VOIP Becoming New Technology In Homes

CLEVELAND -- A growing number of homeowners are pulling the plug on their home phone going cell phone only, or turning to the cable guy.

But NewsChannel5 consumer reporter John Matarese checked to see if these alternate plans were ready for prime time.

Back in 1980, everyone had a big phone, big hair and a big phone company called Ma Bell. But times have changed.

«I haven’t had a home phone since I had a roommate 3 years ago,» Mark Bauer said.

Bauer, like many young singles, uses only a cell phone in his apartment.

«You’re able to live without a land line?» Matarese asked.

«I am able to live without a land line (laughs),» Bauer said.

For busy families with children, however, going cell-only may not be a practical option: most still want a central home phone.

But over the next year, millions of people will be offered another option: Voice over internet, or VOIP.

It’s not static-filled calls through computer speakers, Matarese said. It’s real phone service over your cable TV line!

Pat Jackson is one of Time Warner’s first Cincinnati-area customers.

Her home phones now run into a modem and onto her cable line.

Matarese said you may not even notice anything’s different.

«Can you tell the difference between this and a regular phone line?» he asked.

«No, not at all,» Jackson said.

Time Warner, Comcast, Cox, and others are just now rolling out VOIP -- or «Digital Phone,» as they sometimes call it.

The Wall Street Journal says 20 million Americans may subscribe by decade’s end.

The cost includes the same flat rate to call next door, the next town or the next time zone.

Cable guy Rob Howard of Time Warner says $39.95 a month can give you unlimited local and long distance calls.

But there are downsides, and the phone company is happy to tell you about them.

Phone executive Ann Crable, of Cincinnati Bell, said the phone company can now «bundle» your cell phone and home phone into one simple discounted plan. Cable can’t do that, Matarese said.

«We strongly encourage customers to keep a land line for safety reasons,» Crable said.

The reason is that If your power goes out, your cable phone goes out too.

«In fact, during a power outage, VOIP service does not work. So you would not be able to call 911 if you had a problem,» Crable said.

Also, with some cable phone systems, 911 operators may not be able to locate you. Though Time Warner’s system does not have that problem.

The cost alone sold Jackson.

You may not be able to get cable phone yet in your neighborhood, but it could be coming next year.

If it’s an option, learn the benefits and drawbacks before you sign up. And see what the phone company will offer to keep you.

That way you don’t waste your money.

Copyright 2004 by NewsNet5. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

There’s a pretty long list of resettlement tasks when you move to a new community. You need new auto tags and a new driver’s license. You have to register to vote, get your utilities hooked up, put the kids in school.

But getting a new cell phone number may be one you can forget about for awhile. Many newcomers are finding they’re perfectly OK keeping the cell phone number they had back home, foreign area code and all.

You could guess that interstate migration is jump-starting a trend that wireless industry prognosticators have been foreseeing for years: the lifelong telephone number.

When Andrew Foster moved here from South Bend, Ind., to take a teaching job at Santaluces High School in Lantana, getting a new, Florida-based cell phone number was high on his to-do list. Thing is, he was in the moving process, meeting people and making new connections but still trying to stay in touch with folks back home who had his cell number saved to speed dial. «Before I knew it, I was giving out this cell phone number,» Foster said. «It got to be too late to change.»

There seemed to be no pressing reason to change. Increasingly, cell phone calling plans make no distinction between local and long distance. Customers in many U. S. markets are already accustomed to dialing 10 or 11 digits for all of their calls. On the other hand, changing your cell phone number usually calls for a tedious e-mail and phone call campaign to make sure everybody gets the news.

«I guess generally it’s been working OK,» Foster said. «I haven’t heard of anybody not calling me because of long distance or the area code thing.»

There can be downsides to hanging on to an out-of-state cell phone number. If you don’t have a nationwide calling plan (or a statewide plan if you’re moving from elsewhere in Florida), long distance and roaming charges will quickly overcome any perceived benefits.

Some cell phones get disoriented when they move to South Florida because they’re not programmed with the local system’s pattern of transmission towers. Verizon phones, for instance, must periodically have their «preferred roaming list» updated to make the best use of the local network.

And you may become an expensive habit to people who still rely on hard-wired land lines.

