BY JOHN MORAN
THE HARTFORD COURANT

Own a telephone, someone once said, and you give 6 billion people the right to wake you up in the middle of the night. Fortunately, most can’t be bothered.

But even that possibility highlights what a stupid and unruly brute the traditional telephone is. Someone calls, the phone rings, and you are bound to answer it — or at least be interrupted by it.

Internet telephone service — otherwise known as voice over Internet protocol, or more simply VOIP — promises to change all that, offering consumers sweeping and sophisticated control over how the phone works at an affordable price.

Consider, for example, the VOIP service from BroadVoice, a subsidiary of Convergent Networks. For as little as $9.99 a month, it offers unlimited in-state calling and long-distance service at 3.9 cents a minute — not bad for people who make most of their calls locally.

Of course, to use BroadVoice, you must supply your own high-speed Internet connection — typically either a DSL or cable Internet hookup. Still, if you spend a lot each month on long-distance calling, the savings could be considerable.

But beyond the savings, a slew of call-management features makes using BroadVoice’s VOIP service a liberating, if somewhat complicated, experience.

First you get a raft of «basic» call features, which actually seem pretty sophisticated. These include call-forwarding, call-waiting, three-way calling, last-number redial, call hold, anonymous-call rejection and more.

My favorite is the Do-Not-Disturb feature, which lets you effectively take the phone «off the hook» when you don’t want to be bothered. Incoming calls are either sent directly to voice mail or get a busy signal.

Then there are more advanced features, like those on advanced cell phones. One lets you assign a distinctive ring to calls originating from certain numbers, so you can separate special callers, such as spouse and boss, from others.

Similarly, you can arrange to have certain callers forwarded while others are sent to voice mail.

In all, BroadVoice offers 22 basic and advanced call management features. If those aren’t enough, another handful of premium features, such as customized hold music and alternative phone numbers, are available for an extra fee.

None of this would be worth much if VOIP call quality were poor. But calls placed via the BroadVoice service were almost always as good as conventional phone service — and much better than most cell phone calls.

VOIP remains a fraction of the overall telephone universe at present. But once consumers get clued into the pricing and the features available, that could change quickly.

The Hartford Courant is a Tribune Co. newspaper.

Customers find a cheaper way to make their connections

By Matt Branaugh

SCRIPPS HOWARD NEWS SERVICE
BOULDER, Colo. -- In some ways, Alyson Canepa just might be a pioneering example of how people communicate with each other in this decade -- maybe even in the 21st century and beyond.

The Realtor from Longmont, Colo., already has used high-speed Internet access at home since 2002 to help her download pictures of houses for clients. This summer, she switched from traditional phone service to something that allows her to make and receive calls over her Internet connection for a much cheaper price.

The main benefit: all of the perks she enjoyed before. That includes voice-mail and caller identification and no long-distance tolls when she calls her daughter, who is living in Japan, or her rental properties in Northern Colorado.

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In the past, she says her monthly bill with Qwest Communications International, including taxes and fees, ran about $50 before she trimmed some features to take it down to $34. Then she came across Voice over Internet Protocol, or VoIP, and VoipNuke.com, a local reseller of 8x8 Inc.’s Packet8 product, which runs across Level 3 Communications Inc.’s ultra-fast global network.

Now she pays about $20 a month.

«It’s just so much easier. I cut my phone bill down to half,» says Canepa. «The quality of the calls is really good.»

VoIP takes the voice waves created on calls by people, breaks them up into tiny packets of digital data, shoots them across a network to their final destination and quickly reassembles them back into their original form.

Users are assigned a phone number from their local area, but because the calls travel over networks instead of traditional copper-wire phone lines, those users bypass any long-distance costs. They also can set up their computer or laptop from almost anywhere in the world, establish a network connection and conduct calls as though they were still inside their local area.

Right now, customers typically choose between installing a conversion box so calls still come and go through existing phone handsets on site, or they may pay for a new IP-based phone system.

VoIP users such as Canepa are growing in number. High-tech research firm Gartner Inc. estimates there will be 6 million of them in the United States by the end of next year.

Will Stofega, a senior analyst on VoIP services for IDC, another research firm, says the companies that provide hosting VoIP services, such as Qwest, SBC or those that resell Level 3’s network, will log $222 million in sales next year and $880 million in 2006. By 2008, IDC sees that market exploding to $7 billion.

One thing that’s prompting some businesses to make the shift, says Elizabeth Herrell, an analyst with Forrester Research, is that they’re already looking to replace an aging phone system. Companies that aren’t in that position, though, likely won’t entertain the thought of VoIP until a major upgrade or repair unfolds.

