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Hanging Up on the Baby Bells

New voice-over-IP services could cut your phone bill in half.

By David Connell

I don’t know what it is about the phone company, but it always seems like my bill is higher than I think it’s going to be. Maybe it has something to do with the taxes, surcharges, access fees and other strange and niggling costs that are added on the back of my bill each month. My company has my monthly fee set at $45, but the bill always seems to hover around $60.

VoIP services even come with add-ons like voice mail, caller ID and call waiting free of charge.

Fed up with these mystery charges, I once dumped my landline vowing to use my cell phone for all my calls. At least then I would know what my monthly bills would be. Wrong again! The increased time I spent on my cell phone, ordering pizza, haggling with the good folks at REI and discussing politics with my father, shot the bill up well past my monthly fee. I believe these are called “overage charges.” Add in the shoddy reception I got in my sound-proof apartment, and I was soon retreating back to the land line.

VoIP to the rescue
But now there’s a new kid on the block that promises to combine the simple pricing of a cell phone—without the overage charges—with the reliability and clarity of a landline. It’s called voice over IP (VoIP, for acronym fans), and it allows you to make telephone calls using your home phone over a high-speed internet connection. Prices for VoIP services typically fall between $15 and $20 per month and—once you’ve gone through an initial set-up—function like a typical landline, except without the hidden fees and long-distance charges. VoIP services even come with add-ons like voice mail, caller ID and call waiting free of charge. You can even get added features like internet dialing, remote call forwarding (again via the web) and privacy functions that forward calls straight to voicemail—these are usually gratis as well. While some of these functions are managed through your computer, your phone works independently from your PC, meaning you won’t need to have it switched on to make and receive phone calls.

The disclaimer
VoIP is a great alternative to traditional phone service, but there are some drawbacks to keep in mind. First, there is the set up. The technology works by plugging your phone into an adapter, which is connected to a router, which in turn is connected to a high-speed internet connection. If this type of wiring is intimidating or frustrating than the service probably isn’t for you. Unlike most high-speed internet set-ups, VoIP companies won’t come out to your house and get you hooked up. Second, many VoIP services don’t have access to 911, which can be a real safety concern if it is your only line of communication. Third, the ability to keep your current number when you switch to a VoIP service is spotty. All of the providers listed below have search engines that will tell you if you can transfer your existing number to their service. And finally, if you have a cable, satellite or TiVo box that needs to be hooked up to a phone line to download information then VoIP won’t work for you. These devices only work with a traditional phone line.

Still want to give it a go?
If none of these drawbacks are substantial enough to put you off VoIP (only the last one about satellite boxes and such was a deal breaker for me) here are some of the major companies providing this service:

Packet 8
Packet 8’s domestic residential plan is $19.95 per month, with a $29.95 activation fee. The plan includes unlimited calls inside the U.S. and Canada and offers voicemail, caller ID, call waiting, three-way calling, call forwarding, caller ID blocking, and online account management. The company also offers an extensive business plan called Virtual Office which comes in at $39.95 per extension, per month. You’ll also face a total of $152.95 in upfront charges that cover equipment, shipping and activation. But, you get a lot for your money, including a 24-hour auto attendant that allows callers to dial by extension, name, or access a company directory. It also includes conferencing ability and business-class voice mail.

Vonage has a $14.99 residential plan that includes up to 500 anytime minutes. For $10 more you get unlimited minutes. Vonage has the distinct advantage of offering 911 service, and it seems to be more reliable when it comes to keeping your current telephone number. It also comes with several bells and whistles including caller ID, call waiting and voicemail. Vonage also has a small business plan for $49.99 per month that includes a dedicated fax line.

AT&T CallVantage
If you want to try VoIP with the backing of a big carrier, try AT&T. Their CallVantage program is $29.99 a month, and they charge the same price for activation, but your first month is “free,” so really it’s a wash. The service also comes with the usual suspects of free features—voice mail, caller ID, etc.


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