«If the majority of your calls are coming from other cell phones and long distance is included, it may not be an issue,» said Chuck Hamby, a spokesman for Verizon Wireless. «But, having said that, places like your child’s school or doctor’s office don’t use cell phones and they’ll get a bill for calling you.»

Though Hamby says cell phone migration «is not an issue for the wireless industry,» it may be a snapshot of the evolving relationship between people and their telephones and a platform for guesses about the telephone’s future.

The process of moving to a new community seems to emphasize the value of the cell phone as an all-weather, all-location primary communication device. Land-line phones, with that wire tether and the billing meter that starts every time you dial «1,» look much less attractive.

«We have [a land line] for dial-up,» connection to the Internet, says Foster. «We don’t give that number out.»

He may already have the last phone number he’ll ever need.

Rick Stone

Julia Peppiatt
Princetonian Staff Writer

The surge of cell phone use around the world over the past few years has not bypassed the University community. The multitude of rings, beeps and message alerts that greet the ear when walking across campus indicate the phenomenon has pierced the orange bubble.

«I don’t know how to work my room phone,» Bradford Stevens ’08 said. «At the moment it’s flashing — I don’t know if that’s a good sign.»

Many students agree. Due to the increasing availability and convenience of cell phones, they rarely find an occasion to use their room phones.

Frank Ferrara, telecommunications department manager, said anecdotal evidence confirms the trend.

«Room phone bills have been going down over the last couple of years,» he said. «There are no hard estimates because we have no surveys out there, but [the decrease] is significant.»

Connor Cobean ’08 said he did not have a cell phone when he arrived on campus in the fall. However, his parents purchased one for him a few days later in order to cut down on long distance calling expenses.

«To stay in contact with people on campus you really need to have one,» Cobean said. «The people I know that don’t have one are hard to get together with.»

«I haven’t used my room phone once,» he added.

Erica Hsu ’05 said she also got a cell phone recently. Her parents decided to buy a family plan in order to stay in touch more easily.

Hsu admitted she has found using a cell phone much more convenient than her room phone.

«Sometimes I forget to check my voicemail and messages will stay on [my room phone] for days,» she said. «But with a cell phone, it goes around with you everywhere and it usually has a little light or beep to let you know when there’s a voicemail.»

Cell phone connect

Ferrara said the Telecommunications Office recognizes the convenience of cell phones and has tried to accommodate their increasing use on campus.

The office recently implemented a new system called Cell Phone Connect that allows room phone voicemail to be forwarded to a student’s mobile phone for $4 per month.

«We believe that if the students would rather use a cell phone for mobility, that’s fine,» Ferrara said. «[Cell Phone Connect] is a feature that we offer because we recognize the fact that many students come to campus with a cell phone.»

Many students still complain about poor cell phone service on campus, especially in their rooms and in Frist Campus Center.

«I live in the basement. I get zero phone calls,» Will Byrd ’08 said. «It’s probably because no one’s calling me, but I like to think they’re trying.»

Ferrara said several cell phone companies have not yet established good cell phone service in Princeton.

«Depending on which cell phone vendor students use, coverage may not be good on campus,» he said. «We’re working on making [service] better, but the vendors themselves need to partake in that.»

Resisting the trend

Despite the vast increase in cell phone use over the past few years, a small group of students refuses to follow the crowd. They give a variety of reasons for resisting the cell phone trend.

For some students, it is a matter of finance.

«If I were to get one I’d have to pay for it and I choose not to spend my money on that,» said Jerry Moxley ’08, a ’Prince’ Street writer.

And while Victor Amin ’08 jokes that his reason for not having a cell phone is «partly laziness,» he said using the University’s long distance phone service was cheaper for him.

Others have more philosophical reasons behind their choice.

«It’s antisocial. You can see six people walking across campus together, but not really together because they’re on cell phones,» Stephan McDaniel ’08 said. «There’s something so urgent and rude about that form of communication.»

But whatever their reasoning, most mobile-less students argue that although cell phones may be convenient, they are not essential.

They simply find other ways of communicating, such as AOL Instant Messenger.

«It’s very rare that I need one,» McDaniel said. «If you don’t have one, you have a different barometer of importance. My idea of an emergency is very different than other people’s.»

by Jill Waycaster
Special To the DM
November 16, 2004

Like a growing number of college students, Erin Smith didn’t have the phone company hook up her apartment’s phone landline when she came to college.

