge $15 to $25 per month and then include a large number of minutes each month. At $20 or $25 per month, the plans usually offer thousands of minutes or even unlimited usage.
b. A wide variety of extra services are usually included free of charge. Most VOIP providers include call waiting, caller ID, call forwarding, three-way calling, call transfer, voice mail, repeat dialing and more, all at no extra charge. Similar services from traditional telephone companies can add $15 or more to the monthly bill. Some VOIP services will even send voice mails to you as e-mail messages with attached MP3 audio files or allow you to listen to the messages on a web page.
c. Calls within the United States (and usually Canada) are very cheap. For instance, Packet8 and Vonage offer unlimited calls to phone numbers in both countries for $19.95 and $24.99 respectively. For even less money, you can purchase 500 minutes per month for $14.99 from Vonage. These prices are very attractive to anyone who makes a lot of long-distance telephone calls.
d. Calls to countries outside North America are also very cheap. Here are a few typical per-minute prices for calls placed to:
Australia 5¢
Brazil 9¢
England 4¢
France 4¢
Greece 8¢
Hong Kong 4¢
India 17¢ to 18¢, depending upon the city called
Italy 4¢
Japan 6¢
Mexico 7¢ to 9¢, depending upon the city called
Russia 6¢ to 12¢, depending upon the city called
South Africa 10¢You may note that all those prices are much, much lower than the international toll charges of most regular telephone companies.
e. VOIP telephone devices are very popular outside the United States. In some cases, overseas individuals or companies that do a lot of business with U.S. customers find that a VOIP phone with an assigned U.S. telephone number is much more cost effective than placing an overseas call via a regular telephone service. Users in India or China or Africa pay the same rates for calls to the U.S. as a VOIP user in the U.S.
For instance, a vendor I used to deal with in Mumbai (Bombay), India, used to call me on a regular telephone for about fifty cents per minute. They often spent hundreds of dollars (or thousands of rupees) per month for telephone calls to the United States. The connection was often poor quality, and we spent half our time shouting "What?" into the handset.
The company in India then obtained a VOIP phone with a U.S. telephone number assigned. They called me as often as they wanted and talked as much as we both wished. Likewise, I could call them often and talk for a long time simply by calling their U.S. telephone number. All of this costs the Indian company a flat fee of less than $25.00 per month.
The VOIP connection with India usually is excellent with high quality audio on both ends. (I am using a T1 connection at the office while the Indian company has an OC3 connection, higher speed than T1. These connections are much faster than the typical in-home broadband connection and may explain why we typically have high-quality audio connections. There have been a few exceptions, but the average connection has better than that provided by the Indian telephone company and its American counterpart.
f. Assigned telephone numbers do not need to be in the same area code where the customer is located. For instance, if you live in Chicago but have many relatives in Orlando, you can select an Orlando telephone number for your VOIP phone. Any of your relatives in the Orlando area can call you by dialing your Orlando telephone number and without paying any toll charges, even though the phone rings in Chicago. \
g. The VOIP device is assigned a regular U.S. (or Canadian or U.K. or whatever) telephone number. Anyone calling that number from an old fashioned telephone pays for a toll call to that location, not to the location where the user is located. In my previous example, my vendor in India had an assigned telephone number in the U.S. I called my vendor in India by dialing their U.S. number. I did not pay a toll charge to India.
h. Extra numbers: Several VOIP providers will allow for the addition of second or even third or fourth numbers to the same line for additional fees. With some VOIP providers, it is possible to have a number in almost any U.S. (or sometimes Canadian) area code plus a toll-free number plus a number in London and another number in Mexico City. This can make your small company or one-person home office appear to have branch offices around the world. All calls placed to those numbers will ring on your VOIP phone. Prices average about five dollars per month for each extra number. The toll-free number probably costs more or has additional per-minute charges. Not all VOIP providers offer overseas numbers. Check the VOIP provider's web pages for details.
i. Calls from one VOIP phone to another VOIP phone provided by the same service are usually free of charge. This is especially attractive for international calls as well as those who choose one of the cheaper plans without unlimited calling. For instance, a Vonage customer in the United States can talk to a Vonage customer in Hong Kong for many hours, all at no extra charge above the monthly fee. The same would be true if they are both Packet8 customers or if both are SunRocket customers. In most cases, both VOIP users must use the same service in order to make free phone calls.
