Telecom breakthrough: VoIP: broadband Internet can provide many opportunities for owners to improve their residents' living experiences. One emerging technology, Voice-Over-Internet-Protocol (VoIP), is allowing residents to make phone calls through their Internet connections.

"One ringy-dingy. Two ringy-dingys. A gracious good morning to you. Have I reached the party to whom I am speaking?" says Ernestine (aka Lily Tomlin). Back then, the world of telephone communications was largely run by humans.

Today, Americans--one-third of whom are apartment residents--rely on technology exclusively to meet their voice communications needs. And apartment residents whose communities offer broadband (high-speed) Internet connectivity and sufficient wiring infrastructure will be able to take full advantage of new technology and services, including VoIP.

Something New, Finally

VoIP, which stands for Voice-Over-Internet-Protocol, or Voice-Over-Broadband, is the first technology since cellular phones to transform telephone services and fees. Not long ago, the technology of VoIP did not exist. Few believed it would ever work or have mass appeal. Today, nary a cable or telephone company exists without either already delivering VoIP service or having plans to do so in the near future.

How VoIP Works

There are four things residents need to get started with a VoIP service:

1. A high-speed, broadband Internet connection such as cable modem or DSL service from the local cable or telephone company;

2. A broadband router that will split the Internet connection, allowing a person to talk on the telephone and log onto the Internet at the same time;

3. Any standard telephone; and

4. A telephone converter, which is provided by the VoIP company.

Most everyone with a broadband connection already has items 1 through 3. This leaves the need for a VoIP service provider and a telephone converter.

The magic piece of the puzzle is the converter--the gateway between a standard telephone and the Internet. It compresses a conversation from one end of the line into digital packets, transports it over the Internet mid reassembles it back into the conversation at the receiving end, all in fractions of a second. The person on the receiving end does not need to have anything other than a regular telephone.

Lower Monthly Fees

Lower monthly fees are hallmark advantages of VoIP service. A VoIP phone line is a fraction of the cost of a traditional telephone line. Some VoIP phone service providers offer a line for as low as $9 per month. Most offer a bundied service with unlimited incoming calls and unlimited long distance calls to anyone in the United States or Canada for one small fee. Such plans typically start at $19.95 per month.

Rates are low (for now) because the government has taken a hands-off approach to VoIP phone service providers. Because the calls are carried over the Internet and not the telephone network, the government is not heavily taxing VoIP phone services. Right now the only tax is a federal excise tax of 3 percent.

For example, if a resident were to choose a $19.95 unlimited calling plan, the federal excise tax would be 3 percent of $19.95, or 60 cents. The total bill would be $20.55 per month. This is considerably less than the average bill from many national telephone companies.

Virtual Phone Numbers

When a resident chooses a VoIP phone service provider, the resident will receive a telephone converter. And because the resident's phone number is programmed into the converter, he or she can take the converter wherever the resident travels (in the world), so long as there is access to a high-speed Internet connection. This will allow all calls to appear and be billed as if they are being made from home, removing the need for excessive long-distance charges.

Because the telephone number is based in the converter, there is the option of choosing any area code for the phone number. Some carriers allow more than one phone number in different area codes, called a virtual phone number, for a small additional fee. For example, a person can have one number in a local area code and another phone number with an area code from another city.

By having a virtual phone number in another city where there are perhaps family, clients or branch offices, the individuals calling the VoIP phone will not be assessed long-distance charges. Theirs will be a local call only. And for the ultimate flexibility, both phone numbers will ring the primary VoIP phone wherever it is hooked up to a high-speed Internet connection. As with traditional phone services, VoIP permits call forwarding to a cellular telephone.

Offering 911 Service

The reality of technology is like most things in life. There are advantages and disadvantages. In the case of Vole such disadvantages are:

* VoIP service cannot work in a power outage, as the power supply for the router connected to the broadband connection is gone. However, standard cordless telephones connected to a standard telephone service do not work in a power outage, either.

* Some VoIP providers do not currently offer 911 emergency service. For those who do offer such a service, the home or business address needs to be separately registered to get 911 service.

