VoIP: What you need to know

...the better the call quality is. With a high-speed broadband connection, for example, you can make calls and surf the Internet at the same time.

You'll also need VoIP software. Consumers can choose a version that loads onto a desktop or laptop computer, which allows the computer to make calls through its modem connection to the Internet. The customer uses the computer's built-in microphone and speakers, assuming their machine has such features, so there is often actual phone or extra adapter needed for this version of VoIP service.

But in cases where customers want to convert their home phone to a VoIP dialler, an adapter is necessary. In this scenario, the VoIP software is available preinstalled in a separate piece of hardware known as an analogue telephone adapter, which is installed between your home phone and the broadband modem.

The cost of these adapters is dropping rapidly. Most are priced well below $100, and in many cases they are simply given to customers who buy VoIP service.

Who sells VoIP?
A surprisingly varied group of vendors sells VoIP. Cable operators, for example, typically sell VoIP services as part of a "triple play" of voice, video and high-speed Internet services that are all steeply discounted when packaged together. They say their VoIP services are the best because calls are carried over the cable company's privately owned network, allowing its operators to give priority to VoIP calls. That guarantee doesn't hold, however, for calls to someone who is not a cable broadband subscriber.

There also are companies, such as Vonage, that don't own their own networks. Calls placed through these providers are sent out on the general network serving the Internet, which means the calls are out of the providers' control and can be negatively affected by network congestion networks and security problems. These services require you to supply your own broadband service.

There's also a growing class of companies that give away VoIP software and then sell premium services, such as those that allow users to dial traditional phones using their PC-based VoIP. The most famous of these companies is Skype, a Luxembourg company that has millions of devotees. On most days, there are about 3 million people making calls over the Skype service.

What does it cost to call traditional phones from my PC?
Typically, it's less than 2 cents a minute. For instance, Skype just lowered its fees to about 1.7 cents a minute, on average, for VoIP calls made to traditional phones.

What happens when the power goes out?
While traditional telephones continue to operate when the power goes out...

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