News

Companies target Treasure Valley business owners for technology

More companies are hoping that people will decide
to plug into their computers to make the telephone calls of the future.

This month, both Qwest Communications International and Velocitus, a subsidiary of IdaCorp Inc., are rolling out so-called "Voice over Internet" calling plans in the Treasure Valley, hoping to entice customers to what many in the industry are calling the technology of the future.

Ken Dey
The Idaho Statesman

http://www.idahostatesman.com/apps/pbcs.dll/article?AID=/20040711/NEWS02/407110327/1029

The two companies are targeting business owners first, but plan to follow later in the year with residential plans.

Despite the potential of the technology, those watching the industry develop say universal acceptance isn’t something that will happen overnight.

"If you were to look at it in 10 to 15 years’ time, everyone will be using Voice over Internet protocol," said Mark Main, senior analyst at Ovum, a British consulting firm. But getting there "will be quite varied, quite torturous and not at all clean."

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What kind of equipment do I need?

To get started, you need a computer with a broadband connection. Some VoIP providers offer a special VoIP phone or allow the use of a regular phone connected through your computer with an adapter. Calls can also be made directly from a computer using a microphone.

How much does it cost?

Prices for service usually start at just less than $20 a month, but that often doesn’t include the cost of the broadband Internet service.

Does the person I’m calling also need to be using VoIP?

It depends. Some VoIP services only allow you to call other subscribers to the same service, but that trend is changing. The larger companies now offering VoIP allow you to call any number just like you would with a normal phone. That’s accomplished because the VoIP service converts the voice signal from your telephone into a digital signal that then travels over the Internet. If you’re calling a regular number, your VoIP signal is converted back to a voice signal before it reaches the phone. A person can also call your VoIP phone through a regular phone.

Does my computer have to be on to use VoIP?

Not if you’re making calls with a phone and adapter or VoIP phone. You can also use your computer while talking on the phone.

Are long-distance charges incurred when I call out of my area code?

It depends. Some providers offer free long distance to other subscribers of the same service. Some providers offer a flat rate that allows for a fixed number of minutes, while some providers charge you long-distance rates similar to traditional wireline telephone services.
Source: Federal Communications Commission
Related Stories

* How quickly will VoIP grow? http://www.idahostatesman.com/apps/pbcs.dll/article?AID=/20040711/NEWS02/40710003/1029

Related Links

* Federal Communications Commission – Voice Over Internet Protocol http://www.fcc.gov/voip

* Velocitus | Connections: Voice Over IP (VolP) Phone Service http://www.velocitus.net/connections

* Qwest http://www.qwest.com/

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Voice over Internet Protocol (known to insiders as VoIP) uses technology that packages voice calls as data and sends them over broadband connections and through the Internet.

The technique is often less expensive because it avoids some access charges inherent in the traditional phone network, and opens up new features, such as Web-based management of voice mail.

And for now, VoIP isn’t regulated by the Federal Communications Commission and isn’t subject to federal taxes, although that may change.

The potential of VoIP is one reason Qwest, Velocitus and other companies such as AT&T have upped their efforts to introduce the technology, but there are obstacles likely to delay the growth of VoIP.

The biggest challenge is making consumers aware that the technology exists.

A June 24 study by the Pew Internet and American Life project found only 27 percent of U.S. online users have heard of VoIP service.

Another major drawback is the need for a broadband connection, a high-speed Internet connection usually provided by cable companies or available from telephone companies using high-speed Digital Subscriber Lines.

The standard dial-up connection using traditional phone lines doesn’t have the capacity or speed to deliver effective voice communications via the Internet.

AT&T said last week when it introduced the service in 10 states that VoIP "is not a complete substitute for traditional telephone service because it does not serve the needs of millions of Americans who cannot obtain or afford the high-speed Internet connection required."

TNS Telecoms estimates that only 18.1 percent of consumers in those 10 states have broadband.

Qwest in its initial rollout of the service is offering the service to business customers in Boise, Denver, Minneapolis and Phoenix in mid-July.

By year’s end, Qwest hopes to roll out the service to 22 other cities.

Velocitus is starting in the Treasure Valley with business customers as well but eventually hopes to take its service nationwide.

Both companies say the next offering will be to residential customers.

Jim Schmit, Qwest president for Idaho, said Boise is a good market to introduce the new technology.

