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Cheap Choice Coming For Long-Distance Calls

Vonage In Print News

November 13, 2003
By Tyler Hamilton

Flat rate calling through Internet, phones Vonage launching service by end of the year.

I recently picked up my home phone in Toronto and called a friend in San Francisco.

It was a local call, so there were no long-distance charges.

Yes, that's right - a local call. I also called another friend, this one in Toronto. It was a long-distance call, but there were still no long-distance charges.

Confused? Let me explain.

I'm testing out a new service from New Jersey-based Vonage Holdings Corp., which bills itself as a "broadband phone company. Vonage's service is a form of voiceover Internet protocol, meaning you can make phone calls through a high-speed Internet connection - cable, DSL or wireless - and in most cases completely bypass Bell.

It has the potential to bring huge savings and greater flexibility to consumers and small businesses.

Using the Internet to talk to people across long or short distances is nothing new. But Vonage takes us beyond the days of using a clumsy microphone and headphones to make free calls through your computer.

The software was complex back then, the quality was dubious, and the person you called usually had to use the same software and would have to prep their computer to take a call.

Oh, how things have changed. With a service like Vonage, you can forget the computer, forget software, and forget logistics. You can use your existing telephone to call anybody else with a telephone - all you need is a high-speed Internet connection. Plus, the quality is almost as good a your regular telephone service, and certainly better than what your mobile phone offers.

It's not free, but it's shaping up to be a cheap choice compared with the phone company. Small businesses and homeowners may be able to trim $20 or more from their phone bill.

Vonage flat-rate calling plans range from $25 (U.S.) to $35, with the latter providing unlimited long-distance calls to anywhere in the United States and Canada, not to mention dirt-cheap international rates. This all includes a slew of features, such as call waiting, voicemail, and caller I.D., and unlike regular phone service, users can manage their accounts and calls through the Vonage Web site.

A spokeswoman for Vonage, which has more than 50,000 subscribers in the United States, said the company is still on track to launch its service in Canada by the end of this year, either on its own or through a partnership with a cable or Internet service provider.

So how does it work? First, you'll have to purchase a start-up kit through a local retailer, directly through the company's Web site, or from a cable/ISP partner, depending on how the service is deployed in Canada. Registration typically takes place online, at which point the user can select a phone number and provide all necessary credit-card information for monthly billing.

When that's done, you'll need to plug your regular phone into a Cisco adapter that Vonage supplies for free. Then plug the adapter into your home network router, which in turn plugs into your high-speed modem.

A word of advice: Using Vonage over a high-speed DSL telephone connection isn't as economical compared to cable and wireless because, at the moment, you still have to pay for the underlying local phone service before getting the DSL service.

What's the point of paying Vonage for service if it rides atop an existing phone service? Until this changes, it's a barrier for DSL users.

If you use a high-speed service from Rogers or Cogeco, you don't need a router, just plug the adapter directly into your cable modem. The adapter converts your analog voice into digital data packets so they can be shipped through portions of the Internet.

It's a simple, hassle-free process that takes only minutes. Once the gear is connected, you're ready. Simply pick up the phone and start dialing.

When I hooked up the service, I initially had a problem because I used a wireless router with my DSL connection. This caused a static sound on my line that I couldn't seem to get rid of. When I reconnected using a basic cable/DSL router, the service worked quite well. Vonage tells me they're working on the wireless issues.

Now here's the cool part. The number I selected had a San Francisco area code, meaning my calls to that city were treated as local calls. Vonage's software running the service decides who and where you are, based on your registration information.

Since the service offers local and long-distance calling at a monthly flat rate, location is essentially irrelevant other than for billing purpose - similar to e-mail addresses. When somebody calls me, they think they're calling San Francisco, giving me the appearance of having an office in California.

With the earlier reference in this story to my Toronto call being long-distance, it's because my number has that San Francisco area code. However, since I have a flat-rate plan, I don't pay anything extra for it.

For an additional $5 (U.S.) a month, you can have additional "virtual" phone numbers. For example, $15 monthly can make it seem like I have offices in New York, Boston and Vancouver. Anyone in those cities who calls won't have to pay long-distance charges.

There are a number of similar services on the market, such as Packet 8 from 8x8 Inc. and VoiceGlo from Inc., but Vonage is the most popular and the only one that has publicly announced plans to offer its product in Canada. You can buy the service today from VoiceGlo, but you'll have to pay in U.S. dollars and take a U.S. area code.

Web-based services such as Free World Dialup, with 69,000 subscribers, and Skype, a computer-to-computer service with more than 100,000 users, can be used by Canadians and are free. The quality is also terrific compared with a few years ago. But like services of the past, users are limited to calling each other in their respective communities.

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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.

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