Calling via Internet has suddenly arrived

Use of the Internet for local and long-distance telephony has started to become mainstream in the United States in the last year and a half. Until recently, Voice over Internet Protocol (VoIP) technology did not offer the same sound quality and reliability as landline phones, but recent advances have allowed start-ups such as Vonage to offer services competitive with the regional Bells. A broadband connection is required, which leads some analysts to believe that the cable industry could wrestle up to 20% of the market share away from the Bells through cross-promotion and bundling. Since the VoIP infrastructure is more cost-efficient, several companies have invested in private networks to significantly reduce that expense, with some cutting their phone costs in half. The technology does face the challenge of requiring subscribers to register for 911 services, since their phone number will not appear automatically to emergency call centres. VoIP providers also avoid paying phone taxes, such as universal service fees, that traditional providers must pay - a situation likely to change in the future.

The number of United States households making Internet calls with standard phones is expected to grow from about 100,000 today to 4 million in 2007, says In-Stat/MDR. The number of cable modem and phone company DSL lines is projected to double to about 40 million in 2007. Within 20 years, nearly all calls will be Net-based, experts say.

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