VoIP: The future of phone service?
But Voice over Internet Protocol requires broadband
Consumers with a broadband Internet connection can get a new type of telephone service priced far below more traditional calling plans, but they should do their homework before jumping in.


Most calls travel over the lines and poles of the traditional telephone network. But VoIP calls are carried over the Internet, and only use the traditional network if they’re going to someone who isn’t a VoIP subscriber. (VoIP users calling each other bypass the traditional network altogether.) VoIP service uses a broadband Internet connection and a piece of equipment called an adapter to convert a caller’s voice into digital information as it moves from the telephone to the Internet. It’s converted back to a normal phone call as it reaches its destination.


The most common form of Voice over Internet Protocol, or VoIP, allows customers to call anyone using regular phones, even if the person being called doesn’t subscribe to broadband Internet. First introduced by little-known companies such as Vonage, the service now is being launched by major companies such as SBC, AT&T, and Verizon.

VoIP isn’t for everyone. It requires a broadband Internet connection, which means a consumer must subscribe to cable-modem service or a Digital Subscriber Line (DSL) for an extra $30 to $60 per month on top of the price of the phone service.

But the biggest drawback is that most VoIP calling plans don’t offer traditional 911 service, if it’s offered at all. Often, emergency calls don’t even go to the 911 emergency center, but to a general number that may only be staffed during business hours. Also, sound quality may lag behind traditional phone service, and VoIP service doesn’t work if the power or the broadband connection goes down.

Still, VoIP could be an attractive, low-cost option for households that have a broadband connection. For example, MCI’s Neighborhood plan—not a VoIP plan—offers unlimited local and long-distance calling and several features, such as voice mail and caller ID for about $50 a month. Vonage has a similar plan for $30.

While MCI’s plan is burdened by taxes and surcharges that can inflate the price to about $60 or more, Vonage doesn’t have the same problem—yet. VoIP providers levy fewer taxes and surcharges because federal officials haven’t determined if and how the new technology should be regulated and taxed.

For more information about VoIP, call CUB, at
1-800-669-5556, or read CUB's “The Facts on VoIP.”
VoIP also has some nifty features absent from traditional phone service. For example, subscribers can get a “virtual number”—a second number in another area code. That means a person in Chicago could request a number with the same area code as a relative in another state, whose calls to Chicago then would be treated as local.

“VoIP may be the wave of the future, but for now most customers are probably going to stay with traditional phone service,” said CUB Board Representative Thomas Gary, of Oak Park.
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