It has been predicted that the voice over Internet protocol (VoIP) market is in the early stages of dramatic growth, but VoIP needs a compelling reason for use if its proponents expect the technology to have a lasting effect. For the home, the major advantage appears to be reduced phone cost.

VoIP is a set of Internet standards that allows the user's voice to be converted into small packets of digital data that can be sent over computer networks.

At the receiving end, VoIP computers reassemble the data packets back into a standard audio signal that can be heard like a regular telephone line. A broadband connection, such as a cable modem, cable or satellite Internet, T-1 or DSL, is required at the residence.

Residential convergence and concerns

Convergence means combining voice and data services over a local area network (LAN). This enables telephones and computers to share common networking hardware. A converged infrastructure in a residence provides efficient telephone system use, just as it would in a corporation. For a small office, convergence can lead to increased productivity. Also, home offices can be linked to remote locations, which can result in long-distance savings.

More homeowners might take an interest in VoIP if service providers offered attractive plans and universal local number portability (LNP). LNP means allowing homeowners to transfer an existing phone number to the new service. Some providers offer LNP, others do not.

Quality of service is another concern. Homeowners should get a demo account for their VoIP service and test the voice quality to see if it is satisfactory. Also, find out what a provider has for equipment and what you will need. Do not forget to ask if telephone service in the event of a power failure-or continuity-is guaranteed. Some lack of continuity solutions include the following:

°Installing a separate uninterruptible power supply (UPS). There are many options on the market that will cover you for a short or extended time.

°A back-up battery built into the network gateway.

°Have calls forwarded to where the power outage is not a problem. The phone service has to automatically forward all calls to a designated phone if power goes out. Consider using a cell phone for this.

Emergency assistance

Some VoIP services may not support E-911 (Enhanced 911), with which emergency services can pinpoint locations when a 911 call is made from a VoIP phone. Some providers see this as extremely important, while others focus on cost savings.

While no firm solution exists, a case pending in the Texas courts may change the situation. In March, Texas Attorney General Greg Abbott filed a lawsuit in Austin against Vonage Holdings, accusing the VoIP provider of “deceptive marketing practices” for failing to warn customers about its limited 911 emergency dialing service.

Abbott, who is seeking $20,000 for each violation under the Texas Deceptive Trade Practices Act, claims that Vonage's marketing materials do not clearly state 911 calls are not included in the VoIP package. After some pressure, Vonage expressed their desire to work with the Texas attorney general's office and reassure them about their service method.

The Federal Communications Commission (FCC) has announced VoIP 911-type services will be federally enforced. The FCC's next step, Phase II, requires wireless carriers provide the caller's location within a defined area.

The final deadline of Dec. 31, 2005, remains firm, although any carrier that does not meet this deadline can seek a waiver. It is highly unlikely the FCC will allow a blanket waiver of this requirement. Find out if your provider plans to meet this requirement.

How to connect

An analog telephone adapter (ATA), a device that connects standard phones to computer or Internet connections, is the simplest VoIP hookup.

Homeowners can use their own broadband phone or get an adapter for an existing phone-to-broadband connection. One option is to make VoIP calls with a PC by adding a wired or wireless headset. Also, sign up with a broadband phone carrier and avoid contracts; you should be able to prepay for the service.

Benefits for the residential user

Compared to traditional phone services, VoIP offers substantial savings; some packages start under $10 a month. Regular local phone service is not necessary for VoIP because the technology is available to anyone with a broadband Internet connection.

If the connection is made through the Internet, the PC does not have to be turned on for access, although a broadband connection must be active. Taxes or fees charged are significantly lower than traditional lines, so get the tax information for your plan.

Benefits for the home office

VoIP allows the small business/home office to take advantage of the capabilities of a large corporate PBX without investing thousands of dollars in long-term contracts, equipment and specialized personnel. They can have the features and flexibility of a major business that also fits their budget.

