Let (cordless) freedom ring
A new voice over Internet phone system makes it simple for even tech neophytes to tap into the cutting edge of telephony--and maybe save a bundle on their bills.
By Peter Lewis

(FORTUNE Magazine) – ANTONIO MEUCCI invented the telephone around 1860. Terri Pall, a jazz musician, invented the cordless phone in 1965. A whole bunch of nerds invented the Internet in 1969 when everyone else was partying at Woodstock. And now, in the technology equivalent of a three-way conference call that took 145 years to connect, say hello to the cordless broadband Internet phone.

The VTech IP 8100-2 Broadband Cordless Phone System ($100 after a $50 mail-in rebate) allows consumers with high-speed Internet access to wander around the house making and receiving unlimited calls in the U.S., Canada, and Puerto Rico for as little as $25 a month, using the Vonage voice over Internet protocol (VOIP) phone service. It works only with Vonage, and not with rival VOIP services. Consisting of a small base station and a pair of 5.8-gigahertz cordless phones--extra handsets cost $50 each, and as many as four handsets can be connected--the VTech and Vonage system is easier to set up than other VOIP systems I've tried, and it won't interfere with most home Wi-Fi networks. Best of all, the Vonage service is more advanced and versatile--and sometimes significantly cheaper--than the phone services we grew up with.

In a VOIP system, a standard phone connects to a magic box that sits between the phone and the cable or DSL modem, converting speech into blizzards of packets and vice versa. The packets scurry over the same broadband connection you use for e-mail, web browsing, and music downloads. You can call Grandma even if she doesn't have an Internet connection, and she can call you, and the sound quality is pretty much equal to what you hear on a traditional phone. The unequal part is the phone bill, especially if you make a lot of long-dis- tance calls. (You still have to pay for your broadband Internet service, though.)

The VTech IP 8100 system is clever because the phone base station is integrated with the VOIP adapter, eliminating extra wires and boxes. Cordless Vonage-enabled phones can be distributed around the house, instead of having a single phone tethered to the broadband access point. (For those who like to get out of the house from time to time, Vonage says it will have a Wi-Fi phone for sale before the end of the year.) VOIP services offer features that old-fashioned analog phones can't match. For example, you get to choose your area code. If you live in Possum Trot but want the cachet of a New York City phone number, it's yours. Or, if you live in Gotham, you can pay $5 extra each month for a second "virtual" number in the Possum Trot area code, so that all your kin back home can reach you by dialing a cheap local number. Adding a dedicated fax line costs $10 more a month.

Other perks include voicemail that can be checked from a mobile phone or retrieved through any Internet-connected computer. Ring Lists and Call Hunt allow incoming calls to find you wherever you are around the globe, ringing your home phone, your mobile phone, or any other phone that you designate if you're not around to answer your main number.

As if on cue, a thunderstorm knocked out my cable Internet service just as I was about to test Vonage's "network availability" feature, which detects broadband network outages and automatically routes calls to an alternate nonbroadband number of your choosing, typically a mobile phone. If you don't have an alternate phone and worry about not being able to make or receive emergency calls, VOIP is probably not a good choice. A VOIP system is only as reliable as your Internet service provider. Also, it's important for Vonage customers or any VOIP users to register for local 911 emergency service, because otherwise the calls may not be answered nearby.

Other hang-ups: Vonage's human customer service is lousy. There are no available area codes for some major cities, but Vonage says it's working to add numbers. And customers who get broadband service through a DSL modem face a conundrum: VOIP allows people to save money by dropping their existing phone service, but phone companies often won't sell broadband data services à la carte. No broadband, no VOIP.

On balance, though, the VTech and Vonage cordless broadband phone system is one smooth operator. It's almost worth being placed on hold for 145 years.

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