„I didn’t think there was a need to have a phone in my place because I just use my cell phone,“ said Smith, a junior political science major from Jackson. „I’m on a flat rate unlimited calling plan, so I don’t have to worry about going over my minutes and I always have my (cell) phone with me, so if someone needs me, they’d just call me on it.“

Smith is among millions of consumers who rely on their wireless phone as their primary phone. According to MRI Research, the number of wireless-only households has increased fourfold in the past three years, from 1.4 percent in spring 2001 to 5.5 percent in spring 2004.

Approximately 12 percent of wireless phone users are ages 18 to 24 and have disconnected their landline phone service and use wireless exclusively, according to a recent study from the Yankee Group. The trend is especially prevalent on college campuses, said Clinton Schove, market manager for Cellular South.

„Many clients are using wireless phones as their primary source of communication,“ Schove said.

„We’ve really seen the trend in the Oxford and Ole Miss area,“ he said. „One of the most attractive aspects of going wireless is that your phone number is no longer tied to a location. Instead, your number goes with you wherever you go, so you can be as reachable as you choose to be. For college students who are always on the go, this is a real benefit.“

Anna Reeves, a junior international studies major from Madison, who uses AT&T Wireless services, said she feels her cell phone offers many features and enjoys the mobility of her phone as she uses it frequently on her way to class.

„The time crunch in today’s society forces you to multi-task and the only way to do it is with a wireless phone,“ Reeves said. „It gives me access to anywhere, anytime communication.“

Allen Crain, a senior broadcast journalism major from Holly Springs, said using his wireless phone is much more convenient than relying on a landline.

„I use my wireless phone for everything,“ said Crain, a Cingular Wireless costumer. „I have text messaging and online gaming. You can’t do that stuff with your home phone.“

A study from Cahners In-Stat/MDR predicts nearly one-third of all U.S. wireless subscribers will not have residential landline service by 2008.

A study conducted by The Yankee Group attributes the decline of landlines in 2001 to the growing number of customers turning to e-mail and non-dialup Internet access, reducing the need for phone lines for fax machines and Internet connections.

According to a study from www.letstalk.com, there are three primary reasons the number of wireless-only households has increased fourfold since 2001.

A study by JD Powers found that cell phone prices have fallen 80 percent in the last eight years. The Bureau of Labor Statistics’ wireless price index shows a 30 percent decrease in cellular telephone services since 1997. BLS also found a steady increase in local phone charges and minor decreases in toll and long distance rates during the same period.

An abundance of evening, weekend, local and long distance minutes are often offered to wireless consumers at little to no additional cost. Also, special features that cost extra on landline phones – such as call waiting or caller ID – are often standard with wireless phones, the Web site said.

Wireless networks continue to improve geographic coverage with continued upgrades and build-outs, according to letstalk.com.

By Stephen Lawson
Network infrastructure maker UTStarCom Inc. says it has figured out a way to keep local cell phone calls local -- even over enterprise LANs. The Alameda, California, company announced on Monday a set of products that bypass the traditional long-distance wired circuits used as backhaul for traditional cellular networks. Instead, it will let them go over IP (Internet protocol) data connections. The technology allows carriers to bring service to remote, unserved communities and allows enterprises to use the «free» bandwidth on their LANs for calls within a campus, according to Jack Mar, president of UTStarCom’s CDMA (Code Division Multiple Access) division.

The MovingMedia 2000 product line makes up an infrastructure in which calls travel directly from the base station onto an IP packet network. That gets the mobile operator’s call traffic off the expensive long-distance leased lines they use today between cities and lets the operator consolidate network elements. The result for the operator can be vastly lower operating expenses, according to Mar.

Current cell phone networks switch calls at an MSC (mobile switching center) that may be hundreds of miles from some of the communities it serves. After reaching a local base station, the calls get to the MSC over expensive leased lines on a traditional circuit-switched phone network.

MovingMedia 2000 replaces that MSC with an MSC Server that does not switch the call but only handles management functions such as caller identification and call setup. After a brief setup process, the call travels over IP data connections between base stations, eliminating most of the cost of long-distance dedicated circuits, Mar said.