Demand from residential consumers will lag in the early going, too, analysts say. High-speed access must continue to penetrate neighborhoods nation While residential demand warms up, increasing demand from businesses is something Rockynet Inc. has witnessed. In 2000, the company began offering VoIP services to businesses, says President Paul Mako. Now, 80 percent of the 13-employee company’s sales come from the technology.

Industry observers say AT&T, Level 3 and Qwest are among those well-positioned to benefit from VoIP. The main reason: they own their networks.

«The Internet gods have finally smiled on (Level 3),» says Om Malik, a senior writer for Business 2.0 magazine who says he’s been a skeptic of the company in the past.

«This has even surpassed my expectations, how quickly they have become such a dominant force in the Voice over Internet business.»

Early attempts with Internet phone calls by various companies enjoyed limited success. Few people possessed the high-speed access needed to make VoIP work. And the networks used were considered the «public Internet,» built from lines provided by multiple carriers that gave access to everyone.

The problem was that the public Internet didn’t place a priority on voice transmissions over data ones, so the digital packets from a call could easily get jumbled.

Today, high-speed access continues to grow. And since Level 3, AT&T and Qwest own their networks, they can place a priority status on voice transmissions and guarantee their quality. That separates them from current competitive options on the market that still use the public Internet, such as the well-known Vonage, says Andy Abramson, who hosts a daily technology show sponsored by Microsoft.

The promise of VoIP certainly looms large. Still, some questions linger.

How will the federal government, as well as state governments, regulate VoIP? Will the feds treat it as a traditional phone service, which will subject it to universal access fees, electronic 911 requirements, state taxes and other rules placed on existing phone companies? Or, because of its unique use of data networks, will it be classified as an information service, leaving it insulated from much regulation?

For Canepa, the real estate agent, she says she sees it taking a while before people warm up to the idea. But once they do, she says she thinks they’ll sign on the way she did.

«People are very hesitant to disconnect from Ma Bell because they’re so used to using the same thing,» she says. «When people see the value there and the quality, I think it will catch on. It’s just a matter of getting people to know about it.»

By Adrian McCoy, Pittsburgh Post-Gazette

Cell phones have morphed into mini-computers, with e-mail and Web access, and still and video cameras. And broadband Internet connections have evolved into alternative telephones. The result: It’s easier -- and less expensive -- for people to talk face to face, wherever they might be.

Gaoying Bolinger of Wexford talks to friends she hasn’t seen in years almost daily now. Some are college friends or people she grew up with in China who are now scattered across three continents. Using Yahoo’s and MSN’s instant messaging services, the group can chat online, with or without video images, which can be grainy and jumpy. But making eye contact across the globe is, like the MasterCard commercial says, priceless.

The instant message service is free. The only investment needed is a Web cam and a high-speed Internet connection.

Last weekend, Bolinger was online with friends as far away as China and Germany -- and as close as Monroeville.

«It’s like a coffee club,» says Xuping Cao, who lives in Hangzhou, China. «It saves a lot of money, and we can see people. It’s like talking in the same room,»

«The Internet makes the world so small and so nice,» Bolinger says. «It makes me less homesick in a way. And more homesick in a way, too.»

The group cites the convenience of being able to reach people quickly -- without playing high-priced long-distance phone tag -- and knowing when friends are online.

Hesheng Bao and Katherine Chen of Monroeville are part of the same online group. They also use instant messaging in their business -- Harvard eSolutions, a company that sells items for people at online auction services such as eBay, as well as travel packages and imported Chinese arts and crafts. The company can buy and sell quickly, with photos or videos of items zapped into their computer.

Instant messaging «can’t replace the old-fashioned way of doing business,» Bao says. «The technology isn’t perfect.» But it is a useful tool that has enabled the home-based business to function more efficiently.

Phone, um, modem home

In the digital era, talk is cheap -- and getting cheaper every day. Some people have opted to cut Ma Bell’s umbilical cord altogether and make their cell phones their only phones. Others are circumventing traditional land-line phone companies with several Internet phone services that have sprung up in recent years.

As more and more people convert to cable or DSL Internet access -- the FCC estimates around 25 percent of all U.S. households now have high-speed connections -- these alternatives are becoming more mainstream.

For several years, computer users have been able to make local and long-distance calls for a fraction of the cost. Heavy long-distance users, especially those who make a lot of overseas calls, see their phone bills drop from triple to double digits.