Even better, anyone using Soyo's no monthly fee plan or a similar plan from another company can make free calls to others on the same plan with no monthly minimums.
2. Selection of Providers - Unlike traditional telephone services, the VOIP service consumer has a number of vendors to select from. Unlike the local telephone company with its monopolies, each VOIP service provider must keep prices very low in order to obtain and keep customers. The consumer benefits from this competition.
3. Unlike traditional telephone services, you can take your VOIP telephone with you on a trip. If you are staying in a hotel or at a friend's house that has a broadband Internet connection, you simply plug in the VOIP analog telephone adapter to the network connection and use the telephone as if you are home. Anyone calling you will not be aware of your new location unless you tell them. There are no long distance fees, no forwarding numbers to memorize, and no roaming fees.
4. If you obtain a VOIP phone for the office, you can take it home with you nights and weekends. You can be "on call" all the time; customers always have one number to call. There are no answering services or pagers involved. Be aware, however, that the phone will not work when unplugged and in your briefcase in your car or on the commuter train. In that case, calls normally get forwarded to voice mail. This may or may not be an issue, depending upon the nature of your business. Most VOIP services offer an option to forward incoming calls to another number, such as your cell phone.
Disadvantages
All is not perfect with VOIP phones. Indeed, there are some significant disadvantages:
1. Power must be left on the DSL or cable modem, router (if used), and VOIP adapter unit at all times in order to receive telephone calls. In case of a power outage, you also lose telephone service. With traditional telephone service, the telephone lines usually remain active during power outages, although cordless phones and other sophisticated telephone equipment within the house may not function.
2. If your cable or DSL service stops working, you also lose telephone service. Some cable and DSL services have frequent service interruptions while others do not. If you do not yet have much experience with your local Internet service provider, ask your neighbors for their experiences.
3. Standardized 911 dialing is being implemented with Internet telephone services but is not yet universal. In case of an emergency, you may lose precious seconds while looking up the non-911 telephone number of your local police, fire, or ambulance service. (I suggest you tape those numbers onto the phone itself long before you have such a need. You may also place emergency numbers in speed-dial if your telephone supports that.)
4. You will have to purchase the analog telephone adapter that converts audio to digital signals and back again. Such devices cost $50 to $100 although most providers offer rebates. In the service I recently installed, the rebates totaled slightly more than the original purchase price!
5. If troubleshooting service is required, you (the customer) will need to perform most of the work. Unlike your local telephone company, Internet providers will not send a person in a service truck to your home. Telephone assistance is available, but you will need to troubleshoot the cause of the problem, be it the analog telephone adapter, the broadband modem, the broadband provider's service, a wiring problem in the house, or something not configured properly. Of course, telephone assistance is worthless when the telephone isn't working! (Do you have a cell phone?)
As a result of these disadvantages, many people do not feel comfortable having a VOIP phone as their only telephone. Some with two or more telephone lines in the house may keep one line but replace the other(s) with VOIP phones. Another option is to drop all traditional telephone lines but use both a VOIP phone and a cellular phone.
I recently shopped around for a new VOIP telephone service. I already had a cable modem in the house, and the local cable company's service has settled down in the past couple of years to become reliable.
I shopped around quite a bit and eventually settled on Vonage because of its service, pricing, and current rebates that reduced the total price of the VOIP analog telephone adapter to less than zero. That is not a typo error: a total of the rebates from Vonage plus two different rebates from Circuit City combined to refund more money than what I paid for the tiny box. In effect, the manufacturer and retailer were paying me! Obviously, I still have to pay for the monthly service.
Installing and setting up the Vonage service was simple. Upon opening the box, the first thing that I found was a single sheet of paper, warning me to set up an account on Vonage's web site at http://www.vonage.com/activate before plugging in the analog telephone adapter. That site asked for a number that was printed on the bottom of the device I had just purchased. After completing this registration step, I plugged in the adapter and then connected my phone. The Vonage adapter will support two telephones with two different numbers or even one telephone and one FAX number. I elected to only use one line and connected a standard cordless phone that I already owned to connector #1 on the back of the device.