The new infrastructure also can offer benefits to mobile carriers’ enterprise customers, he said.

Using IP phones, enterprises today can make voice calls over building and campus data networks they already own. However, mobile phone calls from one end of a campus to the other generally still go over a service provider’s network and show up on a bill. An alternative just beginning to emerge is the use of dual-mode Wi-Fi and cell phones with an automatic handoff from cell network to LAN when an employee comes into the office. UTStarcom’s system could offer a simpler solution, Mar said. Subscribers’ existing CDMA phones will work with MovingMedia 2000, according to the company.

At an enterprise, the mobile operator could set up picocells -- cells about the size of a notebook computer, designed for coverage over a small area -- in the building or campus. The enterprise LAN would provide the IP connectivity between them, Mar said. The network could also be connected to a local server with an enterprise directory so employees could take advantage of enterprise phone features such as office extensions. While the enterprise would benefit from greater ease of use and lower bills, the mobile operator could cut its own costs and gain the business customer’s loyalty.

The idea has implications for other users as well.

«Operators can now afford to run operations where they could not afford to before because of backhaul charges … (In) a lot of communities where there is not coverage today, they could put in coverage,» Mar said. In addition, the MovingMedia system bypasses a conversion of voice traffic between the CDMA and circuit-switched phone networks that can cause delays and degrade sound quality, Mar said. In addition, because the system can use any kind of IP data connection to carry voice calls, it could be applied to cell phone service on airliners, using a satellite data connection, he added.

Also Monday, UTStarCom will announce deals with operators in Bangladesh and Angola to deploy MovingMedia2000.

The product line to be introduced Monday, called MovingMedia 2000, is designed only for CDMA and CDMA 2000, but UTStarcom could make a similar system for GSM (Global System for Mobile communications) networks, Mar said.

The MovingMedia lineup, which includes radio access, core voice network and core data network equipment for 450MHz, 800MHz and 1900MHz CDMA and CDMA 2000 networks, is set to ship by the end of 2004.

Imagine you need a lamp. You go to the store, choose a lamp you like and can afford. You don’t need to figure out which electric company to use or understand different electric technologies. And nobody would make you sign a contract or guess how many minutes a month you’d use your lamp.

But that’s exactly what happens when you buy a cellular phone.

I just bought a new cell phone and switched providers, and I’m determined to save you some of the frustration I felt. Can you tell me the difference between CDMA, TDMA or GSM -- and why I should care? How about dual-mode, tri-mode, tri-band or quad-something?

So here’s a seven-step guide to the cell phone-buying process:

1. Decide whether to stick with your current service provider. You can now take your phone number with you if you switch, so you’re no longer held captive.

2. Choose a provider. The most important consideration is the quality of reception where you live and travel. Don’t depend on national ratings, since reception varies significantly from one location to another. Ask people what they think about their phone service locally.

3. Determine the technology you need. I’ll make it easy: the only thing to consider is where you’ll use your phone.

If you live in a major city, you’ll only need digital service -- don’t worry about the particular type (e.g. CDMA, TDMA, iDEN).

In a smaller city or rural area, you’ll probably want a phone that gets the older analog service too, so look for «dual-mode.»

National: If you travel only to big cities, go digital. If, like me, you regularly visit smaller cities and rural areas, get dual-mode service. Since some providers are phasing out their analog service, ask for a dual mode phone and rate plan, as it’s unlikely to be offered to you.

International: If you travel to Europe, you’ll want GSM service and a GSM phone. GSM is not offered by all providers and coverage within the United States is still being rolled-out, so determine how important this is to you.

4. Find a phone: Go to the wireless store and look at the phones that operate on the technology you need (see step two).

The two most important considerations are the interface (screen and keys) and price. Those are very personal considerations, so pick up the phones and see how you like each one.

Phones now have all kinds of capabilities: cameras, Web browsing, text messaging. Will you actually use these? Remember, these services are still in their infancy, so the quality is not great.

5. Get the brochures and read the fine print. For example, «No long-distance charges» may mean no charges for incoming long-distance calls or only in your home area. Free mobile-to-mobile calls may refer only to calls from someone in your network or in your town.

6. Call the service provider. You’ll get more accurate information, more plans and better rebates by calling the company directly. Ask about plans that aren’t in the brochures. And get the name of the person you’re speaking to and write everything down.