Businesses also are finding Internet phone service a way to save money on long-distance toll calls. Phone systems can be quickly changed, without hiring an outside contractor to add lines or rearrange wiring.

Internet phone service works by encoding the voice into data, which is sent over the Internet like an e-mail and converted back to sound.

There are disadvantages. The sound quality of Internet phone service is not always good, and there can be a lag between speaking and hearing. If there’s a power failure, or the Internet connections are down, you don’t have phone service.

And Internet phones are not part of the 911 system yet, and although calls can be made to 911 centers, the system doesn’t recognize the street location the call is placed from.

Once used mostly by the computer savvy, Internet phones are entering the mainstream. Major phone providers are adding the option for customers. The service works using the home’s existing telephones, along with an adapter and cable or DSL modems.

Last month, Verizon debuted its VoiceWing broadband phone service plan at an introductory rate of $29.95 a month. It comes with popular features such as caller ID and call forwarding, as well as voice mail. The international rates are low -- 3 cents a minute to Canada and 4 cents to the United Kingdom.

AT&T launched CallVantage earlier this year. The customer gets unlimited local and long-distance calling for $34.99 a month (with an introductory rate of $19.99 for the first three months), plus discounts for international calls.

Local cable service provider Comcast doesn’t offer Internet calling yet. The company is conducting Voice Over IP (VoIP) trials in several markets and plans to introduce the service in about half of its territory by the end of the year, with 95 percent coverage by 2005, says Comcast spokesman Brian Jeter.

«We’re taking a strategic approach. We’ll offer a unique package of voice, data and video services,» he says.

Comcast currently offers two digital calling plans, which don’t require a high-speed connection: Comcast Connections Any Distance, with unlimited local and long-distance calling in the United States, Puerto Rico, Guam and the Virgin Islands, at $39.99 a month for the first six months, and the Complete Value Package, unlimited local calls with 5 cents a minute for long distance ($24.99 a month, with a 12-month contract).

The large companies have plenty of competition from smaller Internet phone service providers such as Vonage, a popular broadband phone service. Subscribers pay $29.99 for unlimited local and long-distance phone service in the United States and Canada. For an extra $9.99 a month, they can turn their PC or laptop into a phone, with 500 local and long-distance minutes included, by downloading Vonage’s SoftPhone program.

Lingo offers unlimited calling to the United States, Canada and western Europe for $19.95 a month, and a 500-minute-a-month plan for $14.95. Both include caller ID, call waiting, voice mail and other extras. Dialpad is a PC-to-phone service that offers international rates starting at 1.7 cents per minute.

There are free services, such as Free World Dialup, whose subscribers can call anywhere in the world at no charge, although they can call only other Internet phone users.

Picture this

Cell phone technology is also bringing people closer together with visual images. The picture phone continues to evolve with several newer models capable of recording and sending short videos, which can be viewed on another video phone or a computer.

While it seems as if younger generations would be more likely to embrace these new technologies, in the case of the video phone, there is a multi-generational appeal.

«It’s a gadget. The gadget crowd comes in all ages,» says Mike Kijowki, senior manager at Radio Shack’s Baum Boulevard outlet, where he says video phones are selling well.

Already customers are finding ways to use these mini-video recorders, he says. Grandma and grandpa live 2,000 miles away, but they’re able to watch a grandchild’s first steps or words almost as they happen. A real estate agent can zap images of a house to a prospective buyer. A motorist involved in a fender bender can make an instant video of the damage for the insurance claim.

As with every technological step forward, there’s a step back. Some people find the idea of being videotaped and transmitted to an unseen audience invasive. And there are already criminal applications, such as recording credit card numbers or videotaping someone’s PIN while he or she is at an ATM.

There are drawbacks to the new technology, too. The videos are limited to a few seconds in length. The picture is often jumpy and the resolution isn’t high. Shooting videos can sap the phone’s battery quickly.

Still, there are several models to choose from, with more on the way.

The Nokia 6600 (list price $429) shoots 10-second clips. Other bells and whistles include still photo camera, speakerphone, RealOne Media Player, Web browser and e-mail. Users like its large screen and good resolution. An almost universal complaint posted in online customer reviews was how quickly battery power is drained and that sending video is a slow process.

The Samsung VM-A680 PCS Video Mail phone ($309.99 list price) can record 15 seconds of video and has a built-in digital camera for still photos. Videos can also be used as a screensaver.

