VoIP poised to change communication

Will VoIP save you money this year?

VoIP is shorthand for Voice Over Internet Protocol and geek-speak for Internet telephoning. The technology has been around 10 years, but, thanks to transmission and sound quality improvements, it is poised "to change long-distance telecom as we know it," said Ian Wyatt, editor of the investment newsletter Growth Report.

AT&T, the Baby Bells and cable companies are touting it as the new thing in the telephone wars with the Internet as the battleground this round.

Upstart firms already offer cut-rate residential Voice Over Internet calling for anywhere from $10.99 a month for IConnectHere.com's bare-bones service with additional per-minute charges, to Vonage's $34.99 premium package that allows unlimited monthly calling throughout the United States and Canada.

Calls are made by computer or a land-line phone so long as it's hooked up to a high-speed Internet connection that can break voices into bits of digital data for transmission by Internet or private data network.

What's new is that telecom heavyweights see the VoIP as a way to compete by offering low-cost local and long-distance calling without having to build costly new telephone networks or renting existing land lines from arch rival firms.

First came Baby Bell Qwest Communications, which kicked off a "controlled rollout" Dec. 8 in Minneapolis-St. Paul that Qwest CEO Dick Notebaert plans to take nationwide by late 2004.

Next, No. 2 cable company Time Warner announced it would offer VoIP on its cable systems through joint ventures with long-distance carriers MCI and Sprint. Cablevision Systems and Comcast are expected to follow suit.

And No. 1 long-distance provider AT&T plans to sign up 1 million VoIP customers, starting on the West Coast and the nation's 100 largest cities by March 31.

"Unlike many of our competitors, who are constrained by geographic reach or broadband access technologies, our Voice Over IP offer will be available in cities across America to customers with different kinds of broadband access," AT&T CEO David Dorman said.

Compared to 150 million Americans with traditional wire-line service, VoIP's current 150,000 customers are few and far between. And while their telephone bills might seem to be a bargain, VoIP does have its price:

• You have to buy high-speed Internet service if you don't have a broadband line at home already that can run you an additional $25 to $45 a month.

• VoIP 911 emergency calling is still being worked out.