"The Napster of Telecom"

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That's what one telecom analyst calls Vonage in a New York Post piece on the tiny company. Vonage sells voice over Internet protocol (VoIP) phone service. Another analyst notes that since VoIP is flat-rate while the old Bell system has per minute charges, it will "inherently kill the Bells."

Which is exactly why regulators and politicians will shoot to kill VoIP and Vonage in order to save their twisted, symbiotic relationship with the Bell oligopoly.

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  1. It’s already happening. The service is expensive for most DSL users because the Bells force you to continue paying for dialtone that you don’t need if you want to use Vonage over a DSL line. Since they own the ‘last mile’ wire they can effectively lock in those customers, even if their DSL isn’t supplied by the telco.

  2. Yes, yes.

    Yet another example of government meddling that will stifle innovation and competition.

    That said, you can’t really blame the telco’s charging for the use of their wires.

  3. “That said, you can’t really blame the telco’s charging for the use of their wires.”
    Sure can’t. And if they wanted to charge all the fees they charge now, minus the fees and taxes that they charge for delivering voice service, fine. But the wire’s already in place and was paid for a long time ago. All you’re really asking them to do is keep delivering current to the wire so somebody else’s signal can go down it.

  4. So if an airline paid for an airplane long ago, you’d expect free plane tickets? And if your phone company *could* offer voice service without taxes and USF fees I’m sure they’d be happy to sell it. If all you want is dead copper wire try asking for dry copper pair. I hear it’s still available in some areas.

  5. yeah but how do those web based phone calls get from A to B? Answer is via either phone lines, cables or fiber optic lines laid by the Bells. The bells operated under a tariff which partially shielded them from competition, but they also had to encounter the costs of building the networks. I don’t think it’s ridiculous for the evil phone companies to profit off their past investments. What investment do the web based phone companies have?

  6. Vonage Forum

    Voice Over IP
    appears to be ready for prime time in the home market
    Overview:

    Voice Over IP (VoIP) is a emerging technology for most large businesses today
    and may even have a good ROI for smaller businesses in a very competitive
    market. However I thought voice over IP at home meant running some software from
    your computer while wearing some geeky headphones that would make you look like
    something out of a B movie about cyborgs.

    Vonage is not like that at all. Vonage actually allows you to connect a Cisco
    ATA analog to digital phone converter to your existing phone(s). Your phone
    functions exactly the same as if you are using a regular POTS line(Standard
    Analog Line Provided by Local Carrier). You do have to dial the full 11 digit
    number for all calls but all features work the same such as caller-ID,
    call-waiting, etc.

    The question is how well does it work? There will be different answers based
    upon your bandwidth and overall connection quality. I have a 2 Mb/s downstream
    and 386k upstream connection via cable modem provided by Time-Warner. I can be
    downloading at full strength and have no lag, hesitation, or dropped calls at
    peak usage times while I have another computer connected to the internet via WAP.

    What is the cost?

    Vonage has two plans:

    25.99 plan is for unlimited local and regional long distance with 500 minutes of
    free long distance to anywhere in the U.S. and Canada.

    39.99 Unlimited long distance anywhere in the U.S. and Canada and unlimited
    local and regional calling.

    Keep
    in mind that most calls to Europe are generally 5 or 6 cents a minute so it is a
    bargain for many oversees calls also.

    There are positives and negatives to the service and a great deal of it
    dependents on whether you already have a good broadband connection which is
    reliable.

    POSITIVES:

    Low
    Prices
    – 40 bucks for unlimited long distance within the U.S. and Canada is
    an amazing rate. The lower plan with 500 minutes is also quite good depending on
    your calling habits. Please read the bottom of the page on how referrals can
    save you money also.

    Reduction
    of other services
    – This example only pertains to me but is applicable to
    many other individuals. I was paying close to 50 dollars a month to my phone
    carrier, another 13 – 25 a month to a long distance carrier for a long distance
    plan and long distance fees. I also have two cell phones in my family where the
    majority of long distance calls are made. I now am able to get rid of the local
    phone carrier, the long distance provider, and use a shared minutes plan on the
    cell phones instead of having two separate plans which have been reduced. This
    will save me approximately 800 or more in one year. That is a nice ROI in my
    opinion.

    Features
    – This is where Vonage excels. It is loaded with free features such as:

    Voicemail
    – This is nice because you can check voicemail through your phone or from the
    internet via windows media player, etc. The voicemail can be configured from the
    web to pick up after so many calls or after being forwarded to another number
    with no answer. Vonage does not limit the number of messages that you can keep
    in your mailbox and they can all be managed online. Vonage will also optionally
    email you when you have a new voicemail. You can customize the greetings and
    configure so that if you don’t like call waiting, a person calling in gets a
    message stating you are on the phone so please leave a message and you will get
    back to them.

    Call
    forwarding
    – This can be configured from the webpage and is better than most
    because you have the option of forwarding immediately or after so many seconds.
    The fact that there is no long distance charges means you can forward it to any
    phone number in the United States or Canada for free. You are still able to have
    the Vonage voicemail be the default voicemail if the forwarded number does not
    pick up in case you want to keep all your voicemails in the same system.

