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Vonage, a VT2142 and a RTP300, My Experiences - A Detailed Review
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Internet Phone Service Cost Less, Offer New Options


Vonage In Print News

Internet Phone-Service Firms Charge Less, Offer New Options

July 29, 2004

By Robin Arnfield

For most of their five years apart, the Browns paid about $50 a month for local phone service and another $20-$30 in long-distance charges. That was until November, when they got one of those new-fangled Voip lines. Now they're spending about $20 a month.

"It was all about saving money," says Greg, 31, a business and technology consultant and an admitted "early adopter" of technology gadgets. Though Porsche, a research scientist, is less comfortable with new technology, she's perfectly comfortable with the notion of saving $50 to $60 per month on phone service, her husband says. That's $600 to $720 a year, he points out.

The Browns are among a growing number of consumers who are subscribing to a relatively new phone service known as Voip -- Voice over Internet Protocol. Though precise figures are hard to come by, analysts say the number of Voip customers has grown to more than 1 million. Developed more than a decade ago, Voip service appears to have worked out its kinks and is beginning to become attractive to broadband Internet users as a legitimate lower-cost alternative to other telephone services. Instead of sending analog voice signals over standard telephone lines, Voip sends packets of data bits over the Internet. By bypassing or minimizing the use of the local phone network, Voip providers incur considerably fewer costs and are able to pass those savings on to consumers.

All you need is a broadband connection to the Internet (cable or DSL) and an adapter the size of a cigar box. The adapter, which companies provide for free, plugs into the computer and into the cable jack (for broadband) or the phone jack (for DSL).

The knock on Voip has centered on the quality of the telephone call, but that deterrent appears to be waning as the technology improves. "If I never told you you were on a Voip line, you'd never know," says Louis Holder, executive vice president of product development for Vonage of Edison, N.J., one of a handful of Voip providers in the Boston area. Holder's call over a Voip line was as clear as on a regular phone line. Voip users say that, mostly, their call quality rivals traditional telephone service.

With monthly rates of $20 to $30 for unlimited calling anywhere in the United States and Canada, Vonage and other Voip pioneers, including Packet8, VoicePulse, BroadVoice, and voiceglo, are taking on traditional phone service providers. Verizon, Comcast, and RCN all are planning Voip offerings for later this year; AT&T already offers CallVantage Voip service. For its high monthly charge of $40, it offers exclusive features such as the ability to make the phone ring in five locations simultaneously.

Even cheaper, though not nearly as widespread, is peer-to-peer telephone service over the Internet. Websites such as Net2Phone and PhoneFree enable users to make free phone calls to anywhere in the world, provided that both the caller and the recipient of the call download some free software. Such services are more of a novelty that appeals to people who spend considerable time at their computers, according to Kate Griffin, senior telecommunications analyst at the Yankee Group in Boston.

It's the Voip service, Griffin says, that consumers are taking to. Market development for Voip service "is still in its very early stages" and widespread use of Voip is still a year or two away, Griffin says, though an increasing number of consumers are discovering its cost advantages and features, which include having any area code you want and being able to take your Voip equipment on the road.

Yet despite the significant cost savings and the cool features, Voip still has its limitations. "There will continue to be some hiccups with the new technology," Griffin says. "There are still reliability issues. And the quality isn't always there. It works like a dream 95 percent of the time."

What about the other 5 percent? There are times when "handoffs" between a Voip line and the Internet are not clean. When that happens, calls can be dropped or scratchy to the point of being indecipherable. In addition, E-911 systems don't recognize the street location of calls coming from Voip lines (though users can still call 911), Voip service doesn't work with home alarm systems, and, unlike regular phone service, Voip service doesn't work in a power outage. Without a battery backup, when your computer goes down, so does your Voip service.

Because of these limitations, many Voip customers are using the technology as a second line rather than as the primary phone in their homes, Griffin says. Providers such as Holder from Vonage and Gary Morgenstern of AT&T say more technology advances in Voip service are addressing those issues and they should be resolved within a year.

Credibility and increased awareness of Voip advantages will bring the service to the mainstream, says Brian Martin, CEO of 8X8 Inc. of Santa Clara, Calif., which offers Packet8 Voip service. "As broadband usage develops and becomes more widespread, you'll see these (VoIP) services grow right along with it," says Martin. "As people become aware of the cost savings and some of the features, they're quick to sign on."



 
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†AK and HI residents pay $29.95 shipping. ††Limited time offer. Valid for residents of the United States (&DC), 18 years or older, who open new accounts. Offer good while supplies last and only on new account activations. One kit per account/household. Offer cannot be combined with any other discounts, promotions or plans and is not applicable to past purchases. Good while supplies last. Allow up to 2 weeks for shipping. Other restrictions may apply.

1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See www.vonage.com/911 for details.

** Certain call types excluded.

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