7. Choose your plan. Determine the number of minutes you’re likely to use per month. It’s generally cheaper to buy a little on the high side rather than spend the exorbitant charges for extra minutes. Hint: You can always call and renegotiate your plan. Ask for an instant credit on your account instead of (or in addition to) a rebate on a phone purchase.

For more information, check out Let’s Talk (www.letstalk.com) or the very good guide from PC World magazine (www.pcworld .com).

Rhonda Abrams is author of The Successful Business Plan and The Successful Business Organizer.

By Michael J. Martinez
Associated Press

• I’m thinking of canceling my land-line phone service and using my cell phone as my only phone. How do I go about it? Are there any drawbacks?

• An increasing number of cellular phone customers are dropping traditional phone service and relying on cell phones alone. According to the technology think tank Gartner Inc., up to 10 percent of the nation’s 170 million cell phone customers have given up their land lines.

The savings, of course, can vary from person to person, from $20 for basic phone customers to up to $100 or more for people who use a great deal of long distance.

Dumping your land line is pretty easy — just call the phone company and cancel your service. But before you cancel, you should review your last land-line phone statement to see how many minutes of local and long-distance calls you used, and then make sure you have enough minutes in your wireless plan to cover the added usage.

«You may find that the savings really doesn’t exist if you have to substantially upgrade your wireless plan,» said Tole Hart, senior research analyst at Gartner. «In that case, you’re simply opting for more portability, not necessarily for savings.»

Most cell phone-only customers tend to be young, Hart said, and most are single. Families find it more difficult to move to a cell-only lifestyle, as a land-line phone is often the central point of communication for everyone in the household. Family cell plans can alleviate this to a certain degree, but then the savings from not having a land line are truly buried in the costs of multiple cell phones and a high amount of usage.

While the economics may not work in all cases, the portability and ease of use does, since the chance of missing important phone calls decreases considerably, no matter where you are.

However, there are certainly drawbacks to forgoing your land-line phone.

According to a Gartner survey of 294 cellular customers who had not canceled their traditional phone service, 27 percent said poor quality of cell service kept them from making the change, while 21 percent cited costs. Another 5 percent said they would pass because couldn’t switch their fixed-line phone number to their cellular service.

By ELIZABETH LEIS, Staff Writer

Until August, Rick Jones hardly glanced at the 40-plus pages of his Sprint cell phone bill, and just paid the $300 monthly bill.

That’s when the Brooklyn Park resident discovered his ZIP code — 21225 — meant Sprint PCS thought he was living in Baltimore and was tacking on the city’s phone tax of $3.50.

The wireless carrier credited his account on the next bill, but before long, Mr. Jones, an electrician, had switched to Verizon. But he’s not any happier.

«There are all kinds of fees,» he said. «It seems like they put it in there to confuse everybody.»

He’s one of many county cell phone users who say their monthly bill, with its lists of mysterious charges, federal regulatory fees and sales taxes is too hard to decipher.

Maryland Assistant Attorney General Scott Bailey said that in the past year, the state’s Attorney General’s Office has received 463 complaints regarding cell phones. Most were regarding billing disputes.

In July, 35 states including Maryland reached a settlement agreement with Cingular, Verizon and Sprint that requires the companies to list all fees, not just the base price.

«There are very many fees that we’re talking about,» Mr. Bailey said. «There’s a cancellation fee, there’s an activation fee, there are fees that are assessed by the government and by the carriers themselves — that they call ’cost recovery’ because of government mandates.»

The latest one, the «number portability fee,» is designed to allow customers to keep their phone number when switching carriers, and to keep companies from running out of numbers.

Sprint and Verizon charge 40 cents to recoup their costs, while Cingular groups the cost of number portability under the
«federal regulatory cost recovery fee,» which is $1.05.

Then there’s the «federal excise tax,» which Congress mandated to pay for the Spanish-American War.

With 170 million cell phone customers nationwide, one can assume the government has recouped the cost of the 1898 endeavor. Since 1992, revenues from this tax on talking goes right to the Internal Revenue Service.

And more charges

Or take the Universal Connectivity Fee. Congress mandates that all long-distance providers must contribute to the fund, which is supposed to make telecommunications service like phone and Internet lines available to all.

