Is an Internet Phone Right for You?

If you're as old as I am, you remember when phones were simple. You had one company--AT&T--for local and long distance calls. There were no choices to make or risks to weigh. You dialed and you paid, just like everyone else.

Is VoIP service right for you? We'll answer your questions about the new generation of Internet phone services.

What the heck is it anyway?

VoIP phone services let you replace your traditional landline phone with one that connects over the Internet. Today, your phone works on what is called the Public Switched Telephone Network (PSTN), a private network that reaches into your home through the standard phone jacks in the wall.

With VoIP services, your phone connects to the Internet over your cable or DSL modem. To do this, VoIP service providers bundle a small device, called a telephony adapter, that plugs into the broadband modem and translates the electrical pulses from your phone into IP packets that travel over the Internet. The way you use your phone is the same, even though the network underneath changes.

Why is it getting so much attention?

In a word: money. Internet telephony is cheap. An all-you-can-eat local and long distance dialing package can cost as little as $19.95 a month. You won't find any mainstream, traditional calling plans that meet these rates.

VoIP plans are also great for international dialers. Most plans offer rates to Europe of $.03 or $.04 per minute, while calls to Canada are treated like domestic long distance calls. Finally, calls within the network--that is from one CallVantage customer to another--are free.

What do I need?

First, you need a reliable broadband Internet connection. If your cable or DSL service cuts out even occasionally, you should stay away from VoIP services. Every time your Internet access hiccups, so will your phone service.

Second, you will need to install the telephony adapter (TA), which comes with the service. You can plug any existing home phone into the TA using a standard phone jack, then plug the TA into your cable or DSL modem using a standard network cable.

How does it sound?

That depends. In my experience, people I call can't tell the difference. Every so often someone will notice some stuttering or clipping in my voice, but it's been months since I've noticed anything like a prolonged 1-second-long dropout using my Vonage service. At its worst, conversations have been peppered with drop-outs similar to talking with someone on a cell phone with a bad connection. Usually, the reason for choppy voice quality can be traced to heavy traffic on my network, such as a large file being uploaded or downloaded crowding out voice bandwidth.

What if my power goes out?

Because DSL and cable connections rely on modems that need to be plugged in, when the power goes out, so do the modem and telephone adapter your VoIP phone relies on.

But cable lines keep humming in the dark, even though the modems stop working. If you are concerned about losing your phones during a power outage, consider buying a universal power supply--such as those from APC--that keep desktop PCs running during a power interruption. By plugging your broadband modem, telephone adapter, and any intervening network routers into that UPS, you'll avoid losing phone service during outages.

Can I call 911?

In general, yes, but it may not be what you think. Support for 911 is highly variable, depending on the provider and geographic location. My Vonage account, for example, provides 911 dialing. However, the call is routed to a different facility than landline calls, and it's not guaranteed that my name and address information will display at the call center. The result: An emergency dialing service that falls short of what I'm used to.

Support for 911 is a moving target, however, and VoIP providers are improving 911 dialing. If this is a concern for you, make sure to ask these providers what level of service is provided in your area. The information on their Web sites may be out of date.

Can I keep my phone number?

In most cases, yes. Most providers offer what's called Local Number Portability (LNP), a program established to allow people to change cell phone providers without losing their number. The catch is that it'll take anywhere from a week to a couple months for your old number to transfer to your VoIP account. In the interim, your VoIP provider can issue a temporary number, so you can make outbound calls; and your existing landline will continue to perform normally until the transition is complete. The problem is, if the LNP process drags on, you end up paying for two phone services--your VoIP line and the landline--for the duration.

Will I save a lot on taxes?

You'll save some. A typical phone bill can carry $10 or $15 in tax and regulatory fees. By comparison VoIP providers may assess a dollar or two in regulatory costs. In November the FCC ruled that taxing VoIP services is a federal matter, meaning that, for now, VoIP users avoid paying many of the state and regulatory fees that traditional phone providers charge. It's impossible to predict the future, but for now the tax savings from VoIP services remain.

Who should I sign up with?

Many providers offer limited national coverage, so the first order of business is to hunt down a provider that offers local area codes and phone numbers in your location. For instance, I'm a big fan of AT&T's CallVantage, but the service lacks 802 area codes for Vermont. So I use Vonage.

You also should consider up-front costs in the form of activation fees and penalties for disconnecting a service. Lingo, Packet 8, and VoiceWing, for example, all charge $40 to $60 if you cancel the service within the first 12 months.

For more information on available services, see our list of VoIP providers.

And for a review of several VoIP services, read Internet Phones: Clear Winners.

How do I know who is reliable?

Brand names like AT&T CallVantage and the new Verizon VoiceWing probably offer the best assurance that the service won't disappear. But there's a parade of VoIP startups, ranging from the well-established Vonage and long-running Packet 8 services, to up-and-coming offerings like Lingo, VoicePulse, and Broadvox. If it's assurance you want, go with the biggest. And right now, the biggest are Vonage and CallVantage.

Another thing to consider is what happens if the VoIP provider goes out of business. Traditional telephone service is highly regulated, but VoIP providers are popping up all over the place in a laissez-faire marketplace. Should your provider go under, it's quite likely you'll lose access to your phone number (in addition to your phone service). There simply isn't a mechanism for recovering from such an issue--yet.

What's the best way to switch?

If you're able to, adopt VoIP for a second line--a home office or kids' phone, for example. That way you won't be in deep trouble should the service go south on you. And you'll get a very good feel for all the quirks that Internet phone services can bring. If you are happy with the second line after three months or so, it's probably safe to switch your primary line over.

Can I connect on the road?

Absolutely. The old saw in real estate is location, location, location. Well, VoIP is the opposite. No matter where you connect your telephone adapter to the Internet, the service behaves like you are at home. So when I go on a business trip to California, I can plug my TA into a hotel broadband connection and make calls from my office phone. Not only do I dodge cell phone roaming charges, but calls to my office line ring at my location. It's pretty slick.

Can I use more than one phone?

The easiest solution is to get a multihandset cordless phone, like the Uniden PowerMax 5.8 GHz set that I picked up from Costco a few months back. Plug the base into the VoIP TA box and then place the other handsets where you need them. But if you want to run phones off of multiple wall jacks, it'll take a little doing. You can read a great, detailed tutorial on running whole-house VoIP service here.

The simple fact is, VoIP is not as reliable as traditional phone service. VoIP services run over the shared Internet, which simply wasn't designed for real-time applications like voice. But what you save by using VoIP in money and what you gain in convenience might be worth the trade-off.

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