VoIP is gaining popularity and for a good reason. It is cheap and reliable. With companies such as Vonage and Packet8 leading the way it is surely be in every household and business within the next ten years.

Loud and clear over the Internet
After a week of VoIP phone service, a writer gives it a thumbs up. Her editor might think otherwise.
September 28, 2004: 11:41 AM EDT
By Sarah Max, CNN/Money senior writer
SALEM, Ore. (CNN/Money) – When it comes to phone service, I'm cheap.
I've tried every trick, from calling cards to cell phones, to save on communication costs. Poor reception or inconvenience always brings me back to old-fashioned phone service.
So when my husband suggested I look into Internet phone service during a recent move, I was intrigued by yet another possibility to save on my phone bill but skeptical.

A handful of companies, including AT&T and Verizon, now offer voice over Internet protocol, or VoIP. To connect to the service, you plug your regular old phone into a telephone adapter connected to your cable or DSL modem. You make and receive calls as you would on a regular phone, the only difference being that calls travel over the Internet instead of over a phone line. (See "Are you ready for Net phone?")

I decided to try Vonage (pronounced vahn-age), which is the largest in this niche industry with 260,000 phone lines running through its service.

Good first impression
Saving money was my primary motivation for trying VoIP, which in my case costs $29.99 for unlimited local, toll and long distance calls on my work line and $14.99 for 500 minutes on my home line.

But I was also drawn to other cool options that are included in the price.

For starters, you can choose an area code in most any market, regardless of your location, or transfer an existing number, assuming your old number is in an area code available through Vonage.

Conceivably, I could have a New York area code, even though I telecommute from Oregon. For $4.99 a month, I could have a number in Oregon and a virtual number in New York, or vice versa.

Internet voice
Broadband phone (a.ka. VoIP) costs less than landline service and includes every feature you could want. Here's what you'll pay for unlimited local, toll and long-distance calls. Telephone adapters are included in the price, but you'll pay for shipping.

Provider Cost
AT&T Call Vanage $19.99 for the first six months, then $34.99 a month. No activation fee.
Broadvoice $19.95 a month plus $39.95 activation fee. You'll need a router to use your computer and phone at the same time.
Packet8 $19.95 a month plus $29.95 activation fee. Router needed to use phone and Internet at the same time.
Verizon VoiceWing $34.95 for first six months, then $39.95, plus $39.95 activation fee. Router needed to talk and use the Net at the same time.
Vonage $29.99 a month plus $29.99 activation fee.

Or, if I wanted to telecommute from, say, the French Rivera, I could plug my telephone adapter into a broadband connection there and make calls and receive calls as if I were stateside. My editor would never know.

I decided to stay in the country and skip the New York area code. So I ended up with new numbers in the 503 area code.

To activate my account and get a free telephone adapter -- which arrived a week after my order -- I paid a $29.99 activation fee per account and $9.95 for shipping. Not bad considering that it would have taken at least a week to set up local phone service and would have cost about $90 for installation.

Voicemail, call waiting, forwarding and hunting are among the many features wrapped into the monthly fee. Other providers, including AT&T, BroadVoice, Packet8 and Verizon VoiceWing, have a similar menu of options and price points.

"The biggest advantage we have is we're the only carrier that gives priority to voice," said Gary Morgenstern of AT&T Call Vantage, which was introduced in March and is in 173 markets and more than 200 area codes. "We'll slow down Internet transfer so you have clear calls."

AT&T's welcome package includes a wiring guide with instructions on connecting all of the telephone jacks in your house to your VoIP line. My low-tech solution was to buy a cordless phone with two handsets.

Getting a dial tone
I was pretty shocked when just a few minutes after unpacking my telephone adapter and registering my Vonage account I actually had a dial tone. I tested a few calls on my coworkers and family, who said I sounded just as clear as on my landline and significantly more clear than on my cell phone.

During my first week of service, however, I did stumble on some glitches.

When I called a local 800 number, for example, I was connected with a call center in New Jersey, where Vonage happens to be based. Even though I have a 503 area code, the 800 system I called sent me to the other side of the country. When I called that same number from my local cell phone, I was connected with the appropriate, nearby call center.

To that end, 911 calls won't work until you register your location with your VoIP service. (If you have an alarm system, by the way, you may still need a telephone line to connect your system with your security company.)

Dropped calls were also a bit of a problem. Just ask my editor, who was on the receiving end of two of them last week.

"It's often because of a problem with the connection near your house," Vonage spokesman Carlos Arcila explained.

Considering that I made and received dozens of calls last week and, according to my real-time call log, was on the phone more than 600 minutes, a total of four dropped calls isn't terrible. Just in case the service goes down for an extended period, I registered my cell phone under the "network availability" section of Vonage's site. If the Internet is down in my area, calls will be routed to that line.

What about sound quality? So far, no delays or patchy conversations.

I did hear a loud knocking sound during one conversation, but that may have been my brain screaming out for more coffee.