My regular telephone bill has always been higher than I like, but not outrageous. The people in my household do call long distance but normally use less than 500 minutes per month. I elected to use Vonage's 500 minutes per month plan for $14.99 a month. If I find that I need more minutes than that, I can always upgrade to the unlimited plan at any time for an additional ten dollars per month.
Vonage offers the first month free of charge. However, the company did charge an "activation fee" of $29.99 plus ninety cents in taxes. I wasn't too pleased with that activation fee that had not been mentioned in the company's advertising or in the description of prices and rebate offers. In short, it was an unexpected expense.
The adapter that I purchased was the PAP2 made by Linksys, a division of Cisco. (See http://tinyurl.com/c5pwz for details.) The PAP2 is tiny, about the size of a deck of playing cards. It has the usual "wall wart" power adapter that takes up too many slots on a typical power strip. With a bit of ingenuity, I was able to rearrange power connectors in the rat's nest of wires under my computer desk. Before turning on power for the first time, I plugged in the cordless telephone and the Linksys-supplied cable to the router I use with my cable modem. A quick double-check indicated that everything looked OK. I then connected the power.
The four blue lights on the adapter danced and danced for a good minute or so, as the installation instructions had warned. Once the lights settled down, I picked up the phone and heard a dial tone. I dialed a local number and was soon talking to a friend. What could be simpler? I gave the number to my friend and asked her to call back. She dialed the local number and my phone rang. I could have been sitting at home or in Rangoon, and it would still be a local call for her. Call quality was excellent.
The Linksys PAP2 manual has several pages of instructions on how to configure various ports in the router for DNS forwarding, if needed. The manual suggests that this might be necessary on routers other than those manufactured by Linksys. However, my NetGear router is working perfectly without any re-configuration.
The real question is, "How well does it work?" My experience so far is limited, but I can report that in my first few days of operation all has gone well. Most of the people I talk with do not know that I am using an Internet VOIP phone unless I tell them. After being told, one person remarked that the connection sounded BETTER than a regular telephone connection. Most people simply report that they cannot tell the difference.
All is not perfect, however. There have been a few calls where I experienced "jitters," a sudden breaking up of the voice. Anyone who has used a digital cell phone for some time knows what I am talking about as digital cell phones use a somewhat similar audio-to-digital-and-back-again process. "Jitters" are common on digital cell phones used in areas with poor reception. The same thing can happen on an Internet VOIP connection if the network slows down. Given that my phone bill is now cut to about one-third of what it used to be, I can live with a few call quality problems.
Here is a listing of some of the better-known VOIP providers in the U.S. and a quick synopsis of their rates. See each company's web site for details:
Vonage is the best-known VOIP provider and also one of the more expensive. In return, the company provides high quality connections and local numbers in many area codes. Vonage offers residential plans at 500 minutes per month for $14.99 or unlimited minutes for $24.99 per month. These prices include voicemail, 3-way calling, call waiting, call forwarding, caller id with name, and more. Higher prices apply to commercial usage. These prices are good for connections to any telephone number in the U.S. or Canada. Calls to other countries are available for low fees. Details are available at http://www.vonage.com
Packet8 is another well-known VOIP provider. U.S. and Canadian residents may obtain unlimited calls to U.S. and Canadian telephone numbers for $19.95 a month. For consumers who live outside the U.S., the Freedom International plan allows you to have a U.S. phone number and make up 1,000 minutes of calling to U.S. and Canadian phone numbers for just $19.95 (US) per month. These prices include voicemail, 3-way calling, call waiting, call forwarding, caller id with name, and more. Higher prices apply to commercial usage. Calls to other countries are available for low fees. Packet8 also promotes video phones. Details are available at http://www.packet8.net
SunRocket has an interesting price plan: $199 per year provides unlimited calling to numbers in the U.S. and Canada. The company saves money by only offering an annual payment plan. $199 a year is equivalent to $16.58 a month. SunRocket also provides a free "black box" (analog telephone adapter), which might cost an additional $50 to $100 if you use another company's service. SunRocket also frequently runs specials that include a free cordless phone or similar enticements. Details may be found at http://www.SunRocket.com.
