What is VoIP phone service?

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.

What makes it so popular?
What made VoIp phone service gain so much attention is MONEY. Internet telephony is cheap. A local and long distance dialling package can cost as little as $19.95 a month. You wont find any mainstream, traditional calling plans that meet these rates.

What do you need?
To set up your VoIP, you just first need a reliable broadband Internet connection. If your cable or DSL service cuts out even occasionally, you need to 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. Using a standard phone jack, you can plug your existing home phone into the TA, and then plug the TA into your cable or DSL modem using a standard network cable.

Who should you sign up with?
To answer the question of to whom you should 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 example, Im a big fun of AT&Ts CallVantage, but the service lacks 802 area codes for Vermont. So I will use Vonage.

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

How do you 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.