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Device Promises Phone Bill Relief

October 14, 2003

By Mark Kellner

I've just hung up on a phone call to an acquaintance in the state of Kerala, in India. We talked for about 10 minutes, and the sound quality was good. The other night, I'd had a chat with another colleague in the Philippines. Again, the sound was fine.

Domestically, I've called New York, California, Illinois, Michigan and even the District, all with ease and good-to-excellent sound quality.

I didn't use regular telephone service. Instead, I used a phone connected to a small black box, which in turn was connected to my broadband router. Going through the same cable Internet service that brings e-mail and Web pages, I dialed all over the world - and received calls - bypassing the phone companies and their high charges.

The technology is called "Voice over Internet Protocol," or Voice over IP. It's hot, hot, hot right now, and it might change the way we make and receive calls.

In this test, I'm using a device manufactured by Cisco Systems Inc., and distributed by New Jersey-based Vonage Holdings Corp., which provides the telephone service. Their goal is to replace or supplant traditional phone companies. My goal is to save money.

For reasons I don't fully understand, Verizon hits me up for about $50 each month for a local phone line. I buy my long-distance from another supplier, which charges me about 5 cents a minute for domestic calls. My total phone charges are about $65 per month.

But if I read Vonage's advertising correctly, I could cut about $20 to $25 per month, get unlimited long-distance and have access to some nice international rates, such as 5 cents a minute to Western Europe, 6 cents to Australia, and between 13 and 23 cents to India. Those rates are substantially below AT&T's standard international calling rates, although that firm's 18 cents to the Philippines beats Vonage's 21 cents per minute.

On the whole, however, Vonage's global rates are better than most long-distance firms, and unlike some long-distance carriers, there's no extra monthly "sign up" fee.

How does this work? Well, it's in that black box, which converts outgoing voice signals to data packets that travel over the Internet, and handles the call routing. There are no "special" codes to dial, just standard ones for long-distance and international calls.

Incoming calls are routed over the Internet to your cable modem, where the black box converts everything back. Vonage will assign you a phone number, or you should be able to move your existing one. What's more, you can sign up for numbers in remote cities that are forwarded to you - a great way to save long-distance charges for Mom, or for an entrepreneur who wants to establish a remote presence.

You must have cable Internet - not DSL or dial-up - for the Vonage product to work. There may need to be some adjustments to your router for optimal quality. And, if the cable Internet service goes out - as mine did for five days after Hurricane Isabel - then you're stuck without a phone until the underlying service is restored.

These are early days for Voice over IP. There may be court challenges and other efforts to block Vonage and any competitors, because the telephone companies don't want to give up ground easily. However, the clamor to save money might win out yet. An extra $300 a year in my pocket is a nice incentive.



 
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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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