What is VOIP?
VOIP Phones have been referred by some as a "reinvention of the wheel" when it comes to telephone communications. VOIP stands for Voice over Internet Protocol. It is the general term used for the family of transmission technology that delivers voice communications over IP (internet protocol) networks. It is also referred to as IP telephony, Internet Telephony, Voice over Broadband (VOBB), Broadband telephony, and a broadband phone.

There are three main types of Voice over Internet Protocols. The first is referred to as ATA, the second is referred to as IP Phones, and the last is known as computer -to-computer.

How does VOIP work?
So how does a Voice over Internet Protocol work? The easiest way to think of it is that VOIP phones work just like your regular phones only the way in which the phone call actually gets to the phone has been rerouted. VOIP phones route the call through the internet instead of through a traditional phone line.

To be more specific, VOIP phones take analog audio signals and turn them into digital data that is transmitted over the Internet. The voice data is sent in packets through a high-speed connection. Using an Analog Telephone Adaptor (ATA) is the simplest and most common way to use VOIP. The analog telephone adaptor allows you to use a regular or standard phone to connect to your computer to place VOIP calls. This adaptor converts the analog to a digital signal. This method simply requires that you have a high-speed connection and the analog telephone adaptor. Plug your regular phone line from your telephone into the ATA and make sure the ATA is plugged into your high-speed connection and that you are ready to make phone calls.

IP phones are special telephones that are used for VOIP calls. They operate the same because they convert analog signals into digital data. All the conversion facilitation takes place within the phone. Regular or standard telephones have RJ - 11 connections to plug directly into the wall jack. An IP Phone is different than a regular phone. IP Phones have RJ-45 Ethernet connections. This means you plug them directly into your high-speed connection (router). Wireless IP Phones are able to place calls from any Wi-Fi hot spots.
Computer-to-Computer calls are as easy as the other methods. All you need for these types of calls is the software, a microphone, speakers, a sound card, and a high speed connection. Various companies provide these types of software packages.

What are the advantages of VOIP?
The first and most easily identifiable advantage to using VOIP phones is cost. The average individual can save anywhere from 30 - 50 % from their traditional phone service on a regular basis. Most VOIP phone service providers charge flat monthly service rates that are competitive with traditional phone service providers. VOIP phones also save you money if you ever have to move because your phone number is attached to your phone not a specific geographic location. If you move to South Dakota you don't have to worry about paying for new setup fees, transfer fees, or changes to services. It is easy to adjust and change your service plans.

For the money you spend on services with VOIP you get a full range of features that typically nickel and dime you to death with traditional phone services. Most VOIP providers include features such as Caller ID, Call Forwarding, Voicemail, and Three-way calling as included features in your monthly service charge. Traditional phone companies charge separate fees for these features.

While traditional phone service providers include free local calls, they charge for long-distance calls placed. With VOIP phone providers, unlimited calling within the United States is pretty standard. Some additional countries are included within that FREE calling boundary as well.

Another advantage is clear digital quality. Because your signal is converted into digital data your phone conversations are clearer than traditional analog signals. With VOIP phone services you can use your existing phones if you want. You can have multiple phones in your home as well. You can use the computer still while having a conversation just as you can with a traditional phone. You can even check your voicemails online or have them emailed to you.

Finally, a great advantage to VOIP phone services is portability. Since your phone number is attached to your phone and not your home you can take the phone with you anywhere you have an internet connection. That connection can be wireless or wired.

What are the disadvantages of VOIP?
Like any technology, there are no perfect solutions. One of the main complaints or disadvantages to using VOIP technology is that they are dependent upon wall power. If and when power outages were to occur, your VOIP phone would also be down. Unlike regular phone lines that run independent of power lines, VOIP phones run off the power supplied to your home.

A second concern involves emergency 911 phone calls. Your traditional phone line provides the 911 service centers with trace information identifying your location. With VOIP phone systems that information is not available because your phone number is specific to a geographic location. There is an e911 service out there that is currently attempting to address this issue.

Other issues arise with phone quality. While digital signals are much clearer than analog signals some issues do arise with call clarity when dealing with transmission of those signals. If you recall, these digital packets are transmitted through internet cables. If you have systems that are not equipped with enough broadband or large volumes of users your call quality can be diminished. Some of these packets can be lost all together causing pauses in the conversation. Sometime the delay can be four times the delay of traditional phone systems causing echo effects on the phone line.

Additional issues with transmission via the internet involve firewalls. Some firewalls prevent calls from coming through or have difficulties deciphering where to route them. They can be susceptible to viruses and computer hacking. While these instances are rare, VOIP companies are currently looking for ways to help protect against these issues.

Another disadvantage is that various industries have yet to come together to find a means of integrating their respective services together. This includes services like cable TV, home alarm systems and your VOIP phones. Some VOIP services may not provide directory assistance features as well.

While the list of disadvantages seems as long as advantages, most people can handle the instances of rare quality issues and rare power outages. VOIP phone services are growing rapidly throughout the company.

Who are some of these companies and what are the costs?
Below is a list of top companies and their respective plan prices. These prices are quoted based upon current advertised prices and may change or include additional specials. Some companies require setup/activation fees while others do not. Some companies will require specific time length contracts to guarantee pricing while others allow for flexibility in services.

1. Phone Power: $9.95 per month for the first three months then $19.95 per month. You can also pay $139.95 per year. This plan includes unlimited calling and plenty of features.
2. ITP: Costs for unlimited calling is $19.95 per month. 500 Minutes will run you $9.95 per month. If you place international calls you can purchase their international plan at $24.95 per month.
3. Packet8: Their unlimited plans run $24.99 per month or $174.00 per year. A 500 minute plan will run you $14.99 per month and international plans run $29.99 per month.
4. InTalk: Unlimited plans run $19.95 per month or $195.00 per year.
5. Vonage: Unlimited plans will run $24.99 per month and a 500 minute plan is $17.99 per month.
6. JoiPhone: Unlimited plans cost $8.95 per month or $107.40 per year. They have an international plan that runs $19.95 per month and a smaller 100 minute plan for $6.95 per month.
7. Voip.com: Their unlimited services run $19.95 per month or $199.00 per year.
8. ViaTalk: Unlimited calling plans are $22.95 per month and $199.95 with a 2 year contract. They also have a 500 minute plan that costs $9.95 per month.
9. Net2Phone: Unlimited calling for $24.00 per month.
10. ATT&T CallAdvantage: $25.00 per month.
11. Skype: Free for basic computer-to-computer services. International calls are charged a per minute rate.

Not all companies have services in all parts of the country. You will have to check with each of the companies to verify if services are available. Remember, most of these companies use analog telephone adaptors and may charge you monthly fees for the use of them or have you purchase them outright. Make sure you know when promotions end as part of your contract. Many providers succor you in by listing the price at $8.95 per month but it only lasts for three months and then jumps to $25. As with anything, you need to ask several questions about the VOIP service before you sign a contract with any of the providers.