* Currently, many reports and comments suggest VoIP tends to work better with a cable modem connection than with DSL.

* With small VoIP service providers, the audio quality can be less than optimal. But from market leaders, the quality is usually excellent.

Controversy surrounding VoIP's lack of 911 emergency service has led to at least one high-profile court case. (See sidebar, above.) But even before this case, legislators and regulators were considering requiring VoIP providers to implement 911 capabilities, which could drive up the cost of the services. However, the long, often-tortured experience of wireless carriers forced to deploy federally mandated 911 capabilities is something VoIP developers and service providers hope to avoid. The Federal Communications Commission (FCC) has worked over the past year to find ways to regulate VoIPs, but no announcements are expected until later this year, said Mark Wigfield, FCC spokesman.

According to a December 2004 study by Voice on the Internet Coalition, made up of the industry's 20 leading manufacturers, 60 percent of providers offer 911 service. The remainder plan to fully implement the service this year.

Until then, consumers with this telephone service or those thinking about purchasing it are encouraged to speak with their service provider to determine if they are at risk and what they can do. Property owners entering into agreements with VoIP providers should also examine this issue thoroughly.

Understanding the Impact

One of today's standards for providing a good living experience for residents is providing them easy access to quality cable, telephone and Internet services. This is not just for the sake of watching television, talking on the phone or checking e-mail, but for residents to access cutting-edge technologies and services such as music downloads to iPods, movie downloads, interactive gaming or VoIP.

There are many public and private companies capable of providing these services. As such, owners should continue becoming familiar with the services their residents are seeking and accessing, particularly VoIP. It is important to understand the impact of these technologies on both the community and resident--the advantages and disadvantages.

For now, VoIP technology offers great opportunities for those willing to give it a try. And with the right service provider and a little homework, these opportunities can be extended to property owners, as well.

RELATED ARTICLE: 'Help!' 911.

The issue of not being able to contact 911 dispatchers over a VoIP service is not a minor one, as is evidenced by a recent lawsuit filed in Texas. A suit was filed in March by the state's attorney general against Vonage, a major provider of VoIP services.

The attorney general's claim holds Vonage to blame for its aggressive advertising and claims that VoIP can replace "traditional" telephone services. Since Vonage customers must take extra steps to register their numbers before 911 services work, the attorney general claims that Vonage's advertising is "misleading, false and confusing" when it advertises VoIP as replacement for traditional phone service.

On Feb. 3, two would-be robbers entered a Houston home, shooting at a young gift's parents. The girl picked up the phone, dialed 911 and heard "Stop, you must dial 911 from another telephone. 911 service is not available from this telephone line. No emergency personnel will be dispatched." She then ran to a neighbor's house to call police, about the same time the robbers were leaving.--L.K.

RELATED ARTICLE: Who offers VoIP?

According to a report last month in The Wall Street Journal, in the past few months, Earthlink, Time Warner, America Online and others have announced plans to roll out or expand their VoIP offerings. America Online said it will provide this phone service to customers by early May while Earthlink, the country's third-largest Internet service provider, has rolled out a free phone service for its high-speed Internet subscribers. United Online said it would provide Internet-based phone service this year and BellSouth plans to do so in early 2006. Telkonet's powerline Internet connection product supports VoIP technology.

NSC Members Who Provide Telecommunications Services

Airimba Wireless Inc.

214/413-3220

BellSouth Residential Solutions

866/287/1274 * www.bellsouth.com

Comcast Cable Communications Inc.

215/320-7974

www.Comcast.com

Cox Communications 

404/269-7368 * www.cox.com

Minol

888/766-1253

www.minolusa.com

Telkonet Inc.

410/897-5900

www.telkonet.com

Time Warner Connect

303/705-4570 * www.twcable.com

Verizon Avenue

800/245-6972 www.verizon.com/avenue

Larry Kessler is an apartment industry advisor on technologies, regulations, wiring infrastructure, contract negotiations, broadband Internet and digital video services. He can be reached at 843/884-1101 Ext. 11. He recently wrote about satellite dish installation in the December 2004 issue of UNITS.