At Stake: The Net as We Know it

Google et al fear broadband carriers will tie up traffic with new
tolls and controls

Just
a few years ago, using the Internet to make cheap phone calls was better in
theory than in practice. Connections were often crackly and had echoes, and
households that traded landlines for the Internet could find themselves unable
to call 911 or without service in a power outage.

Those
problems haven't totally been solved, but the providers of VoIP are trying to
make their service indistinguishable from landlines. Consumers are responding
enthusiastically, with 3.25 mn estimated to be buying VoIP phone services by the
end of the year, says researcher Yankee Group-nearly three times as many as in
December 2004.

Certainly,
you have plenty of choices. Monthly rates run from as little as $19.95 at Lingo
and Packet8 to as much as $54.95 for Comcast Digital Voice for unlimited local
and long-distance calls. (With most VoIP services, international calls are
actually more expensive than using a calling card.) There are also activation,
shipping, and modem-lease fees. Still, for a household spending an average of
$53 a month on traditional local and long-distance calling, VoIP can translate
into more than $300 in savings a year.

With
most VoIP services, you have to install phone adapters-modem-like boxes acting
as intermediaries between a phone device and your broadband connection-on your
own or with a bit of over-the-phone tech support. With Comcast Digital Voice,
you get a service call with professional installation. With AT&T CallVantage,
it's a $140 option.

The
beauty of VoIP is that it will generally work with your standard wired and
cordless phones. Of course, you can splurge on new video-calling gear. The
Motorola Ojo PVP-1000, for example, sports a striking futuristic design and is a
great way for family members to stay in touch-provided, that everyone in the
family has one.

VoIP
has lots of other cool features. Because they are Web-based services, Vonage and
AT&T CallVantage can notify you of new voice messages and e-mail and send
along an audio attachment. VoIP services can also usually provide you with a
phone number with an area code outside of your city, state, and even country of
residence. You could get a New York VoIP number so your college kids in the city
can ring you up free of charge-even though you happen to live in Florida. VoIP
service providers may be able to use your existing phone number, so you don't
have to call all the people you know to have them update your address book
entry.

Before
you join the VoIP revolution, bear in mind that most services fall short of
traditional phone service in several ways. Skype technologies, the world's
most popular VoIP calling service, mainly facilitates free calls between
computers, so your phone won't receive these calls when your PC is shut down
unless you forward them to a regular phone for a small fee. Since VoIP operates
through your broadband connection, any disruption will cut off your phone, too.

Doubling Up

Many customers choose to retain their traditional landline for local calls and
use VoIP for long distance. After all, if your neighborhood loses power, most
VoIP services will go dead as well-not the case with traditional phone
service, which is supported by back-up batteries. One of few notable exceptions
to this rule is VoIP service offered by cable companies such as
Comcast. Comcast provides a back-up battery that keeps your phone
functioning for five to eight hours during power outages.

Some
other VoIP services can't patch a 911 call through at all. Or, if you have a
VoIP phone number with a different area code from your place of residence, the
call might be dispatched to the wrong location (say, to a New York emergency
center rather than to Florida, where you live). That's a big problem,
considering that the number of residential 911 calls placed through VoIP will
rise from 370,000 in 2004 to 3.5 mn in 2006, according to Intrado, which
provides 911 services to public safety groups and telecom companies.

US
telecom regulators have taken these concerns to heart. The Federal
Communications Commission has set a Nov 28 deadline mandating that all service
providers aiming to displace traditional phone service give emergency-response
workers the names and locations of their subscribers. This rule does not apply
to outfits, such as Skype, offering mostly PC-to-PC calling.

You
might also run into problems if you have a home security system. VoIP may not
work with your alarm set-up, so you might ask your security company to tune your
system or even install a cellular back-up system. That could run up charges of
$200 for the installation and $10 extra in monthly payments.

Clearly,
VoIP is a young technology, with lots of technical and regulatory knots still to
be worked out. But it has a lot to offer: increasingly crisp call quality at a
low price, which features traditional phone service providers often lack. Since,
most providers let you sign up without locking yourself into a one- or two-year
contract, VoIP may be worth a try.

By
Catherine Yang

With Roger O Crockett in Chicago and Moon Ihlwan in Seoul