What Is VoIP?

ByABC News

Dec. 11, 2003 -- A computer technology called Voice over Internet Protocol, or VoIP, is helping to pave the way to cheaper telephone calls — and possibly bypassing the need for service from the local phone company. Here's what you need to know about VoIP.

What Is VoIP?

Voice over Internet Protocol, is an online scheme that has been bubbling around the Internet community for the past few years.

Basically, it's a set of common Internet standards that allows a user's voice to be converted into small packs of digital data which can then be sent over computer networks.

At the receiving end, VoIP computers reassemble the data packets back into a conventional audio signal that can be heard as they are on a regular telephone line.

What Is Needed for VoIP Calls?

Most VoIP calling schemes require a fast, dedicated connection to the Internet, such as those found in corporate computer systems or home broadband — cable modems and Digital Subscriber Line (DSL) service.

Some VoIP providers will require the use of a special VoIP phone. Others will use a special adaptor to connect a regular telephone to the customer's home computer network.

What Are the Advantages?

Primarily, the biggest draw for now is cost.

By using the Internet for transmission, VoIP systems avoid paying the fees charged by regional telecommunications companies for use of their dedicated telephone switching networks. So, many VoIP service providers are able to offer unlimited flat-rate calling plans — typically $30 to $50 per month.

But since VoIP calls are essentially data transmissions, many VoIP schemes can offer a slew of new features and services that aren't available with traditional telephone service.

Some examples: subscribers can typically go to a personal Web site to instantly see a log of missed calls, access voice-mail messages, or even forward calls to alternate phones.

What Are the Disadvantages?

VoIP works only with a dedicated, high-speed connection to the Internet. And in the United States, cable modem and DSL service isn't universally available yet.

Also, consumers will have to take a hard look at their monthly telecommunications bills and usage patterns before deciding if VoIP is a money-saving deal.

With most VoIP plans starting at $30 per month added to the monthly broadband access fees, consumers can easily find bills that could mount up. In some cases, traditional telecom and wireless service plans which bundle cheap long distance and local rates might make more sense.

Consumers will also have to consider that not all VoIP plans allow for so-called "number portability." In other words, you may be assigned a new "telephone" number to use the new service.

More importantly, since VoIP uses the Internet, it's just as vulnerable to network outages and computer problems. If your home network crashes or there's a local power outage that disables your computer connection, you're out of telephone service, too.

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