Features to Look For

Unless you are a Skype maven, with lots of Skype-using friends and relatives, we recommend getting a hardware-based service for the best user experience, and the ability to use your existing phone equipment. The following checklist thus focuses on hardware-based systems, but many issues are the same for the software-only products. In addition, check out our buyers guide to basic costs and services for major hardware-based VoIP plans on the next page.

Calling Costs. Most VoIP services offer convenient (and affordable) flat-rate pricing. The VoIP plans sold by cable companies are still a bit pricey, but most are in the $20 to $30 per month range for unlimited local, regional, U.S. and Canadian calls, plus about two or three dollars of taxes and fees. Compare this to about $50 plus about $9 in surcharges and taxes for a similar unlimited plan from a traditional phone company, and youll see savings of up to 50 percent. Taxes and fees may go up for VoIP services in the future, but they are relatively unregulated compared to the Baby Bells and wireless carriers.

Several vendors also offer cheaper $10 to $15 plans with free local and regional calling plus a set number of long-distance minutes (usually 100 to 500). Equivalent landline discount plans would run about $30 to $35 a month including taxes.

VoIP extra-minute rates are typically about 4 cents (some go as high as 7), and international rates are similarly low, but range from 3 cents to over 30 cents a minute depending on the country (and if you are calling a mobile number). What's more, most VoIP vendors let you talk free anywhere in the world to any other subscriber using the same service, no matter what plan you have.

In tallying overall cost savings, keep in mind that many VoIP vendors charge $30 to $40 as an activation fee (which usually includes the adapter), plus $10 to $15 shipping fees, and youll also need a broadband account ($30 to $50 per month) and perhaps a network router if you don't already have one (about $50).

Virtual Phone Numbers. Most VoIP services offer additional cost savings in the form of local long distance numbers from major calling areas in the U.S. or Canada. With a virtual number, you are not tied to your geographic area code. Not only can you get that prestigious area code youve always wanted (or retrieve the one you lost when your calling area was split up), but you can call others in that area code (and they can call you) without paying long-distance charges. Also, cell phone users whose plans demand they pay for receiving calls can receive your "local" calls on the cheap.

Services with local long distance are perfect for use as a spare phone line for people on temporary assignment or those who run up big bills calling remote friends or family members. Some services even let you add a second virtual phone number (usually for $5/month extra), so you dont have to choose between picking a local or remote area code. Check for area code availability before you buy, however, as selections can be limited. The bigger carriers generally offer the most area codes and exchanges.

Portability. Most providers now offer number portability using your current landline number, but only in selected areas. Most VoIP services also let you take your adapter with you anywhere in the world that has broadband service. This can be a boon for business travelers needing to communicate with home and office. Assuming there are no installation hassles (such as a hotel firewall), youll be up and running using the same number. The big exception to portability is if you have DSL Internet access. You'll need to keep your DSL line for broadband, so unless you first get a second DSL line/number, you can't port your current number.

Features. Calling features that may cost a few dollars apiece with your local phone company are usually free with VoIP services. These include Caller ID, call waiting, call forwarding, Do Not Disturb and three-way conferencing. Some services offer more sophisticated call forwarding features, with follow-me features that you can customize for individual phone numbers and situations, so you forward specific callers to certain phones at certain times. Voicemail is typical (although some charge extra), and some services let you forward voice calls to an email address or access it on the Web. Other advanced features include larger conference calls, call screening and filtering, and contact management. Some services let you add a fax line for a low monthly fee.

Service Reliability. Unlike landline phones, VoIP systems won't work in a power outage, nor will they operate during a broadband service outage. If your broadband access is "spikey" your calls may get garbled or lost. The key to good VoIP is good broadband. Similarly, if your VoIP service is out, your 911 service will be too. For emergencies it's probably best to also have a cell phone.

911, 411 and White-Page Listings. Few services support white-page listings or 411 service, but most offer 911 service, thanks to federal requirements. For 911 you'll usually have to use a local area code, rather than a virtual number, and you'll need to either have your physical address on file with the company, or give it to the dispatcher. In addition, the call is likely to take longer to be routed. In many major cities, however, any delays in routing would be minimal compared to the delays waiting for the 911 call to be answered.

Installation Issues. Unlike the telephone jack in your wall, VoIP routers and adapters may need to be rebooted occasionally or require upgraded firmware. In fact, some of you (we wont name names) may have to pay $100 or so for a tech to come in and set it up. The cable companies require an installation visit, which is a hassle for most, but might be welcome to some.

If you have a DSL account linked to an attached phone account, you won't be able to replace the landline account with VoIP unless you're buying your VoIP from your DSL provider. (Verizon says it will let DSL customers replace the attached account with VoiceWing VoIP service.)

Multiple Lines. Since phones must be physically attached to the VoIP converter box, and most boxes only have one phone jack, multiple-line options are limited. Most services only permit one call at a time, and most vendors allow multiple lines only on more expensive business accounts. AT&T, Vonage and Broadvox Direct offer multiple independent lines running through the same broadband line for residential customers.

Multiple Handsets. Another installation issue comes when you want to install multiple handsets around the house. If you have gotten rid of your landline, you can use your existing phone wiring if you disconnect it from the analog phone network at the junction box where it comes into the house (no voltage on the line). But you can only do this if you are not using that wiring for anything else, such as a home security system, TiVo box, or DSL. If using your existing wiring is not an option, the easiest thing to do is to use a cordless system with multiple satellite handsets and plug it directly into your VoIP converter box. Just make sure it is not a 2.4GHz model, which will interfere with your Wi-Fi network.

Wi-Fi Handsets. More and more providers are offering Wi-Fi handsets for use over wireless networks, including Skype, Vonage, BroadVoice and Net2Phone, among others. Unfortunately, almost all only only work on free and open networks, since most lack the built-in Web browsers needed to login at most public hotspots. This limits their usefulness to the home and office, where cordless phones might be a cheaper and simpler alternative. VoIP providers are working on deals with hotspot networks to authenticate their phones, but until that happens we can't really recommend them. A notable exception is Linksys' new VoWi-Fi phone with Web browser, which is based on the SIP standard so it will work with a wide range of providers. And as we mentioned earlier, combination Wi-Fi/cell phones are starting to appear that will let you place calls at Wi-Fi hotspots.

Bandwidth. Most VoIP services use 50 to 90 Kbps of bandwidth both downstream and upstream. Extra throughput wont improve "vocal" quality, but it could improve "session" quality, giving you the cushion to avoid interruptions, lags and other glitches due to service spikes. Make sure your broadband service offers sufficient upstream bandwidth to handle it. Consumer broadband services typically provide between 1 and 4 Mbps downstream capacity, but only 90 to 384 Kbps upstream. When you factor in overhead bandwidth, a 128Kbps upstream connection is the minimum, and if you want to maintain reliability and quality while simultaneously using the Web, youll want at least 256Kbps. If youre already sharing access around the house via a network, 384Kbps might be required. Vonage offers a feature that lets you adjust vocal quality based on available bandwidth.