But how much the company chooses to pass on to the customer varies.

«It’s up to the carrier what charges it accesses to customers,» Verizon spokesman John Johnson said. «Part of that is that it’s a function of the cost and what the carrier incurs — how efficient can the carrier be for local number portability, and so on.»

Another listing on bills are the county, state and federal 911 charges — they each have their own- which is helping to pay for new systems to pinpoint the location of wireless callers.

Some states allow the money to go into a general fund not necessarily used for 911 services, said Erin McGee, a Cellular Telecommunications and Internet Association spokesman.

«Most people don’t understand the additional fees — how a $39.99 plan turns into a bill of $50,» she said. «Like the E911 fee — states and cities and counties are collecting it to pay for upgrades to their 911 centers, but it’s sometimes being diverted to pay for everything and anything.»

She said Maryland ranks 34th in the nation in wireless tax percentage, paying an average of 12.55 percent of their bill in taxes.

Mr. Johnson said he sees a trend toward increasing state and local cell phone taxes on bills as «disturbing to the wireless industries and should be to customers as well.»

When County Executive Janet S. Owens proposed a 5 percent tax on cell phones in January, however, the plan received little support from state legislators who would have had to pass it.

Assuming some taxes and fees are standard on each wireless bill, customers should still be aware of lurking charges.

Some customers may be surprised to see a general category for «additional usage charges,» which could include roaming minutes or using specific services like dialing 411. Other companies may charge for downloading extras like ringtones.

Mark Luckner of Annapolis said he occasionally looks at his bill, which he thinks is supposed to be about $75 a month, but has been as high as $300.

«Every once in a while I go over (the bill),» he said. «If I had more time, I think I could get a better deal.»

Mr. Lunkner is thinking of switching to a family plan. But people who have those might be even less likely to look for hidden charges.

Aschley Cone, a St. John’s College sophomore, said though she’s had a cell phone for six years through Sprint, she has rarely looked at the bill — probably because her parents pick up the tab.

«Definitely, if it was coming out of my bank account I would pay more attention,» she said.

Boulder — Will Kuntzelmann hunches over a homework assignment at the University of Colorado law library, his laptop and cellphone within easy reach.

A business major, the 19-year-old Kuntzelmann uses a wireless connection on his laptop to surf the Internet for information on the genetic modification of food. He breaks to take a cellphone call.

Kuntzelmann, who lives with three roommates and no wire-line phone, could be a poster boy for a wireless generation.

«I don’t know anyone who has a wire line,» he said.

Men and women between the ages of 18 and 24 are driving the trend toward wireless. They make up more than one-third of the people who use cellphones as their primary phones, according to a survey by In-Stat/MDR, which provides research on the wireless industry.

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This tectonic shift in telephone service — by 2008 an estimated one-third of existing phone customers won’t have land lines in their homes — threatens the customer base and future profitability of regional phone companies, especially Denver-based Qwest, which doesn’t have its own wireless division.

In the year ended June 30, Qwest lost more than 900,000 wire lines across its 14-state territory.

A youth movement

Mobility, cheap rates, increasingly trouble-free technology and the ability to keep a telephone number even after switching phone companies have contributed to consumers’ decision to give up wire-line service, said Erin McGee, a spokeswoman for the Cellular Telecommunications & Internet Association in Washington, D.C.

University of Colorado law student Zachary Lange, 27, moved from Portland, Ore., to a one-bedroom apartment in Boulder two years ago and never thought of getting a wire-line telephone.

With his $39-per-month cellular plan, he gets services such as voice mail and caller ID that would cost extra on a traditional phone plan, along with free long-distance and free weekend calling.

For young people weaned on video games, Internet chat rooms and text messaging, the wire line can seem as quaint and unnecessary as a record turntable.

Campuses like CU-Boulder are thick with buildings that are wireless «hot spots,» where students can connect their laptops to the Internet without being tethered to a phone line.

At home, Kuntzelmann and his roommates use a wireless router connected to a cable modem to access the Internet on their laptops. With wireless technology, they can work throughout their two-story house, or in the backyard, without restraint.

«This generation is growing up with wireless,» said Phil Weiser, associate professor of law and telecommunications at CU in Boulder.