"Boise has always been a good market for us even though it’s a little smaller than the others," Schmit said. "It has a great base of business customers who are willing to test leading edge products."

Improving the technology

Early users of VoIP faced challenges because they were often buying the broadband from one company and VoIP from another.

"If you are providing phone services on someone else’s broadband access network, you have no control over the quality of service," Main said.

That said, some VoIP carriers have struck agreements with broadband providers. A good agreement can mean your call travels only on one broadband network.

A bad agreement — or no agreement — means your call could get switched from network to network, which can hurt quality.

"It’s like hopping on the Acela (Amtrak’s high speed commuter) train versus switching trains four times," said Andy Abramson of Del Mar, Calif., who owns an advertising firm and runs a consumer VoIP Web journal, or blog.

Both Velocitus and Qwest say their customers will only be using their own networks, so reliability concerns can be addressed quickly.

Prices for VoIP can often start below $20 a month, but that doesn’t include the broadband connection.

The standard price for residential VoIP packages from AT&T and Cablevision Systems Corp. is $34.99 a month for unlimited local and long-distance calling, voice mail and call forwarding — but that doesn’t include a broadband connection, which generally costs at least $30 a month.

Qwest said its packages will be competitively priced with traditional services but will vary based on what type of package is purchased.

The costs to set up the systems vary based on what the features are, but a complete package of services including the phone and Internet service can cost less than buying them separately.

Cameron Christian, vice president of marketing for Velocitus, said they were able to outfit a small business with the VoIP, which included a long-distance calling plan, plus Internet service for just more than $400 a month. Christian said a similar system using land line phones and separate Internet providers would run that same business anywhere from $500 to $1,000 a month.

Besides the price, VoIP providers point out how much more efficient their systems are compared to traditional business phone systems.

Velocitus’ Christian says customers have the option of making calls over the computer via a microphone, or using a traditional phone that is designed to work with VoIP. The features of the phone system are managed through a Web-based portal that allows users to perform many tasks including storing phone numbers, saving voice messages, blocking unwanted calls, screening incoming calls, forwarding their office phone to cell or home phones and having a log of all calls dialed and received.

Christian says another benefit is the ability to access your office phone system while away from the office. Users can log in from any Internet terminal and view calls, listen to voice messages and manage the phone system. They can also bring a VoIP phone with them when they leave the office and plug into other computers to make calls.

Unlike earlier VoIP technology that required users to have the same VoIP programs to receive calls from each other, the new VoIP systems allow users to send and receive calls just like a traditional phone.

Boise attorney C.A. Daw, from Bosch, Daw & Ballard, said they’ve been testing Velocitus’ system and have been impressed.

"We’re just into a week of using it, but we’re seeing some intriguing possibilities at this point," Daw said.

The one thing that Daw likes the most is the ability to store voice mails for future use. In the company’s current phone system, the voice mails are only stored on the phone and often have to be deleted because of space.

Daw also likes that his phone contacts are now integrated with his Outlook e-mail, and to make a call all he has to do is click on a number. The system also allows him to use a variety of phone messages, without always having to re-record like a traditional system. When he’s at lunch, for example, he sets it up so a message saying he’s at lunch is played when people call.

As other businesses start using VoIP, Daw predicts it will take off.

"I would suspect that it will probably replace the traditional telephone," he said.

Even Qwest, which is still a major provider of land line service, expects this could further lead to the demise of the traditional telephone.

"It definitely will be a direct competitor to telephone service, depending on the availability of broadband connections," Schmit said.

"Once you have that (broadband), you don’t need traditional local telephone service."

VoIP drawbacks

Using VoIP for your phone service allows for many features not available to wireline customers such as managing your calls on your computer. And if you already have a broadband Internet connection, you can avoid paying for and maintaining an additional phone line just for telephone calls. But VoIP does have some disadvantages including:

• Some VoIP services don’t work during power outages.

• Early VoIP technology made it difficult for emergency 911 calls to be traced, but most service offered today allows that.

• VoIP providers may or may not offer directory assistance or a listing of your phone number in a phone book.

• To get VoIP service, you must have a broadband connection.

• The service is only as good as your broadband connection. If there are disruptions or delays on the network, they could interfere with voice communications.

To offer story ideas or comments, contact reporter Ken Dey at [email protected] or 377-6428.

The Associated Press contributed to this story.

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