MM Money

The Pitfalls of VOIP

Excerpt: Nonetheless, VoIP offers some real benefits. If you spend a lot of time on long distance, for instance, and can accept its shortcomings, you can save money.    News Source

Using your computer and Internet connection to make local and long distance calls has been getting a lot of attention lately. People are enticed by the savings offered by Voice over Internet Protocol (VoIP) and the ability to use a regular telephone. Before you jump on the bandwagon, consider the drawbacks.

Most VoIP providers charge a monthly fee of $20 to $30 for unlimited local and long distance calling anywhere in the U.S., and sometimes Canada. You also receive a host of features that would normally cost extra, such as call forwarding, voice mail, caller ID and call waiting.

There are enhanced features, too. Many providers will forward your voice mail to an e-mail account. There is a super version of call-forwarding that forwards calls to five or so different phones. It will ring them one at a time or all five simultaneously.

Although VoIP is still in its infancy, there are a number of companies providing service, such as AT&T, Packet8, VoicePulse and Vonage. The quality is better than a cell phone and often matches traditional phone service. But there is a potential for dropouts similar to a cell phone.

How to get started
To get started, you'll need a broadband connection such as cable or DSL. That's because your voice is translated into data and takes up some bandwidth.

You can talk on the phone while using the Internet. To do that, you'll need a router. Both the computer and the phone connect to the router. This is no different than networking two or more computers.

The telephone connects to the Internet with an adapter. That is provided for free or a nominal fee by the VoIP provider. The whole thing is not as simple as plugging a phone into a jack, but it's fairly painless.

If you've had the same phone number for 20 years, you probably can keep it. But the process for switching over can take days or, sometimes, weeks. During the transition, you may have two telephones, one connected to the Internet and the other the traditional service. You can make outbound calls on the Internet, but inbound calls will come over the traditional service.

Signing up with a new number has advantages. Most service providers allow you to choose any area code, as long as they have local service there. This way, you can use the area code you live in for your main number and add a second phone number with a different area code for a nominal fee (about $5). This second phone number would ring on the same phone. If you live in Seattle but most of your friends and family live in Chicago, they can call you for free.

The drawbacks
With all of these advantages, there are some serious drawbacks.

Setting up extension phones is difficult. You can connect a cordless telephone to the adapter and then purchase expansion handsets (about $70 each) for use in other rooms. Or, if you want to continue using the phone jacks installed in your house, you can hire an electrician to do some rewiring. Either way, it's an extra expense.

In many cases, Internet connections to 911 are difficult or impossible. You may have to dial the police or fire departments directly.

Also, your home alarm system, TiVo, DirecTV and any other household item that uses a traditional telephone connection might not work. And, if your broadband connection fails or you have a power outage, you will have no telephone service.

Nonetheless, VoIP offers some real benefits. If you spend a lot of time on long distance, for instance, and can accept its shortcomings, you can save money.

More Are Saying It With Plastic: Gift Cards The Holiday Present Of Choice (November 26, 2004)

Use Open Enrollment To Review Health-Insurance Plan (November 25, 2004)

Business Airfares, Down 11%, Might Be Lowest Ever (November 22, 2004)

International Lottery Scams (November 22, 2004)

Bank Machine Dispenses Fake Money - Dec 02, 2004
Account Aggregation: All-In-One Convenience - Dec 01, 2004
A Life Fulfilled - Nov 30, 2004
A Seal Of Good Giving - Nov 28, 2004
More Are Saying It With Plastic: Gift Cards The Holiday Present Of Choice - Nov 26, 2004
Use Open Enrollment To Review Health-Insurance Plan - Nov 25, 2004
Business Airfares, Down 11%, Might Be Lowest Ever - Nov 22, 2004
International Lottery Scams - Nov 22, 2004
Work-at-Home Schemes - Nov 22, 2004
Medical Billing Opportunities: Worth a Second Opinion - Nov 22, 2004
The Lowdown on Chain Letters - Nov 22, 2004
The Bottom Line About Multilevel Marketing Plans - Nov 22, 2004
Get-Rich-Quick & Self-Employment Schemes - Nov 22, 2004
Could 'Biz Opp' Offers Be Out For Your Coffers? - Nov 22, 2004
Costly Coupon Scams - Nov 22, 2004
8 Lottery Winners Who Lost Their Millions - Nov 22, 2004
Ranks of U.S. Millionaires Surge - Nov 16, 2004
What Wal-Mart Knows About Customers' Habits - Nov 14, 2004
How Much Are You Really Worth? - Nov 06, 2004
What the Bush Victory Means for Consumers - Nov 03, 2004