Switch to the Internet and All Phone Calls Are Free?

Dennis Faas's picture

Two new start-up companies are looking to entice the average consumer to make all of their telephone calls over the Internet and bypass the high-priced local phone and cable television companies. Using the service will may result in free calls, and will be compatible with almost all standard-issued phone handsets.

But, in a world where most good things come with a catch, the "free calls" are not initially free. The one-time hardware cost and subsequent low annual membership fees have many believing that nationwide calling from a regular home phone is getting really close to eventually becoming free. Analysts believe that the recent influx of inexpensive alternatives for making phone calls will likely drive down the prices for traditional phone plans.

Ooma Inc. is one particular start-up company that has captured the attention of tech enthusiasts with its call-routing device, while arousing curiosity from a number of celebrities and celebrity-watchers because of their official creative director, popular actor Ashton Kutcher. (Source: latimes.com)

Ooma will start selling their device, which plugs into a home network router to connect calls over the Internet, for a price of $399. After that initial expense, phone service to anywhere in the nation is free for life. (Source: consumer-action.org)

The company also offers a number of incentives that go along with their service, including a voice mail setup that can deliver messages to a designated email account, a "do not disturb" feature that defers all calls to a voice mail account and an instant second line that allows someone else in the home to pick up an extension phone and make or receive a call.

At the end of September, another start-up company will begin selling a small device that plugs directly into any USB port. At the other end of the device, which resembles a flash drive, is a jack that connects to all standard telephones. The company, MagicJack, will charge $40 for the device and a year of service for any calls in the U.S. and Canada, then $20 for each additional year. While the MagicJack device will work only when the host computer is turned on, the device also works overseas so that travelers can take the product with them, plug it into a compatible port and make all calls to home for free. (Source: latimes.com)

These two services are the latest to use a technology known as Voice Over Internet Protocol, or VOIP. As more and more companies begin using VOIP technology, other established phone carriers will have to decrease their prices to keep up with the expanding industry.

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