Chapter 2 - Your Internet Phone Options

Phone-centric Internet Telephony Service Providers

Vonage

Company Details

Other Internet Telephone Service Companies

Computer-centric Providers

Skype

Other Peer-to-Peer Telephone Providers

Peer-to-Peer to Public Telephone Network Connections

Virtual Numbers

What's Old Is New Again: Internet Telephony from Phone Companies

Leveraging Copper

Verizon and AT&T

SBC and Qwest and BellSouth

Redial

Opening to Chapter 2:

All telephones and services making calls across the Internet are not the same. Huge differences exist in the features available to you depending on the type of service you get.

There are no adequate general terms used to describe the two different Internet Telephony approaches available today. So I decided to make up my own terms:

Phone-centric

This phone service duplicates the experience of traditional phone service you are used to with your traditional phone, and focuses on the phone, since that's what you touch and talk into. You can use your current telephone if you get an adapter that plugs your telephone into your broadband service. You may even be able to keep your existing telephone numbers. The leading company following this model is Vonage.

Computer-centric

This phone service creates a new method of talking between two people and bypasses the traditional telephone companies almost completely. Your contact point is the computer, either with a headset or a telephone that plugs into your computer. The leading company following this model is Skype.

Here's a quick comparison between the two types of service available. Generally, Phone-centric looks much more like the telephone system you're used to, while Computer-centric offers lower cost and new features for users who rely most on their computer (desktop or portable).

Table 2 - 1 . Capabilities of the different Internet phone systems

When you check the various broadband phone providers (there are nearly 500), you will read an enormous amount of overactive marketing materials (OK, hype). Seemingly every phone service provider calls themselves a revolutionary breakthrough in the history of human communications. They are wrong.

Phone-centric service providers look quite a bit like traditional phone companies. They have centralized systems, like the old telephone company switches, but they use data networking routers to transfer calls rather than huge traditional telephone switches. They use broadband (the coax wire used by cable providers or the telephone lines used by DSL providers) wires for their phone connection rather than the two-pair copper wire used by the traditional phone companies, but it's still wire. When they start running fiber optic cable to each home for truly high bandwidth broadband service, it's still a physical wire coming into the home. These companies claim they revolutionize the telephone, but they are only an improvement, not a revolution, in the technical world.

Acronym Alert: DSL = Digital Subscriber Line, the telephone company's broadband technology.

Computer-centric service providers looked at the technology from a new angle: put all the intelligence in the end devices (computers of one kind or another) and let each caller connect directly to their desired callee over the Internet. In other words, have the minimal amount possible of centralized services (a listing of other users using authentication software to track them when they log into the service) while doing everything possible on a peer to peer basis. These companies claim they revolutionize voice communications, and they have reworked the traditional telephone model into something new by focusing on the voice part of the equation rather than the hardware part. They may be right.

In marketing, your company is always revolutionary while your competitors are always evolutionary. Example: your competitor is evolutionary because they slapped a new coat of paint on their product, but you are revolutionary because you redefined technology through color differentiation. Yes, that's a new coat of paint on the product, spun by marketing folks.

Perhaps one way to illustrate the two major different approaches concerns the focus of each technology. Phone-centric services put the focus on the telephone, and recreating your traditional phone experience as much as possible. Computer-centric services focus on the computer as a means to transmit voice, as well as other data. Unfortunately, the dividing lines go out of focus on a regular basis, and will continue to do so as new players move into the market with new features.

Drilling down a little, let me show you three different ways that combine the two major methods with a few twists here and there:

Any Phone To Any Phone

T he Phone-centric answer and the one most comfortable to most consumers. Your existing phone plugs into an adapter that connects to your broadband service, rather than into the old telephone jack. Modern data switches at your new telephone provider connect your call to any phone connected to the traditional phone company (including cell phones) and any phone connected to another Phone-centric provider. The reverse is also true, meaning you have a phone number reachable by every phone in the world. But the use of data techniques rather than the old phone switches keeps the price low and adds a bunch of modern features. This is the most expensive type of Internet Telephony, and the major player in this market is Vonage.

Computer Software Phone to Any Phone

A headset connected to your computer calls through your broadband provider to a third party's data center (such as Skype's) and on to the Plain Old Telephone System central office nearest the number you dialed. These calls are less expensive than regular long distance because the Internet carries the call for the longest distance and makes a local call at the far end. Sometimes people can call you from any phone, and sometimes they can't. The major player in this market is Skype with their optional SkypeOut feature.

Computer Software Phone to Another Computer Software Phone

T his is the earliest type of Internet Telephony that completely bypasses the traditional telephone company network. Only computers with the right software can connect to each other, and there is no phone number available for outsiders to call you from a traditional phone. This type of service is almost always free, but limited. Skype is the leading player in this market, but there are scores of others with similar features (instant messenger programs have had voice chat in some form for years). Unfortunately, you often can't call from a computer using one brand of software to another computer using a different brand of phone software.

Companies announce new twists on these major options seemingly every day. Sometimes the twist is to put the computer software into a special phone (often called a digital phone), and sometimes the twist is to divert your existing phone line used to reach your traditional phone company central office to a broadband phone provider office. They convert the analog phone signal into a digital data stream at their office rather than your house. And sometimes your digital phone is a combination between a wireless network data connection and a traditional cell phone, letting you choose which service you prefer if more than one are available at your location.

Confusing? A little bit, but the consumer market for broadband phone calls still needs to mature. Some of the "gee-whiz" announcements flying out of small companies today may never become real products or services. Many of the companies making the most noise today will be bought by older, more established telephone companies tomorrow. But the technologies have pretty well stabilized (even if some of the implementation details haven't), so you can make a choice today that will still provide excellent service next week and next year. And if you choose wrong, number portability may let you change services and keep your number in many cases, making it simple to recover and start afresh with a new service provider.

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