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Internet Calling - What is VoIP?

By Rafe Needleman and Felisa Yang
(May 5, 2004; updated May 6, 2005)

An Internet phone service uses the Internet, instead of old-fashioned phone lines, to send voice. In most cases, you just plug your current telephone into a small box that your Internet phone company provides to you. The box, in turn, plugs into your broadband connection. Just as with regular telephone service, you pick up the phone to get a dial tone and press numbers on the keypad to call the person you want to talk with. And as with a regular telephone, you can call anybody in the world who has a phone. Alternatively, some services have softphones: your computer becomes your telephone, and you talk via a handset or a headset plugged into USB ports.

It saves money
Since the old-fashioned phone system works fine for most people, why bother? There are two main reasons: cost and features. The most popular advantage of Internet telephones is that calls can be extremely cheap or even free to anywhere in the world. However, just as with ordinary phone services, it can be hard to figure out which companies offer the best savings for your particular calling habits. But if you regularly call a particular area (for example, a relative overseas), you can almost certainly find an Internet phone plan with rates that are incredibly low. And calling other users of your Internet phone system will likely be free.

Cost may or may not get you in the door to Internet calling, since for many people, regular calling plans could save a lot, too. Regardless, it's the features that really hook most Internet phone users. You can do things with an Internet phone service that no traditional phone can offer.

Pick your area code
Internet phones work independent of any local exchange, so you're not tied to any one area code. This means that you can take your phone number with you when you move; it's as easy as packing the adapter you get from your service provider. You don't have to end your old phone service in one city and go through the hassle of setting up service in another. And get this: with many systems, you also get a choice of area codes. You can be running a small business in rural Montana and have a high-rent, New York 212 area code, if you want.

You can also get great integration with your computers. Some systems send all your voicemail to your e-mail in-box and let you dial phone numbers directly from Outlook. And even the smallest company can set up a virtual phone system that spans offices (or home offices) yet functions very much like a phone system used by a corporation with dozens of worldwide offices. For example, a small business can get features such as simultaneous ringing, in which a call to your main number rings on all three of your employees' phones, even if some of them are not Internet phones.

Not as easy as a regular phone
At this point, though, Internet phone service isn't for everyone. While VoIP hardware and software isn't as complex and hard to set up as other standard office technologies--such as wireless networking--it's still not as hands-off as plain-old telephone service. And finally, the quality of VoIP is variable. In the best cases, it can be far superior to that of a regular phone, especially for international calls. However, if your call ends up routed over a congested portion of the Internet, quality can degrade, which manifests itself as an uncomfortable lag between two parties in a conversation.

Internet phone service
In the most flexible form of VoIP, Internet technology replaces the connection between the telephone and the phone company. You plug an ordinary telephone into an adapter that connects to your broadband setup. Your call is routed over the Web to a VoIP service provider. This provider connects your calls to the telephone system. If the person you are calling is also a user of the same Internet calling system, the call will never touch the phone system at all.



PC-to-PC Internet phone
Free Internet phone systems such as skype and FreeWorld Dialup can bypass the telephone system completely, allowing you to make free calls to other users within their respective networks. Some free networks have added services, such as Skype's Skypeout service, that let you call mobile and standard telephones for a metered fee.



Internal VoIP
In a medium or large office, the internal phone system can be Internet based. In this case, calls between extensions, and possibly between office buildings, run over a private data network. To reach the outside world, the company's Internet phone system can connect to the Internet, the regular phone system, or both.



WHAT TO WATCH OUT FOR
Despite many advantages, Internet-based calling faces technical and political roadblocks that may affect you if you opt to go with it.

Technical
First of all, plugging in to Internet phones requires gear that not every household has. You must have an always-on broadband connection, either DSL or cable, and you need a spare Ethernet port on your hub or router to plug the Internet phone gateway into.

If your network connection goes out or the power to your network equipment fails, your Internet phone dies too. You can insure against power outages with an uninterruptible power supply, but if your ISP is less reliable than your phone service, keep that in mind if you'll be relying on your VoIP phone. New products, such as Actiontec's Phone Wizard, can help you bridge the gap between VoIP and traditional telephone services. Actiontec's device lets you manually switch back and forth between VoIP calls and standard telephone calls from a standard phone.

Since VoIP phone numbers move with your phone, not with the jack the phone is plugged into, calls to emergency services (911) won't automatically go to a local emergency call center. Until recently, in fact, 911 calls were not available on many hosted VoIP services. Today, 911 handling can be turned on, although you need to register your phone so that the call is routed to the right location. Also, when you make an emergency call, you will still have to say where you are, since that won't pop up on the operator's screen. All this may change soon--a number of Bells and Baby Bells are looking into opening their 911 calling infrastructures to VoIP providers. In particular, Verizon announced plans to test this setup in New York City this summer, the outcome of which will determine whether Verizon opens up the rest of its network.

If you have DSL and want to keep your phone number, you might have a challenge because DSL usually has a phone number attached to it. You can't typically turn off the number without interrupting your DSL service. You can, of course, get a new number from your VoIP provider, and this may be what you want to do anyway if you're looking for a VoIP line to expand your phone system. Today, Qwest and Covad offer DSL without a phone number attached (this is called naked DSL). If you're a cable-modem customer, this isn't an issue.

Political
The FCC greased the way for Internet phone service by exempting VoIP from the regulations and the taxes applied to regular telephone service. That's why Internet phone calls are cheaper than regular calls: Internet phone carriers don't have to pay the same taxes for 911-center or federal wiretap-access maintenance.

The reasoning behind the FCC's platform is sound: innovation grows more quickly when regulations and taxes are kept at bay. And there is a lot of innovation ahead in Voice over IP.

But vast and powerful forces are arrayed around telephony, and the current state of affairs is being maintained, in part thanks to ongoing hearings in Washington, D.C., as well as pressure from technology lobbies. Facing off against them are players in the telephone industry that claim that VoIP has an unfair advantage because of its regulatory exemptions. And taxation isn't the only roadblock Internet telephony companies will have to navigate: as of this writing, the FBI has proposed that Internet providers, including VoIP companies, provide wiretap access, which could require rearchitecting how these services work.

For an up-to-the-minute look at the status of Internet telephones and how this could affect you, see News.com's ongoing coverage of this topic.

The future
Though Internet phone service gives you features and performance that traditional phone systems can't offer now, this disparity won't last forever. Hardware companies like D-Link are now offering Voice over IP services. Already, IP is used by the major telephone companies to carry an increasing amount of voice traffic on their own networks, and a number of them have already rolled out Internet phone service directly to their customers, including AT&T, Qwest, and Verizon VoiceWing. Cable companies like Time Warner and Comcast are also offering VoIP Services and more and more calble companies will be offering these services in the fuure.

Moving voice to a fully digital platform means that innovation will continue to accelerate, and small, nimble companies will continue to come out offering new communications services. Teleconferencing, videoconferencing, and collaboration applications may soon be available as part of your integrated IP-based voice communications package.

VIDEO TUTORIAL 

	What is VoIP? Rafe Needleman, editor, CNET.com Business Buying Advice, takes you through VoIP 101. He shows you the different flavors of Internet phones available now and looks at Voice over IP's possible future.
Different types of Internet phones The pros and cons of Internet phones

Original Article


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