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Vonage Net Based Phone Service Lures More Users

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Net-Based Phones Lure More Users

January 27, 2005

By Michelle Kessler

When Kevin Cocco's friends in Montreal want to chat, they dial a local Quebec phone number — but it rings 2,300 miles away in his Utah home.

Cocco's Salt Lake City friends dial a different number, local to them. It, too, rings in his home. All his calls also simultaneously ring on Cocco's cell phone, letting him stay connected while snowboarding the Utah slopes. Think of it as a kind of high-tech call-forwarding that lets the phone ring at home, too.

The phone system costs Cocco, 34, about $20 a month because he uses a fast-growing technology called Voice over Internet Protocol, or VoIP.

Voip calls travel over the Internet, much as e-mails do. That doesn't mean Cocco is shouting into his computer. He just plugs a regular telephone into a special adapter, which is plugged into his home's broadband connection.

Calls made from the phone hop directly onto the Internet, bypassing regular phone lines. If Cocco calls someone who doesn't have Internet phone service, the call will return to a regular line for the last part of its journey. But for the most part, Internet calls avoid the tolls and fees that make regular phone service so expensive. Cocco saves about $40 a month.

His service, which he gets from No. 1 consumer Internet phone service carrier Vonage, also comes with some fun features. Cocco can pick numbers in almost any area code he chooses, since he's untethered from regular phone lines. He got the Montreal line so friends could call toll-free.

He can receive calls anywhere in the world, as long as his Vonage adapter is plugged into a working Internet connection. On a recent visit to his parents' house in Illinois, Cocco brought the adapter with him and plugged it into their broadband connection. His calls from the Salt Lake and Montreal numbers were ringing in Chicago.

"We called it the 'Bat Phone,' " he says. Cocco's parents were so impressed, they signed up for Internet calling, as did his sister in Wisconsin.

Although Internet phone calling has been around since the 1990s, it has been adopted mainly by high-tech businesses and gadget-lovers. That's changing. The U.S. has about 837,000 consumer Internet phone service subscribers, researcher In-Stat/MDR says.

Vonage and other Internet calling pioneers are being joined by such giants as AT&T, Time Warner Cable and Cablevision. "2005 is the first year (Internet calling) will be available in most areas from many operators," says Forrester Research analyst Maribel Lopez.

But as Internet calling takes off, Lopez and other tech analysts warn that the young technology is still buggy. Even Cocco, who loves his service, was hit with a half-day outage.

"There are problems, and some of them are going to take a fair amount of time and money to fix," says David Heim, editor of Consumer Reports magazine. Among them:

  • Performance. Internet calls can sound almost as good as regular calls. But a slow Internet connection or other network glitches can make quality degrade fast. It doesn't take much — surfing the Internet while on the phone was enough to break up a recent Internet phone call in a USA TODAY test.

    Testers for Consumer Reports and USA TODAY also occasionally had trouble receiving incoming calls.

  • 911. The 911 emergency system is built into the regular phone system, so it doesn't work well with Internet calls. Dispatchers might not know where an Internet caller is located, for example. Service providers are working on fixes and do have workarounds. But experts say they're clumsy, at best. "911 is still a big issue," says In-Stat/MDR telecom analyst Daryl Schoolar.

  • Power. Most Internet phone systems don't work when the power is off. That could be a big problem in an earthquake, fire or other emergency — or during a non-emergency outage. They also require a working high-speed Internet connection. If Internet callers' digital subscriber lines (DSL) or cable modems go down, so do their phones.

  • Technical know-how. Internet phone systems are easier to use than they used to be. But they still require a bit of fiddling and aren't for technophobes. High-tech systems, such as those that combine a wireless Internet connection and phone service, require even more skill to install.

    Internet calling is likely to get more attractive as additional services, ranging from free 411 information calls to video conferencing, roll out. "For things to really start to happen, we have to go beyond price," says telephony analyst William Stofega at researcher IDC.

    Businesses are already starting to take advantage of new features. Internet calling took off at companies first, since offices generally have powerful Internet connections and better backup systems than homes — the better to minimize the drawbacks of Internet calls. Increasingly, companies are taking advantage of the computerlike features of Internet calls, from online address books to video calls.

    Pacific Capital, a commercial mortgage firm in Pleasanton, Calif., uses an Internet calling system from Covad because of its features. "I can bring up my entire contact database from any computer," owner Jeffery Shaddy says. "I can play messages on Windows Media Player. ... You can video conference with it. You can data conference with it."

    But for consumers, the real appeal is expected to be the price, at least in the short term. "If you are spending more than $60 a month on local and long-distance, you stand a very good chance of saving money," Consumer Reports' Heim says.

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    Re: Vonage Net Based Phone Service Lures More Users (Score: 1)
    by gbaig on Saturday, February 12 @ 00:04:25 EST
    (User Info | Send a Message)
    I live and work in Saudi Arabia, my family and friends dial my local Toronto number which then rings 12000 miles away in Riyadh. Its amazing.
    Thanks Vonage

    †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 for details.

    ** Certain call types excluded. is not an official Vonage support website & is independently operated.
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