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Out, Damned Telco!

July 7, 2003

By Steve Manes

Just for the sake of argument, pretend your local phone company still behaves like an arrogant, rude monopoly. I know it's a stretch, but imagine your long-distance provider socks you for mysterious monthly fees and exorbitant international rates. Now envision your shiver of vengeful delight at a decisive snip of the cords.

This is no fantasy. If you have a high-speed Net connection like cable or DSL, you can jack your existing phone into it and make that snip right now. The main difference you'll notice is a lower bill. For a $30 one-time fee plus $40 a month, an Edison, N.J. company called Vonage will route your calls via the Net.

The tariff includes unlimited local and long-distance calling to the U.S. and Canada, voice mail, caller ID and call waiting, and features like call forwarding, call return and busy-signal redialing, for which competitors like MCI's $50-per-month "The Neighborhood" charge extra. Pay $10 more a month and you get a bare-bones second line officially meant for fax but usable for voice, with 500 minutes of long distance. International rates are low. Lesser plans start at $26 monthly. New Jerseyites pay sales tax; the only national add-on is a 3% federal excise tax.

You generally get to keep your own number, and it works with your current phone, not a computer. The most obvious difference is the cabling. When you sign up, Vonage sends you a box called an Analog Telephone Adapter (ATA for short). Plug an Ethernet cable from it to a router or gateway--a box you probably have if you have a home network, available from Vonage for $40 if you don't. A standard wire goes to the phone. Pick up the handset, and you've got dial tone.

In theory. Initially toneless, I spent half an hour on my traditional phone with a puzzled technician. The fix amounted to unplugging and replugging the router. Annoying, yes--but at least I didn't have to hang on the line for a telco rep and then hang around the house for half a day for an installer.

And calls sounded fine. Only when I forced the computer to transfer unusually massive amounts of data while I talked on the shared line did my voice break up, and then for just an instant. You get landline clarity, not cellular fuzz.

There are a few catches. Power or Internet outages make the phone useless. All calls, including local ones, require dialing 1 plus the area code. Calls to 911 may not be handled as quickly as usual by the local call center and won't supply emergency operators with your address. For now, Vonage numbers can't appear in local directories. Routing dial tone to extension jacks via house wiring requires a smidgen of expertise.

If you want to pretend you're somewhere else, Vonage will let you pick a number in almost any area code you choose. If your "office" is on the beach in Malibu, you could pretend to have a "branch" in New York by buying a second number for $5 a month. You manage your account via the Web, where you can listen to voice mail over your PC speakers (or have the audio e-mailed to you automatically) if you don't want to phone in for it. And you can use the ATA box almost anywhere you can get high-speed Internet access, say a summer house abroad; as long as you've got Net, calls cost not a penny extra to the U.S. and Canada from anywhere.

Vonage says it's completed 25 million calls for its 27,000 customers thus far--a mere droplet in the vat of trillions of phone minutes Americans use yearly. But for the first time, Vonage makes it easy for individuals to cut old-fashioned phone ties by using the Internet. If that doesn't make telcos feel uneasy, it should.

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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 for details.

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