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How Do Internet Phone Calls Work?


Vonage In Print News

December 12, 2003

By Staff

How do Internet phone calls work?

AT&T's announcement Thursday of the first phase in 2004 of a national rollout of Internet phone service is the clearest evidence yet of a coming revolution in how Americans will communicate. The technology, voice over Internet protocol, or VoIP, has the potential to provide cheaper phone service with more new features. It also poses a competitive threat to the conventional phone business. USA TODAY telecommunications reporter Andrew Backover answers some of the questions about the new technology.

Q: How does Voip work?

A: It turns voice calls into data packets and sends them on the Internet or a similar network. Near the destination, they are reassembled and delivered like traditional calls.

Q: What do I need to get it?

A: You can't get Voip without separately purchasing a broadband Internet connection, such as DSL or cable modem, which costs about $25 to $45 a month.

Q: How much does the Voip part cost?

A: There are offers in the market for unlimited local and long-distance calling, plus calling features, for as low as $35 a month. AT&T has yet to announce its pricing plans.

Q: How does that compare with similar packages on regular phone networks?

A: Those often cost $50 to $60 a month, plus taxes and regulatory fees that can exceed $10 monthly. By comparison, Vonage's $35-a-month plan costs $37.54 after a 3% federal excise tax and a $1.50 regulatory recovery fee. New Jersey customers pay a 6% sales tax.

Q: Excluding broadband cost, why is Voip cheaper?

A: Internet protocol networks are more cost effective to operate than regular phone networks. Voip also so far has escaped many taxes and regulatory fees levied on traditional calls.

Q: Will that change?

A: Maybe. The Federal Communications Commission is expected to impose the type of universal service fee, perhaps $1 per connection, levied on regular phones to fund rural phones.

The FCC is also considering making Voip providers pay local phone companies higher fees to connect calls to their networks.

Q: Where can I get VoIP?

A: Choices are growing. Cable operator Time Warner on Monday said it plans to sell home Voip on its systems.

Qwest launched Voip this week in Minneapolis/St. Paul and hopes to expand.

AT&T will offer Voip in several big cities early next year. Start-ups, such as Vonage, are expanding, too.

Q: Is the quality as good as my regular phone?

A: It didn't used to be. Garbled and choppy calls were common. Voip now is roughly equivalent to regular phone service and often better than cell phones.

Q: Will Voip work during a power outage?

A: No. While regular phone networks typically run during an outage, that's not so with VoIP. It runs through the broadband modem, which requires power. Providers are trying to solve this with batteries.

Q: Can I get 911 emergency service on VoIP?

A: That depends. Time Warner will provide 911 service through MCI and Sprint. AT&T, as part of an industry group, is working on a solution. Qwest says 911 service will be available in the next phase of its Voip rollout in 2004 but now advises consumers to keep their traditional phone line for emergencies.

This story was also included in
  • Bradenton Herald, FL,12/12/03
  • Hampton Roads Daily Press,12/12/03
  • Chicago Daily Herald, IL,12/12/03
  • Baltimore Sun, MD,12/12/03
  • Orlando Sentinel,12/12/03
  • Newsday,12/12/03
  • Chicago Tribune,12/12/03
  • Lakeland Ledger,12/12/03
  • Everett Herald, WA,12/12/03
  • Lakeland Ledger, FL,12/12/03
  • NY Times clip,12/12/03
  • San Jose Mercury News, 12/11/03



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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.

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