Soyo is primarily a hardware supplier. The company makes VOIP telephones, analog telephone adapters, routers, and more. The company has partnered with a VOIP provider to offer bundled VOIP service when you purchase a Soyo VOIP telephone. No ATA is required when you purchase a telephone made for VOIP service. The unique thing about Soyo Z-Connect service is that there are no monthly fees at all for outgoing calls. Instead, the consumer pays for all calls on a per-minute charge. Most of the company's products include some number of extra minutes, such as the G668 Ethernet VOIP phone that sells for $59.99 and includes 150 minutes of calls anywhere in the U.S. or Canada. These fees are for outgoing calls only. If you need to obtain an assigned telephone number for incoming calls, the charge will be an extra $9.99 per month. Calls to other countries are available for low fees. Details may be found at http://phone.soyo.com
BroadVoice is an excellent choice for anyone who frequently calls multiple countries. Not only can you obtain unlimited calls to the United States but also to 20 other countries. This is the only VOIP service that I know of that offers unlimited calling to so many countries. The countries are mostly in Europe but also a few in Asia and in the Americas. You can also add 14 more countries for an extra $5.00 (U.S.) per month.
BroadVoice service costs $20.00 per month. Details may be obtained at http://www.broadvoice.com.
One VOIP provider is a well-recognized "old fashioned telephone service" provider: AT&T CallVantage Service. At $29.99 per month for residential service, AT&T is the most expensive VOIP provider I could find in the U.S. Unfortunately, that isn't the entire price. AT&T also charges a $29.99 activation fee, a $29.99 cancellation fee if you drop the service in the first year, a $19.99 fee for changing your phone number, and a $5.00 fee for adding or dropping the extra options. At these prices, one wonders why anyone would switch from a regular phone to AT&T CallVantage Service. You can see for yourself at http://www.usa.att.com/callvantage/index.jsp A much longer list of VOIP providers in the U.S. and the rest of the world can be found at http://www.voip-info.org/wiki-VOIP+Service+Providers
In short, I am pleased with my VOIP service. It works well, although not perfectly. It is much cheaper than regular telephone service from the local telephone company. Since I also have a cell phone, I have no qualms about dropping the local telephone company's service entirely. The admitted drawbacks of a VOIP phone are offset by the use of my cell phone. Is a VOIP phone a good choice for you? I'd say "Yes" if you make a significant number of long distance telephone calls. All the recent immigrants and other people I know who have loved ones in overseas countries are snapping up VOIP phones like hotcakes. The cost savings in overseas toll calls alone can pay for these devices within weeks. If you only make a few long distance calls per month, the economics could be very different for you. For the rest of us, Internet phone service may be well worth considering. Ref
References:
VOIP ForDummies
Introduction to IP Telephony : Why and How Companies are Upgrading Private Telephone Systems to use VoIP Services [Download: PDF]
Switching to VOIP
Dick,
Interesting article re VOIP phones. It's far from clear that we can use multiple phones; we have several in the house. One fax/phone (we use the fax occasionally), a regular phone, a remote unit with a base phone and an auxilliary phone & charger, and a phone downstairs with an answering machine connected (far simpler than the Vonage voicemail system). (Our house isn't very big, but we're not able to use the remote phone all over the house. We could do this differently if need be, but wouldn't want to drastically change it.
Though we seldom use the fax, we do use it. Looking at the Vonage site, it appears we'd have to spend an extra $10/month to do so???
Since we have a son in Australia, the free in-network calling is most attractive if we could make this otherwise work for us. It would be a nice complement to the video calling equipment we're now using for no charge.
John Cook
Posted by: John Cook | October 31, 2005 at 05:21 PM
John, with Vonage (and I believe with any of the other services reviewed) you can add extensions to a line at no extra charge.
The Vonage unit simply has a normal RJ-11 telephone connector on it, the same as used by any standard telephone. A quick visit to Radio Shack or any other place that sells telephone cabling and connectors should produce everything you need to add other extensions throughout the house. You still only need the one ATA (analog telephone adapter) and one phone number from Vonage.
- Dick Eastman
Posted by: Dick Eastman | November 01, 2005 at 01:06 AM