As technologies mature and more households gain access to high speed Internet, consumers will come to realize that it is simply more efficient and cost effective to send packets of voice over the Internet than over a point to point circuit switched land line. Long distance charges become a thing of the past, and international calls are pennies a minute if not free to some countries.



VoIP solutions are readily available to anyone with a high speed Internet connection, and the only hardware needed is an Analog Telephone Adapter (ATA) and a phone. For most consumers, utilizing a calling plan from a VoIP service provider is the best solution. Most VoIP service providers will provide the ATA hardware (or software) for free, and monthly charges range from free on up.

Peer to Peer VoIP

The least expensive VoIP solution would be using a computer on a peer to peer network. Offered from such VoIP service providers as Skype or the Gizmo Project, the software is free to download and calls within the network are free worldwide. Calls to PSTN numbers are charged at a low VoIP rate. Peer to Peer VoIP is a software solution, meaning that no ATA is required, and your phone is a pair of earplugs and a microphone plugged into your computer. The downside is that call quality is lacking compared to some of the hardware VoIP solutions available.

The "Pure Play" VoIP Service Provider

Over the past few years, a new generation of upstarts has introduced themselves into the residential VoIP arena. Probably the most successful (at least popularity wise) would be the VoIP service provider Vonage. Thanks to their lavish spending on advertising, the technology of VoIP is becoming mainstream, and the general public is beginning to realize that if the circumstances are right, Voice over IP can be a viable cost saving alternative to the Plain Old Telephone System (POTS).

Vonage, Packet8, and SunRocket are just a few of many companies that are pure-play VoIP service providers. They have no interest in selling you cable TV, conventional telephone service, or cellular minutes. Monthly plans range anywhere from $7.00 to $40.00 and calls are free in the U.S., Canada, and in some cases Europe. International rates vary with many countries as low as 2-3 cents a minute.

These are the companies that have pioneered residential VoIP for the consumer and with their low monthly calling plans, the companies that will keep the giants in the Telecommunications Industry honest.

Telco's as VoIP Providers

Just as deregulation and the advent of cellular technology in the past, VoIP is poised to revolutionize the Telecommunications Industry. And the large telephone companies, even the cellular phone companies are entering this new era kicking and screaming.

Telco's like AT&T, the regional Bells and others are happy to provide broadband internet access through DSL, but very few are willing to unbundle the internet service from their conventional telephone services. They could do it technologically, and a few local phone companies are offering DSL on the "local loop", without the wire with the dial tone. The fact is, having a broadband connection that requires you to also buy a conventional telephone connection pretty much defeats the purpose, thus making VoIP through DSL impractical for most people.

That said, the Telco's see the writing on the wall and are slowly beginning to implement Voice over IP telephony. AT&T and Quest Communications offer residential VoIP solutions starting at $25.00 and $30.00 respectively, just slightly higher than a pure VoIP service provider. All of the basic features such as call forwarding, speed dialing, and 3-way calling are included, and premium services like virtual phone numbers, conference calling, and call filtering can be had for an additional charge. International rates seem to be somewhat higher than pure play rates, though only by pennies.

VoIP and Cable Companies

If anyone is in a position to win the Telecommunication wars, it's the cable companies. Massive consolidation in the cable industry has led to huge privately owned networks that in many cases make it unnecessary to route calls over the public Internet. Quality of Service issues can be handled in house, and after all, companies like Cisco Systems pretty much built the Internet and are largely responsible for the development of Voice over IP Telephony.

Cable companies as VoIP service providers have the ability to bundle voice with high speed data and digital cable TV, and are even now running introductory offers of all three for 99.00 a month in some markets. But be careful, introductory offers end and VoIP plans with the cable companies are some of the most expensive to be had.

While VoIP service providers like Comcast and Time Warner generally receive good reviews for sound quality, monthly calling plans cost $40.00 and $45.00 respectively. Not bad when looking at a $70.00 phone bill from Bell South, but over twice as much as a pure-play VoIP service provider. No doubt, a good reliable broadband connection through a cable modem is the ideal VoIP solution (wireless notwithstanding), but you don't have to use your cable company for VoIP.

In the end, it all depends on whats important to you. If all you need is to call a friend in China on the same network, then a peer to peer VoIP service provider is for you. If you live in an area where it's offered, a telecom VoIP solution promises lower bills than their conventional connections, provided you can drop the land line.

For those that have cable modems, the choice of VoIP service providers is vast. For the monthly cost of another broadband connection, cable companies will come out to install the equipment and rewire every jack in your house. And they are just a service call away. Alternatively, the pure play VoIP providers offer the lowest rates around, and the quality is usually just as good.

Just remember, it's all in the pipe. Calls will be as clear as your VoIP service providers' network is uncongested.