    Call
    Transfer
    – I have to admit that I love this feature. You can transfer your
    current call to anywhere or anyone within the U.S. and Canada. Lets say you are
    on the phone with someone and you need to hit the road. Just transfer the number
    to your cell phone and keep on going. Don’t stop there. Think of the
    possibilities. Lets say you live in Boston and your brother lives in Seattle and
    your mom lives in Dallas. Call your brother and talk to him for a few minutes
    and then say “Why don’t you talk to mom”. All you need to do is transfer him to
    your mom in Dallas and hang up. Those two will be talking absolutely free of
    charge for everyone.

    Caller-ID
    – Vonage currently supports caller-ID assuming your phone has it built-in. This
    works fine but does not support caller-ID with call waiting at this point.

    Caller-ID
    Blocking-Vonage allows you to use the *67 in order for your phone number not to
    show up on other persons caller-ID display.

    Repeat
    Dialing
    – This is sometimes known as “demon dialing”. You dial 5 when you
    get a busy signal and then you it keeps trying to contact the person and rings
    the phone when the line is no longer busy.

    Call
    Return
    – You can dial *69 and a computer voice will tell you the last person
    that called and ask if you would like to return the call. This is voice
    activated so you just need to say YES or NO into the phone.

    911
    Service
    – This is a new feature at the time of the writing. You have to
    register this with Vonage by entering in your exact address and then Vonage will
    have any 911 calls go directly to your local emergency team for your area.

    Bandwidth
    Saver
    – This allows to sacrifice sound quality for the phone using less
    bandwidth. If you have a good broadband connection, you might as well leave this
    at full which is 90kbs.

    Network
    Unavailability Forwarding
    — This is the feature that allows me to get rid
    me of my local phone carrier. If your cable modem is not on or there is a
    network failure then Vonage will forward the calls any number of your choosing.
    I have it set where it forwards to my cell phone. This way if there is a power,
    I can still receive the calls to my cell phone.

    Virtual
    Phone Numbers
    – You can have multiple virtual phone numbers in different
    cities. If you live in Boston and want to make it local for your family member
    to call you in Atlanta then you can get a phone number that is local to Atlanta.
    It does cost 4.99 a month extra for each phone number outside of the first one
    you choose.

    Instant
    Online Records
    – In case you want to see who called and didn’t leave a
    voicemail or who you or a family member has called in a month, it is all
    accessible in real-time from the web page. They have a dashboard view that shows
    all activity of incoming and outgoing calls. You can do advanced searches in
    case you want to find out who called on a certain date or how many phone calls
    were made to a certain phone number.

    Take Vonage Anywhere in the world – You can travel anywhere that has
    broadband connectivity and hook up your phone and still call the U.S. and Canada
    for free. The internet connection still goes to the Vonage server so as far as
    Vonage is concerned, you are calling from the U.S.

    NEGATIVES:

    Dependent on Broadband/Power – You are completely dependent on having
    power at your house and no broadband outage. The Network Unavailability
    forwarding works greats if you have a cell phone or landline but it is probably
    not a good idea to have this service without at least a cell phone in case of
    emergencies.

    No
    411
    – There is no directory assistance available currently with this
    service. I personally never use 411 since the internet is the best way to look
    up phone numbers but this could be problematic for people who use directory
    assistance frequently.

    Does
    not have numbers for all cities
    – Although Vonage is constantly adding local
    numbers to new cities, they may not have one for your city. You can still get
    the service if you don’t mind having a phone number outside of your local
    calling area.

    Caller-ID
    Issues
    – The caller-ID does not always show the name of the person calling
    even if it shows the number. It also does not support caller-ID with call
    waiting. I am hoping that Vonage corrects this soon.

    Internet
    Latency
    – Internet latency could affect the quality of your phone calls and
    it is possible to get the “tin can” or echo effect on phone calls especially if
    you are downloading a great deal via on your computer. I have not run into this
    issue at the time of this writing but I expect it will occur at least
    sporadically just due to the nature of the internet in general.

    Only
    one phone Connector
    – The Cisco ATA only comes with one functional phone
    connector. This means you will have to find a way to hook all your phones up to
    one jack. This was no issue for me because I have a Vtech cordless phone system
    which just requires one analog connection while the other phones just plug into
    individuals cradles only for power. The one base transmits to all phones on the
    system. Most systems like this support at least 4 phones per one base. Another
    way to avoid this is by going to your telephone Network Interface Box outside
    your house and make sure you disconnect the two (or four) wires and then
    plugging the Cisco ATA directly into one of your analog outlets so that they are
    all live in your house. Cisco does not recommend me this however many people are
    doing it and the principle is sound. My best advice would be to call a
    electrician and seek their advice. I have never tried this myself so I cannot
    vouch for it.

    Conclusion:

    Vonage is not for everyone. However, if you already have a broadband connection
    and have a fair amount of long distance phone calls then it may be a cost
    effective solution and give you peace of mind knowing you will not have to pay
    for long distance phone calls anymore.

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