Taking the VoIP plunge

Although I often work with enterprise-level companies that span the globe, my own IT consulting and tech-writing business is a small one. Like other small businesses, for some time we have been taking advantage of the cost savings and other benefits of voice over IP (VoIP).

A few years ago, had to maintain three PSTN phone lines. We paid several hundred dollars per year, which included charges for long-distance calls that inevitably had to be made during the most expensive peak hours. Today we have more available lines for well under $100 per month and don't pay anything extra for peak-hour calls to other states and even other countries — thanks to VoIP.

However, we still have a single landline for which we pay over $40 per month for bare-bones basic service: no caller ID, no voicemail, no frills at all. Long-distance charges are extra. By comparison, a basic VoIP package with Lingo that includes call forwarding, caller ID, speed dial, three-way calling, voicemail with email notification and other advanced features costs $21.95 with free long distance to anywhere in the US, Canada, Puerto Rico and Western Europe. Vonage is a little higher, at $24.95 per month for the same basic package. Sunrocket is even cheaper than Lingo, if you pay for a year of service up front at $199 (less than $17 per month), and you can cancel anytime and get back a refund for unused months, but it doesn't include calls to Europe.

Is it time for us (and maybe your small business, too) to cut the cord with the telephone company completely? Let's look at the pros and cons.

What VoIP doesn't do
There are still some things that VoIP can't do as well as a landline — or can't do at all. Some security alarm monitoring services don't work with VoIP. In fact, we found that this was one of the top two reasons home users and small businesses kept their landlines after implementing VoIP. If you have a monitored alarm service, check with your monitoring company.

Some companies now support VoIP, some use your broadband Internet connection without going through your VoIP service, and there are others that use a dedicated cellular link for communicating between the alarm system and the monitoring station. An advantage of this last option is that an intruder can't cut the phone line in order to thwart your security system. Examples of alarm monitoring services that don't require a landline include NextAlarm's Alarm Broadband Network and Alarm.com.

Even if you find a new alarm company serving your area that doesn't require a landline, you may run up against the same problem we did: many alarm companies require a long-term contract, so you may be locked into paying your current service their regular monthly fees for the term of that contract.

Another major drawback of VoIP is that it's dependent on your electrical power service. Unlike public switched telephone network (PSTN) phones, VoIP lines don't have their own power source. If the electricity goes off, your VoIP line goes down. You can ameliorate this somewhat by plugging your VoIP equipment into an Uninterruptible Power Supply (UPS), so that you'll have some time to be able to make calls after the electrical outage begins. And more and more small businesses and home offices now have backup generators...