NYT Reviews VoIP: Vonage, Packet8, VoicePulse

securitas writes "The New York Times Technology section reviews VoIP services Vonage, VoicePulse and Packet8. A second article rounds up the competition including VoIP start-ups, cable companies and traditional telcos. The review primarily focuses on Vonage and it's an enlightening review particularly because the reporter isn't a techie. Most interesting is the comment from Vonage's CEO Jeffrey Citron: 'We're not that happy with the level of service today.' The outcome of the review and CEO's comments really do indicate that VoIP is still at the bleeding edge - and not for the average consumer - but the technology is maturing quickly. It will be interesting to see if the telcos do any better with their QoS (quality of service) - which has historically been a critical differentiating factor and competitive advantage - when they introduce their VoIP services in 2004."

Comments

Re:VoIP is available for UK users now

[technoLAHgist]

Broadband outage is still a problem. It's QOS is not as good as a phone service yet.

Re:VoIP is available for UK users now

[mafelixs]

The odd thing is that they recommend still keeping a normal phone line.

One reason I can think of is power outages. Normal phones and cell phones usually work during power outages, while you need an UPS to be able to use VoIP when the power is out. I would never rely on VoIP alone when it comes to emergency calls.

Commercial VoIP is a law away from disappearing

[Rosco P. Coltrane]

Commercial VoIP is an artificial market. By that, I mean that it only has a reason to exist because of a circumstancial state of affairs, the one dictating that commercial phone companies (traditional land-line based phones) are taxed and must maintain their network with the proceed of their sales, while VoIP companies don't pay taxes and rely on people paying their own internet connections.

I mean, apart from the cost of calls, there are precious few technological advantages in placing VoIP calls instead of normal phone calls (I'm just talking about national calls to simplify). If VoIP companies suddenly were taxed or had to pay a fee to internet providers for the extra bandwidth, this "quickly maturing" market would vanish instantly.

In any case, there's little difference between a VoIP company and a phone company : they both use digitally encoding to transport voice, it's just that the latter uses (and pays for) its own dedicated lines, while the other doesn't.

3 things are likely to happen:

- The feds step in and consider VoIP companies as normal phone companies (which they are), and tax them

- VoIP companies are asked to share the cost of maintaining IP infrastructure, in return for the burden they impose on it

- Traditional phone companies start providing "free" internet with their phone services, in which case customers have phone and internet for the same price, nulling VoIP companies' value

In all cases, VoIP companies die.

I don't see how VoIP companies will survive in the long run. They're the product of the fact that the internet is much younger, therefore much less regulated and taxed, than traditional phone networks. This will soon change no doubt, and they're actually helping the government realize that the internet is a tax loophole. I think they'll all disappear soon and actually hurt the freedom (free as in beer) of the internet in the long run by their very existence.

Re:Commercial VoIP is a law away from disappearing

[Anonymous Coward]

You are missing the point.

Phone networks are pretty complicated things, requireing special hardware that is aware of things.

Best effort networks however are relatively simple and an awful lot cheaper to run than phone networks.

The complexity is shifted to the edge of the network.

Of course there are still a lot of problems such as QOS vs best effort, but the fact of the matter is, VoIP will be cheaper, taxed or untaxed.

Re:Commercial VoIP is a law away from disappearing

[sethx9]

So every web-based business that relies on their customers' Internet access should pitch in and help pay for their customers' Internet access? Amazon and iTunes are to be held fiscally responsible for network traffic? That's ludicrous.

Also, any business is taxed. A portion of those taxes may not be earmarked for support of the infrastructure but they are taxed nonetheless.

I think any new technology which supplants or significantly modifies an existing dominant technology goes through the same set of circumstances and is subject to the same tone of criticism. The bottom line is this: VoIP is being embraced by the public at a very rapid rate and whether it is the startups or the existing media corporations that end up as the major service providers it is we, the consumers, who benefit.

Occassionally we get to vote with our dollars for an emergent technology that signals the beginning of the end of some huge pain in the ass. This is one of those times and I haven't felt so good about spending money in quite awhile.

Re:Commercial VoIP is a law away from disappearing

[WindowlessView]

VoIP companies don't pay taxes and rely on people paying their own internet connections.

Yes, but so what? These are legitimate savings. VoIP companies shouldn't have to pay taxes any more than any other service that moves data around since, ultimately, voice is just a form of data. If your justification is bandwith then there are dozens of media services (e.g. music and movie downloads) that suck up bandwidth. If it comes down to it, maybe the internet goes the metered route. Or just builds itself more capacity since there is now a commercial justification.

