Voice over IP is not the newest trend in computing, but many analysts in the tech industry have predicted that 2004 will be the year the technology becomes mainstream. Voice over IP is fancy way of saying that you're sending voice from one computer to another probably over the Internet so that another person, anywhere in the world, can hear you.
Skype was created by some of the same people behind the popular filesharing program Kazaa. Skype is not as controversial, because no copyrighted material is involved. Still, some traditional phone companies see Voice over IP as a threat, because it holds the possibility of free global communication. For that same reason, many other businesses see it as an opportunity.
Skype and programs like it are primarily set up to allow computer to computer communication. But over the last few years, products companies like Net2Phone allowed computer users to actually talk with someone who was simply using a regular telephone. For a while some services offered free long-distance PC-to-phone calls using this method.
But placing Voice over IP telephone calls through a computer is a little more complicated than simply picking up your phone and punching in a few numbers. You usually have to hook up a microphone and headphones to your computer and then configure whatever Voice over IP software you install to run correctly.
In an effort to be more user-friendly, companies like Vonage have developed special phone adapters that allow anyone with an Internet connection to use Voice over IP technology with their regular phone and make calls as they normally would.
Company CEO Jeffrey Citron adds that the service still offers far more flexibility than the local phone company can provide. "One of the great advantages of Voice over IP is that is separates geography from the service. For example a user in the United States or anywhere [can] sign up for a phone number from anywhere within the United States. That number is then pointed at a little adapter that you can use with a standard telephone. You can take that device with you anywhere you go in the world, plug it into the Internet and all of a sudden you have service. So you could be sitting there with a New York City phone number in New York, California, London, Switzerland or Hong Kong. And when people dial your New York City phone number poof it just rings where you are. You just talk to them," he says.
Another big advantage of taking that New York City phone number anywhere in the world is that you can make calls back to the United States and not pay any international long distance charges.
The Vonage service is primarily aimed at individuals and small business owners in the United States. Other companies have developed Voice over IP products for the needs of larger businesses.
Digium makes relatively low-cost hardware that can turn an ordinary PC into a professional phone system capable of handling approximately 100 calls at a time. These business phone systems are called PBXs or Public Branch Exchange systems. Digium powers its hardware with a Voice over IP software program called Asterisk, written by company founder and president, Mark Spencer.
"It supports voicemail and conferencing, which are a little bit more high-end features. Then it has things that conventional PBXs just don't have any concept of, like being able to check your voicemail over the web, or being able to login to your PBX and see the active states of calls visually or use a program running on the PC to actually transfer calls visually and see who's on the phone and who isn't and so on," he says.
Because Asterisk is free and open-source software, meaning that anyone can change and adapt it, Mr. Spencer say it's encouraging new developments in the telecommunications world from new Voice over IP businesses, to new technologies.
The FBI and the U.S. Justice Department aren't pleased with some of those new possibilities. For example, Asterisk can enable fully-encrypted voice communication. Law enforcement agencies are concerned that criminals might use computer encryption to prevent agents from monitoring their conversations.
Other hurdles may lie ahead for the Voice over IP industry. Although it's now a free and unregulated service in most of the world, the United States and other countries are trying to determine how they might regulate or tax calls placed on the Internet. Some countries have even tried to ban Voice over IP.
And on the practical side, Voice over IP has a big disadvantage. Unlike traditional telephones, which usually function even if the electricity is out, Voice over IP won't work unless your equipment has power and your Internet connection is working properly.
Whether or not Voice over IP becomes a mainstream technology, it has already changed the U.S. telephone industry. Because of its low cost and flexibility, traditional phone companies have lowered their prices in order to stay competitive and consumers have reaped the benefits.