The next generation is waiting in the wings. Motorola is introducing the RAZR V3 -- a sleek high-tech mobile phone made with aircraft-grade aluminum that has video playback and Web capabilities, high-resolution screen and digital camera.

There are also home use video phones on the market, ranging from $149 to $249 at Best Buy. The D-Link Express Fast Ethernet Broadband i2eye VideoPhone ($149) turns a TV set into a broadband video telephone, without a computer. The user can send and receive video at 30 frames per second.

Never have we had so many options when making a phone call.

FCC’s hearings to have huge implications for telecommunications

Riddle: When is a phone call not a phone call?
Answer: When it travels over the Internet.

That, at least, is what a new crop of voice-over-Internet protocol (VOIP) providers will argue Monday before the Federal Communications Commission at what could be a watershed forum.

The hearing kicks off a months-long proceeding in which the FCC is expected to decide what, if any, rules and fees should apply to phone calls over the Internet or Internet protocol networks. The debate has huge implications for the rapidly shifting telecommunications industry. VOIP calls -- which now can be made with regular phones -- are expected to gradually supplant traditional voice calling over the next 20 years.

But state regulators and some local phone companies say these upstarts are getting a free ride by dodging regulatory burdens, such as taxes, universal service fees to subsidize rural phone service, access fees to local phone companies to deliver calls and 911 emergency calling requirements.

«If it’s functionally equivalent to existing services, there’s no policy reason to treat it differently,» says James Ramsay, general counsel for the National Association of Regulatory Utility Commissioners.

VOIP companies say they aren’t providing phone calls in the traditional sense but voice applications via the Internet. The U. S. government has not regulated the Internet for fear of squashing new technology.

«Whether it’s Web surfing, sending e-mail or talking, why should it matter?» says Jeff Pulver, founder of VOIP startup Vonage. «If the incentives aren’t there for people to be innovative, we’ll see a retreating of companies like Vonage.»

FCC Chairman Michael Powell, a free-market advocate, is strongly signaling that he’s inclined to agree, though certain rules may apply to VOIP providers.

"I think the burden should be placed on why you need a regulation as opposed to just, ’Let’s treat these small entrepreneurs like big, hairy telephone companies,’ " Powell said in an interview, adding that he and other commissioners have made no decision. Analysts say the FCC will likely rule that VOIP is an «information service,» rather than a «telecommunications service,» and thus subject to fewer rules.

Vonage, Packet8 and other VOIP providers have snared 135,000 home phone customers. As cable operators enter the business, that is expected to swell to 4 million by 2007, says researcher In-Stat/MDR. An additional million make IP calls via PCs or phone cards.

Standard phone networks link the parties for the entire conversation. Net-based calls are broken into digital data packets to cross the Web. A «gateway» reassembles the packets into voice and hands it off to a standard phone company to complete the call. That lets Vonage charge $40 for unlimited calls and, like other data services, avoid regulation.

So far, most regulatory battles have been in states. About 15, including New York and California, want to impose rules that could force VOIP providers to mail paper bills, give ample notice before cutting off service, pay state taxes and intrastate access charges, and provide Enhanced 911 service that locates emergency callers. In October, though, a federal judge denied Minnesota’s attempt to regulate Vonage.

Ramsay says 911 and proper notice before cutting off service «is what the public expects from a phone service.»

While Vonage provides makeshift Enhanced 911, it says it can’t fully comply because local phone companies will not let it connect to their systems. And it says its customers know it is not traditional phone service.

«We’re concerned about 50 states forming a patchwork of regulations,» says Vonage CFO John Rego. Because calls travel over the Net, he says, they should be considered interstate calls and overseen by the FCC only. The FCC is expected to agree, officials say, and pre-empt the states from regulation.

Whether the agency imposes federal rules is thornier. The Bells are not calling for regulation, partly because they plan also to offer VOIP. But they say VOIP providers should pay them interstate access fees -- about a half-cent a minute -- to complete calls on their networks, just as long-distance companies do.

Vonage typically pays the Bells or Bell rivals sharply reduced fees to carry data traffic at the other end of a call. Some of its calls are handed to long-distance companies, which pay traditional access fees.

Similarly, AT&T has started carrying some long-distance calls over Internetlike VOIP networks and paying cut-rate fees to connect at the other end. In this case, the customer has no idea VOIP is involved.

«They’re basically using our network the same way» as standard services do, David Young, Verizon’s technology policy director says of both AT&T and Vonage. Letting them dodge access fees, he says, will encourage providers to game the system by shifting calling traffic to VOIP networks.

By Paul Davidson / USA TODAY