How long will VoIP be free?

VOICE OVER IP (VoIP), packaging voice into digital packets for delivery over the Internet, has been around for years, but has only recently started to gain momentum. The latest use for VoIP is to make calls via Wi-Fi devices. Because VoIP uses the Internet instead of phone lines, VoIP callers avoid the charges that come with traditional circuit-switched telephone service. Despite the potential of low-cost phone calls, VoIP adoption has been slow for a couple of reasons. First, the bandwidth required to carry VoIP traffic has only become common place in the last year or two. Second, although the technology is improving, VoIP calls aren't nearly as clear as calls via traditional wired telephone, or even wireless, connections.

Now, VoIP faces a new challenge: possible federal and state regulation. The FCC is considering regulations similar to those it imposes on traditional phone companies. Several other states are drafting IP telephony regulations; furthest along is Minnesota, which has ordered Vonage, a leading Internet calling provider, to apply for certification as a phone company and submit a list of its prices as well as a 911 emergency phone plan.

Traditional phone companies consider VoIP operators such as Vonage a serious threat and have been arguing to the FCC that they should be subject to the same rules and regulations traditional phone companies deal with. VoIP operators, and their grassroots supporters, argue that because VoIP doesn't use the public switched telephone network, VoIP operators shouldn't be considered telecommunications companies.

For more information on VoIP, go to http://Advisor.com/doc/11547, or see John Vacca's article on page 28 of the February issue of MOBILE BUSINESS ADVISOR.