Other benefits include 1) creating branch office associations with their business to save on phone calling expense; 2) using “on-screen dialing” that lets the user visually manage calls and use telephone features by simply pointing-and-clicking; 3) unlimited voicemail boxes with the option of different messages for different callers; 4) unlimited auto-attendants-for you and your caller-that make a small business look larger than it is (by playing voice messages when selected and by routing calls); and 5) database integration, which allows the user to view caller details, search and locate people, access calling history, or dial from other Windows applications.

There is also the plus of being able to plug in a phone at home and automatically receive office-bound calls where the system integrates with Microsoft Outlook for a phone list of the user's contacts.

VoIP service provides a customized on-screen phone book. Telephone and data services are handled by a single cable to a desk. The service has call detail reporting (CDR) ability, which tracks who makes calls to where, when and for how long. Account codes can also be assigned.

A VoIP network is independent of any other network operating system you may have. If another network crashes, the VoIP solution will continue to deliver voice communications over its network.

Drawbacks for residential use

VoIP does have shortcomings. Not all services are as reliable or clear as traditional phone services, and it lacks emergency reliability.

You may never need 911, but if you have to use it, the exact address and name must be given out. Also, if the Internet connection is lost, the VoIP service is lost, too. In addition, the user must have high-speed Internet access, and quality of service varies among providers and methods.

The advantages of VoIP residential use

The advantage-packet versus circuit switching-is technical. Packet switching allows several calls to occupy the same amount of space just one call occupies in a circuit-switched network. When using the Public Switched Telephone Network (PSTN), a 10-minute call consumes 10 minutes of transmission time.

With VoIP, that same call might use 3.5 minutes. The VoIP call was shorter, took up less space and the VoIP user could have placed more calls to take up the original 6.5 minutes the analog PSTN call took. Data networks already understand packet switching. By moving to this technology, telephone networks immediately gain the ability to communicate in the way in which a computer is accustomed.

An interesting technology twist

A new technology, referred to as voice over WiFi, or VoWiFi, is actually voice over Internet protocol combined with the wireless fidelity (Wi-Fi) standard. One option may be the WISIP phone. This is a type of cordless VoIP phone that uses a Wi-Fi type of cell phone built around Session Initiated Protocol (SIP) that wirelessly accesses the Internet and is a low-cost alternative to the cellular phone.

It also comes bundled with a subscription to the Free World Dialup (FWD) Internet Telephone Service. This can be used in and around the home office for Internet calls or from any public Wi-Fi hotspot.

The value of this technology is limited by finding a Wireless LAN that will authenticate the phones, but the product works for use on home or office Wi-Fi networks where the authentication process can be controlled or at Wi-Fi hotspots that require no authentication.

A lasting effect

The Internet has already changed the way people communicate. It is estimated that more than half a million people are VoIP subscribers and that number is expected to increase. The sale of the ATA, VoIP residential gateways, IP phones and SIP phones could be huge.

Most consumers are keeping their analog phones and adding ATAs to them to make them Internet ready. Providers could also offer optional PSTN connections for backup-then, when VoIP services are backed up and an IP connection interruption renders the VoIP network unusable, calls could be switched to the PSTN.

When a contractor keeps up with VoIP hardware, what the FCC is requiring and what features of a VoIP system could benefit the user/SOHO, they could be an important partner in a retrofit installation or a new home configuration.

Since there is a value to providing the customer with this service, work with vendors to put packages together that fit your customer's needs. Note the packages need to be attractive enough to make homeowners VoIP converts. Contractors could be on the scene supporting builders and homeowners, purchasing the hardware and installing the software.

Although there are still obstacles to overcome, such as E-911 service, low-pricing competition and widespread acceptance, the main issue is letting users know what VoIP is all about and why they might want it.

When the residential VoIP service expands and consumers replace old handsets with new IP sets, the market will be more viable because the incentive for buying will begin with the increase in demand and the decrease in pricing. Remember how digital cameras started? EC

MICHELSON, president of Jackson, Calif.-based Business Communication Services and publisher of the BCS Reports, is an expert in TIA/EIA performance standards. Contact her at www.bcsreports.com or randm@volcano.net.