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VoIP: The Next Household Word?
washingtonpost.com Staff Writer Monday, July 19, 2004; 9:35 AM
Another Merc article noted some other potential snags. "[C]onsumer advocates caution that residential customers should weigh potential downsides of the new technology – limited 911 emergency functions, home-alarm incompatibility and dead lines during power outages – before signing up," the article said. "It's very attractive if you're a heavy phone user," Janee Briesemeister of Consumers Union told the paper. "But it comes with some risk in terms of reliability, particularly in an emergency situation."
CNET's News.com also wrote about potential VoIP problems: "Protecting your home could get tougher, as well. Some home alarm systems have trouble with broadband connections, or their manufacturers don't yet trust the reliability of the Internet. Also, there's still no way to guarantee VoIP phones will work when power is lost, and not all VoIP providers offer 911 service. During a power outage, a VoIP phone is only as good as any battery backups on hand, because delivering power through the broadband connection isn't possible on a wide commercial basis. An emerging alternative broadband-delivery technique, broadband over power line, will solve this problem, but wide deployment is years away."
The VoIP Wave Machine
Washington Post technology columnist Rob Pegoraro reviewed three VoIP services, rating the set-up and call quality of service of AT&T's CallVantage, Vonage and 8x8 Inc.'s Packet8. His conclusion? "These services aren't for everyone. If you make very few phone calls in the first place, you'll save money by getting a low-end land-line plan. If you make a lot of calls, you may still come out ahead by picking the right calling-card plan – the VoIP services often had great international rates, as low as 2 or 3 cents a minute to Europe or Japan, but I found cheaper rates to other countries, such as India. You should also consider whether, instead of spending $20 or $30 a month on VoIP, you would be better off using all or part of that cash to upgrade your cell phone's calling plan," he wrote. "But for anybody looking to add a second or third phone line, or who routinely spends hours a month on long-distance calls, VoIP looks like the way to go. It's here, it works (well enough) and it will save you real money. And I expect it will get better in a hurry. You'll soon see cable or DSL modems with built-in VoIP circuitry, eliminating the confusing setup – followed by VoIP phones that include their own WiFi receivers, so you can make calls using any available WiFi signal."
Fortune Small Business focused on Vonage and its chief executive, Jeffrey Citron. "Citron made the technology accessible, turning a regular phone into an Internet appliance about as complicated as an answering machine. And his phone service is cheaper because he avoids traditional phone companies' expensive infrastructure and overhead and he circumvents portions of Baby Bells' and rural phone companies' pricey access fees. Citron's drive to make the technology appeal to laymen has been especially apparent in Vonage's marketing. 'VOIP was a bad word in the industry; it meant crappy technology. Outside the industry people don't care about acronyms,' Citron says. 'We called it "broadband phone,"'" the article said. "Consumers seem to be picking up Citron's message. In the year since launching its VOIP service, Vonage has become a $36-million-a-year business, growing 50% a quarter for the past three quarters. Citron expects the company to show a net profit in the second half of this year. To solidify Vonage's roughly 65% market share, Citron has penned deals with retailers such as Amazon and Best Buy. He has also signed partnerships with five cable companies and two Internet service providers so that Vonage can bundle its service with their broadband or Internet access."
Fortune also reported that "Cable television giants are jumping into the same body of water: They've just started to offer phone service using Voice Over Internet Protocol technology, or VOIP (pronounced 'voyp'). AT&T, which invented phone service, is in the game too: It hopes to ride VOIP back into the local phone business. And Cisco Systems, which has long dominated the Internet router market, is betting big on the technology. It wants to be to the new Internet-based phone network what Ma Bell was to the phone system of the 20th century: chief architect and equipment supplier. Like most revolutions, this one isn't going to happen overnight. The most optimistic forecasters predict a scant three million American homes will use VOIP by the end of next year. But what's clear is that VOIP is at an inflection point. A vision of how change might unfold comes from the Yankee Group: Starting in 2006, the research firm predicts, VOIP will really take off, and by the end of 2008 some 17.5 million users, or about 16% of U.S. homes, will be VOIPing—the beginning of mass-market acceptance."
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