Universities aren’t the only venues where wireless rules. Coffee shops, airports, hotels and other places are catering to a wireless clientele.

The switch to wireless is expected to morph into a cross-generational phenomenon as the market matures and carriers lower prices and improve service, according to the In-Stat/MDR study. In a growing number of circles, wire-line users are becoming an endangered species.

«It does surprise me that some people have a land line. It is an extra cost that you don’t need,» said Keith Baltus, 31, vice president of strategic development at Spire Media.

With his cellphone and laptop, Baltus is a business road warrior. His phone is stuffed with the numbers he dials most frequently, making it a virtual Rolodex. The laptop is equipped with a wireless modem card that allows him to send and receive e-mail at airports and coffee shops that are equipped with «Wi-Fi» — or wireless-fidelity — technology.

Baltus got rid of his wire-line connection four years ago after buying a new house. «I wasn’t home that much, and I was paying for both (wire line and wireless),» he said.

Qwest at a disadvantage

Qwest lost 921,000 residential-phone lines, an 8.8 percent drop, for the year ended June 30, as customers cut back the number of land lines running into their homes and moved to wireless, cable or competing wire-line phone companies. Qwest also lost 287 business lines during that time.

Other large regional telephone providers such as SBC, BellSouth and Verizon lost wire lines during that period for the same reasons. But those companies have wireless businesses that can recapture customers. Qwest, which acquired Baby Bell US West in 2000, doesn’t have that safety net

US West’s wireless division provided service only within its 14-state region. Qwest decided that a regional presence wasn’t enough to compete in the market and spun off its wireless assets, which were later sold.

Today, the original US West network is part of Verizon’s national system, and Qwest resells Sprint’s service.

One analyst said Qwest’s lack of a wireless division assures that the company will eventually be sold or continue to operate with a stock price far lower than those of its peers.

«It is like the Roach Motel; there is no way out right now,» said Tom Friedberg, a Denver-based telecommunications consultant.

Qwest chief executive Dick Notebaert told The Denver Post in July that such losses won’t deal the company a death blow, but they will force it to change.

«By definition, some percentage of customers are going to opt for a different choice because of portability, mobility, price. So what you have to do is retool to be highly competitive and nimble,» Notebaert said.

To stay competitive, Qwest offers several other services: Internet telephone, long-distance and «naked DSL,» which is a high-speed phone line sold without telephone service.

But Scott Cleland, chief executive of the market-research firm the Precursor Group, said such services are unlikely to make up for the line losses.

When a company loses a land-line customer, it is losing a high-margin asset, Cleland said. Telephone companies rely on large numbers of customers to defray the substantial cost of running their networks. As customers leave, the fixed costs are spread across a smaller customer base and the companies must depend on less profitable services like long-distance, he said.

Abandoning landlines doesn’t make sense for many — yet

SAN FRANCISCO (CBS.MW) -- In a few short decades, today’s children will tell their disbelieving kids that long, narrow cords once anchored telephones to outlets in the wall.

Traditional landline phones are facing a tandem attack from Internet calling services, or VoIP, and wireless phones -- both of which offer some distinct advantages to the standard handset-and-cradle. And a small but increasing number of Americans is making the leap to the cell-phone-only life. But there are plenty of reasons to stay anchored to the landline, at least for now, particularly for families with kids.

Among the concerns cited by consumers not yet ready to cut the cord: They need their phone line for Internet access, and they don’t feel comfortable relying solely on a cell given mobile-phones’ unreliable call quality, according to a Forrester Research report earlier this year.

But these barriers will soon fall. For each concern, there is «a dynamic going on in the market that in the next couple of years will change these people’s thinking,» said Charles Golvin, a principal analyst at Forrester Research.

For instance, as people migrate from dial-up to broadband, «’I need it for Internet access’ becomes less and less important,» he said.

Plus, «cell-phone service continues to improve. The carriers invest billions of dollars every year in their networks. Some of that is about new technology, but a lot of it is about improving service,» he said.

Mobile from the get-go

Already, these barriers are nonexistent for young adults: 46 percent of those who’ve abandoned landlines are 18 to 34 years old, according to Forrester.

Some «college kids may never have had a landline. At 14 or 15 their parents gave them a cell phone,» said Allan Keiter, president of MyRatePlan.com, a consumer price-comparison site.

