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Vonage VoIP Is Emerging As A Land-Line Alternative

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Despite Early Glitches, Internet Telephone Technology Is Emerging As A Land-Line Alternative

January 24, 2005

By Kathryn Balint

You might have heard of an emerging telephone technology that transmits calls over the Internet instead of traditional phone networks.

The technology, known as voice-over-Internet protocol, or VoIP, allows callers to save money on their long-distance bills.

Some Voip services have reached the point where the sound quality is indistinguishable from those made on a plain old, circuit-switched telephone line.

But others, especially those that send telephone calls over the public Internet alongside e-mail and Web traffic, generally aren't as reliable as traditional phone service. At times, calls won't go through, just like how e-mails get delayed or Web sites don't load fast enough.

There are other drawbacks as well.

Hooking up to a Voip service is a do-it-yourself job, and 911 calls dialed on most Voip lines don't reveal the caller's location to the dispatcher.

Still, a growing number of consumers are ditching their telephone service and switching to VoIP, which initially was the domain of geeks.

In the 1990s, the first iterations of Voip used a microphone or headset attached to a personal computer.

Later, special telephones that plugged into the computer were sold. Calls could be made only to users with the same system. The technology was beset by glitches, bad connections and delays in the conversation.

"A few years ago, this was really a hobby," said Joe McGarvey, senior analyst with Current Analysis, a market research firm. "You had to call the person (on a traditional phone) or send them an e-mail to say, 'Get ready; I'm going to call you.'"

The attraction was that long-distance calls cost little or nothing, depending on the service.

These days, the quality is much better, depending on the service used. And instead of using just a computer or special phone, most of today's Voip services work using regular telephones.

Voip also requires a high-speed Internet connection, through either a digital subscriber line or a cable modem.

In addition to the cost of a high-speed Internet connection, Voip service typically costs $20 to $40 a month for unlimited calls within the United States and Canada. International calls cost an additional fee, but are almost always less than an international call made on a traditional phone line.

In general, here's how Voip works: Instead of plugging your telephone into a jack in the wall, you connect it to a small box attached to your digital subscriber line or cable modem.

Getting the rest of the phones in your house to work can be problem, depending on your service provider.

With some providers, you can use only the phone plugged into the Internet connection. That can mean running to your computer every time the phone rings.

One provider, Packet8, allows up to three phones to be connected to the adapter, which connects to the Internet connection. Packet8 recommends that customers who want to use multiple phones use cordless phones. The bases are then plugged into the adapter.

Others require you to disconnect your house from your local telephone company's network before plugging other phones into the wall jacks.

Vonage, the nation's largest Voip provider with 400,000 customers, has a tutorial on its Web site explaining how to cut the wire.

"If you don't disconnect from the phone company, sometimes there are random electrical surges that could potentially ruin the (VoIP) equipment," Vonage spokesman Jamie Serino said.

AT&T gives its Voip customers a "Home Wiring Do-It-Yourself Guide" for hooking up all of their phones. Or, for an additional fee, AT&T will send a technician to your home to do the job.

Time Warner installs the equipment, including setting it up so that all of the phones in your home will work, at no extra charge.

One area in which most Voip services fall short of traditional phone service is when dialing 911. Unlike traditional calls, Voip calls cannot identify the location of a caller for dispatchers who take the call.

Hanan Harb, San Diego County's 911 coordinator, recommends keeping traditional phone service even if you have Voip service.

Your computer is ringing

Phone calls using voice-over-Internet protocol technology typically require a high-speed Internet connection and work with a traditional phone and a special adapter.

$24.99 unlimited calls
Phone adapter included at no extra charge in U.S. and Canada.

"Make sure you have a regular land line in your home for emergencies," she said. "If you were to dial 911 with voice-over-IP, we would have no idea where you are."

An exception in San Diego County is Time Warner's local Voip service. It can identify 911 callers' location, thanks to a partnership with long-distance carrier MCI.

Other Voip service providers are scrambling to provide locations of 911 callers. Katherine Bagin, vice president of Internet protocol telephony for AT&T, said the company plans to make the service available in the next few months.
Power outages are another potential problem for Voip users.

Internet telephone needs electricity to operate. Vonage and others recommend that customers use battery backup systems to keep the connection alive in case of a power failure. Time Warner has a battery backup system built into its Voip cable modem.

The key to how well Voip works is the network a provider uses to send the calls.

Voip calls travel over a data network, then jump to a circuit-switched network or a cellular network if the call is to a traditional phone line or a cell phone.

A few Voip providers, such as AT&T and Time Warner, use their own data network to transmit calls until the calls move to a circuit-switched or cellular network, if necessary.

Because they have their own networks, that means calls aren't bumping against e-mails, online orders and other traffic on the Internet.

"That's a significant advantage in security, reliability and quality," AT&T spokesman Gordon Diamond said.
But most Voip calls are transmitted across the Internet, where the provider doesn't own the network.

"The Vonages of the world really can't control quality, because what they typically do is take their service and put it on an unmanaged connection," said Jeff Ahlquist, vice president of product development for Covad, a provider of Voip calling services for businesses. "They don't control the quality of service because they don't control the network."

For now, the quality of the calls sent over the Internet is good, said Keith Nissen, a senior analyst for market research firm In-Stat.

"The reason is because they don't have a lot of subscribers," he said.

But as the number of Voip users on the Net grows, there's a potential for more problems.

At the end of 2004, there were 953,000 residential Voip lines in the United States, compared with 89 million traditional phone lines and 190 million wireless lines, according to market research firm Stratecast Partners.

While the number of traditional phone lines is declining, Voip lines are on the rise. In-Stat predicts there will be 6.1 million U.S. residential Voip lines by 2008.

To snag some of those customers, big names in the telecommunications industry are beginning to break into the Voip market, including local phone company SBC Communications. SBC plans to begin offering Voip service in San Diego County by the end of March as a way to retain customers who might otherwise leave.

So far, choosing a Voip service has been largely trial and error for consumers.

Andy Abramson of Solana Beach tested half a dozen Voip services before settling on AT&T's CallVantage.

"I realized, 'Here's a product that really works,'" said Abramson, host of "KenRadio's World Technology Roundup," which is aired online. "I love it. More importantly, I love the features."

He said he has used the service to make calls from London, to conduct conference calls and even to add a line with New York City's 212 area code.

Michael Thompson of Tierrasanta tried AT&T for two weeks, but at the time, a consumer could use only one phone plugged into the Internet connection."

I didn't like having to go downstairs to get the phone," he said. Thompson then switched to Time Warner's Digital Phone, which he said provides better quality than his old phone line.

"The main thing is, the phone seems clearer to me," he said, adding that he likes getting three services – high-speed Internet access, cable TV and phone service – on one bill.

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