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| The Basics |
| VOIP (Voice Over Internet
Protocol) is generating attention and excitement as the communication
connection of the future. Long distance carriers, Baby Bells,
cable companies and independent VOIP carriers have increased
competition for VOIP subscribers and rates have dropped to $20-30
per month for unlimited domestic calling. VOIP offers several
attractive benefits over landlines, such as lower rates, calling
portability, area code selection, and control over the calls
you receive and where you receive them- even when you travel.
It also offers mobility and the ability to combine a cellphone
and wireless VOIP into one handset. Videophones will finally
be mainstream and allow you to see each other and talk for as
long as you want to.
However, VOIP may not be a viable telephone alternative for
many households.If you already have DSL and spend over $50-60
per month for local and long distance, VOIP may save you money.
However, if you are happy with your dial up service and have
small phone bills, don't switch to VOIP just to save money.
There are several problems to consider before tossing out
the land line and signing up for VOIP. Currently, some VOIP
services do not connect directly with 911, a critical issue
if you have children of any age or a family member with health
problems. VOIP is also unavailable during power and internet
outages. VOIP is only available with broadband or DSL; switching
to DSL service just to get VOIP will eliminate your savings.
Home security systems and non-voice communication equipment
a such as TIVO and DirectTV may not be compatible or reliable
with VOIP. VOIP could also become as vulnerable as computer
networks to hackers, computer viruses and network disruptions. |
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| How VOIP
Works |
| Internet calling hooks
standard phones to an adapter and broadband connection. The
adapter converts the voice signal to data packets, like e-mail,
and sends them out over the internet to a service provider where
they are converted back and sent to the traditional phone network
of the recipient. You must have a cable or DSL modem for VOIP
service.
The adapter goes where the broadband enters your house, but
this may not be the most convenient place for a phone. To
place phones where you want them or to have multiple phones,
use a cordless phone that can support multiple handsets. VOIP
does not work with the telephone wiring in your house.
VOIP offers calling features that landlines can't provide
such as: talking email, keeping your phone number for life
no matter where you move, choosing your area code, and choosing
additional phone numbers for the call to locate you. VOIP
service can also turn your computer or laptop into a functioning
phone.
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| Will It Save
Money? |
| Despite the hype and low
monthly fee, VOIP may not offer huge savings. Since VOIP requires
a cable or DSL modem, VOIP only saves money for the minority
of households already using DSL (currently only 20-25% of US
households have broadband). Signing up for the faster, more
expensive broadband connection just to receive VOIP would cost
an additional $40 per month and eliminate any savings. Adding
broadband service to VOIP raises the monthly rate to $70-90,
making it a good deal only for people who make a lot of long
distance calls. It is also a wise idea to keep your landline
for emergency calls which will cost an additional $20 per month.
If you receive DSL from a non-cable provider, then you must
keep your landline for DSL service. |
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| Federal Regulations |
| The FCC ruled that it,
not the states, will rule over VOIP. This sets up a uniform
national framework and prohibits states from imposing telecom
regulations on internet phone service. This also allows VOIP
to offer lower rates because carriers avoid paying taxes and
access fees for the traditional public switched phone network,
even though the networks are still neccessary to complete the
calls. Unfortunately, the loss of USF fees and fees that support
911 service could eventually cause an increase in fees for local
phone users.
The FCC is in favor of minimal regulation because they consider
VOIP calls more like email and information than phone calls.
The FCC declared VOIP service is interstate and outside the
state jurisdiction. VOIP customers can choose any area code
and make calls from anywhere they can get broadband connection.
It will be impossible to say which calls are within state
boundaries.
VOIP has opened the door for telecom compeition by allowing
competitors to enter the market without making massive infrastructures
investments. |
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