As colleges increasingly switch from landlines to cell phones or VoIP service, students graduate not having used a landline in years. At that point, «why do I need to get a landline?» Keiter said. «The whole mindset is different. That’s where most of the growth comes from.»

Some 5.5 percent of U.S. households, or about 5.8 million households, now rely solely on cell phones, up from 1.4 percent in 2001, according to the results of 26,000 in-person interviews by Mediamark, a market research firm.

Show me a better plan

While those who’ve already cut their landlines are young and tend to earn about $34,300 on average, those who say they’re planning to do so in the future are older and wealthier.

Forty-five percent of those who plan to abandon their landlines are 35 years old to 45 years old and earn about $58,300 on average, according to Forrester Research.

They might be waiting for some improved cell-phone offerings before they make that move. For a family of four with multiple phones at home «it could get a lot more expensive to try to replicate that (landline service) with cell-phone service,» Keiter said, given that landline services offer unlimited calling for about $35 per month.

That doesn’t include long-distance, but that’s available for less than 3 cents a minute these days, with no added fees. On a cell-phone plan, «you’re paying for every minute both incoming and outgoing. You could blow through your bucket of minutes pretty quickly,» Keiter said.

To compare options, consumers must assess the minutes they spend on the phone. Many wireless carriers offer 1,000 «any time» minutes for $39.99 plus free long distance. As a general rule, if you’re hitting 1,000 minutes or more a month, a landline is likely cheaper, Keiter said.

That’s one reason wireless providers will soon offer, for instance, family plans that combine prepaid minutes with buckets of minutes, which may inspire more people to cut their landlines.

«One of the problems with family plans is ’I give Junior a cell phone and we’re sharing the same minutes and all my minutes are gone in three days,’» Golvin said.

If the kids’ phones are prepaid, they can’t make phone calls after their minutes are used up, except for permitted calls to, say, their parents’ numbers.

Another option for consumers to consider is VoIP. For instance, Vonage offers unlimited calling in the U.S. and Canada for $24.99. See full story comparing rates.

More than 12 million U.S. households could switch to VoIP by 2009, though the young Americans who are opting for wireless-only are unlikely to make the switch, according to a new study. See full story.

Not quite wireless yet

Those interested in snipping their wires should first consider the following:

Satellite TV, TiVo and DSL connections often require a telephone line. If you’re using one of those services, it might pay to stick to your regular phone plan. Or, consider scaling back to a bare-bones phone plan, available for about $15 a month, and make your telephone calls solely via wireless.

Some credit-card companies don’t allow applicants to use a mobile phone number as the primary phone number on the account. They insist on a landline number to activate the card, Golvin said, though this may change in the future.
Wireless service usually comes with free long-distance, an added incentive to switch, but remember it’s not free if you go over your minutes. «Long-distance on wireless is free, but you’re also using up air time,» Keiter said. Overage charges now average about 40 cents a minute, far higher than the long-distance rates of 2.75 cents a minute that Keiter offers on his site. «If you have a $39.99 (wireless) plan for 500 minutes and you end up talking 600 minutes, your bill just doubled.»

When your home-security alarm rings, the system uses a telephone line to dial out. Before you cut the cord, consider asking for the latest in home security: Wireless emergency signals. «ADT and Protection One are beginning to promote wireless replacements for the security infrastructure in the house, the part that dials out,» Golvin said. «They pitch it as a security upgrade because the nasty guy could come and snip your phone wire.»

While phone companies with a stake in wireless services, including Verizon, SBC and BellSouth, aren’t about to hawk the idea of ditching landlines, the trend towards a cell-phone-only life is helping to drive a surge in bundled packages, Golvin said. That means discounts to customers who buy everything or at least a few services -- local, long-distance, Internet access, satellite television and wireless phone service -- through one company. Consider researching what deals are available before dropping your landline.

No more «phoning home.» In a cell-phone-only world, everyone has a separate number. That can be a benefit or a drawback, depending on your lifestyle. Note: Companies may soon start offering services where one call will ring two cell phones at once, Golvin said, so the married couple awaiting word from the remodeler won’t miss the call.

While an enhanced 911 system is being addressed, currently emergency operators cannot determine your location if you dial 911 from your cell phone.