Much of what ILECs are paying taxes on are for the last mile monopoly: the poles, property, central offices, etc., need to support their infrastructure. If you are getting broadband over cable you are already paying for the connection and associated taxes via the cable bill. What is really going on here is consolodation to one pipe. As consumers we have eliminated the need to pay for that second (expensive) pipe. If you don't need the redundancy, this is a good thing.

apart from the cost of calls, there are precious few technological advantages in placing VoIP calls instead of normal phone calls

No, this is just plain wrong.

You have all the advantages of an intelligent IP network versus a static circuit phone system. These advantages might not be apparent yet but they will come in time.

With IP you have the capability of putting intelligent end devices on the network and pushing things off to the edge. Can your POTS phone call your brother's computer soft phone at college? With IP (and protocols like SIP) VoIP can. And with all the IP addressable devices coming down the road it is not unlikely a little java app in your IP phone can automatically ring up your car and get it warm in the winter.

On the other end, IP makes far more telephony services available to service providers. Standard basic services like caller id will be shown to be the dinosaurs that they are.

In all cases, VoIP companies die.

I see it the other ways around. I think you are correct that the traditional phone companies will whine to the government to bail their asses out with poorly justified regulations and appeal to its greed for lost tax revenue. Maybe that will fly, maybe it won't. My guess is that the outcome will be determined by how loud the VoIP companies can make their cases in the popular press. Since they are starting to get some converage now I think they stand an increasing good chance.

Where's the talk about the regulatory mess?

[davidstrauss]

While the technical side of VoIP seems rather solid, traditional telcos are making VoIP startups face stiff regulation. As the article says about the technical hurdles being a necessity to overcome for widespread adoption, I see the potential regulatory mess as just as significant of a hurdle, yet the article largely ignores this pitfall for many markets. I don't want to sign up for service today that may face steep service charge increases due to successful lobbying by traditional telcos. I'm keeping my exclusively mobile line.

Rah, Rah Vonage

[Gnascher]

Been trying out Vonage for over a week now. So far, I haven't a single complaint. Call quality has been excellent, my only complaint being that it is a bit louder than my land line. All the free included features are very nice.

The coolest thing, however is being able to retreive my voicemail from the web ... or have them delivered to my Email inbox as a .wav file!

I got fed up with the fact that I still have a charge on my Verizon phone bill for "Touch Tone Service", and that high-tech features such as "Call Waiting" still have to cost between 4 and 6 dollars!!! Not to mention the slew of taxes and fees that bloat out the monthly nut...

Hopefully this threat of real competition will revolutionize the telecom industry. ...or even better, sink the baby-bells into a pit of despair!

Vonage not for New Zealand

[sidney]

it really came in useful is last month, when we moved to Wellington New Zealand

I've also moved from US to NZ (Auckland). We pay for bandwidth usage here. Getting DSL from Telecom NZ that is any faster than 128Kbps costs about 20 NZ cents per megabyte usage over a monthly quota. Vonage says they have a bandwidth limiting feature that keeps their usage down to 30kbps in each direction. That translates to 8.7 NZ cents per minute of bandwidth costs in addition to their monthly fees. Paying more monthly to get a higher quota DSL account with Telecom doesn't change the overal lnumbers much.

I call the US using prepaid calling cards from Chi-Tel at 2.8 to 5 NZ cents per minute depending on time of day. I can buy a card in just about any dairy or liquor store in the city.

How does ChiTel do it so cheaply? They use VoIP. Of course they don't have to pay 20 cents a megabyte for the bits they ship back and forth overseas.

I think this shows how fragile Vonage's business model may be, while still demonstrating the impact of VoIP technology. As some other posters have mentioned, Vonage may have found a niche that happens to exist right now, but that could change as the details of pricing structures, taxes, and regulatory laws change.

US Military overseas

[kruczkowski]

Hey VoIP companies!

If you guys want a lot of subscibers, why don't you ship your units to APO and FPO address? There are a LOT of families overseas that have broadband and would LOVE to sign up for service like this. I personaly have tried to call Vonage but they will not ship to APO.

BTW: Vonage has it's call center in India.

Number portability question

[iwrigley]

A question: I know that I can transfer my landline number to Vonage. But if I'm not happy with the service, or if something happens to the company, can I transfer a number *from* Vonage *to* a POTS company? Anyone know? (Their Web site is silent on the issue...)