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Tired of paying for phone calls? Convinced that PC-to-PC or PC-to-phone connections are too noisy, echo-filled and unreliable? Want to jump onto the peer-to-peer thrill ride? Well, Free World Dialup, a new company founded by long-time telecommunications industry analyst Jeff Pulver, thinks it has just the thing for you.

Free World Dialup hopes to use broadband Internet connections and peer-to-peer technology to eliminate long-distance phone charges. Here's how the system works, according to FWD executives: You need a cable or DSL Internet connection and a flat-rate calling plan from your local phone company. FWD recommends that customers have two phone lines, dedicating one to the FWD service. Then you need a $150 Cisco Systems Komodo Fone that uses the Internet, rather than phone lines, to place calls.

Attaching the Komodo Fone to your broadband connection makes the Fone a "node" on the FWD network. When you're not using the phone, anyone else with a Komodo Fone can call anyone in the city where the node is located. The call is routed through FWD servers and over the Internet, bypassing phone company charges for long-distance calls.

The system may not be as convenient as it initially seems. Each Komodo Fone supports only one phone call at a time, so if a particular city has only one FWD node, no other FWD calls can be routed into that city until the first call is over, say company executives. The system is "like a telecom timeshare," Pulver says.

Volume Improves Service

Unlike a timeshare, though, if you pick up the phone while your node is being used for calls, the first call on the line will be disconnected. That "will probably annoy some people," Pulver admits, but priority for the phone's use is given to its owner. So far, customers have experienced no problems with interruption, he says.

The quality of service issues that could occur "might frustrate people," but will likely not deter them, Pulver adds. Free World Dialup will be "as available as the number of FWD customers make themselves available," says Thomas Anglero, FWD chief executive officer.

"Once people start building critical mass in the community, that critical mass will bring people in by definition," thus creating more free lines, Pulver says. He expects to hit critical mass in 18 to 24 months. FWD will offer a detailed listing of node availability and provide a light on the phone to indicate that the line is in use, he says.

Despite FWD's potential problems, some observers give the company a chance, partly due to Pulver's good reputation.

Calling the service "very unique," Tom Jenkins, director of consulting at TeleChoice, says he doubts Pulver would start such an enterprise without having thoroughly planned and targeted the service.

Hurdles Remain

Still, Jenkins has questions. How is it better than existing PC-to-PC calls, he asks, noting that 100-plus Internet sites offer similar services. And a broadband customer probably also has a PC powerful enough to make reasonably good-quality calls over the Internet, he notes.

In addition, because of the Internet's unreliable nature, "there will be times that it is not a toll-quality call," he says.

Pulver acknowledges that sound quality could be an issue, and says that FWD's service uses dedicated Internet appliances optimized for telephony. "Until a PC is optimized for telephony, the performance will be better using the dedicated Internet appliance," Pulver says. Also, the Komodo Fone requires a comparatively small 64-kilobits-per-second broadband connection.

Another analyst is more skeptical, dubbing FWD "a gimmick more than a real opportunity to make a phone call." Alex Winogradoff, a vice president at Gartner Dataquest, notes, "To use another person's phone to complete my call seems irrational."

About 40 people worldwide, from Sydney to Stockholm to St. Louis, are already hosting Free World Dialup nodes. Anglero expects that more than 300 nodes in 20 countries will be running by the public launch. That will occur after beta testing ends, and when Cisco can commit to shipping the Komodo Fones in quantity, Pulver says.

FWD expects to make money not by selling phones or charging fees but by selling communications applications to customers. Pulver won't elaborate, but TeleChoice's Jenkins speculates such services could include call forwarding, messaging, voice mail, conference calling, or even downloadable applications.

Still, FWD's services are likely to serve only "a very small niche," Jenkins says. The system is designed in a viral, "friends-and-family" way, much like America Online's Instant Messenger, which is most useful when your associates are also online, he notes. But unlike AIM, FWD is not free. Jenkins says that equipment costs, plus the need for participants, may make it difficult to grow FWD to become the Net telco of choice.

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