VOIP Phone Systems – They Talk a Good Game But Can They Deliver

By Gerry Morris

This month I’m going to talk about voice over IP phone systems. (VOIP). Basically, a VOIP phone system converts sound to digital format, transmits the digital information over the Internet, and changes it back to analogue sound at the other end. The system may use a computer microphone and speaker as its means of input and output (such as Skype found at www.skype.com) or it may use standard or specially adapted ordinary telephones. Systems adapted for more or less ordinary business and home use are assigned phone numbers just like ordinary land lines and cellular phones and can call out to any other telephone number whether VOIP or standard. The systems that use ordinary phones are intended to replace traditional land line phones.

VOIP for business is catching on fast. The major Internet and telecommunications players, such as AT & T and Sprint, offer sophisticated systems on plans which include providing the Internet connection as well as the phone equipment. Since the quality of the sound is largely dependent on the speed and dependability of the Internet connection, for large offices using a provider that includes ISP service is a good idea. However, there is an interesting low cost alternative for the small to mid-size office.

One VOIP vender, Packet8, (www.packet8.net) offers a system loaded with features at a reasonable price. Packet8’s Virtual Office system offers something called “hosted PBX” which means that at the equipment that routes calls within the system belongs to Packet8 rather than you. Of course, that means you don’t have to buy it or provide space for it. The Virtual Office system also includes the “Automated Attendant” service which is a front end caller greeting and menu system that guides the caller to the correct extension. Like other phone systems the incoming calls can also be answered by a live attendant.

The Virtual Office uses phones specially designed for VOIP. They contain all the features found on most business phones including 3-way conferencing, call forwarding, caller ID, etc. (See the web site for a full list of features). The Virtual Office system requires a minimum of three phones. There is a one time start –up cost of about $150 and a monthly charge of about $40 per phone. Unlimited long distance to the United States and Canada is included. Rates to other countries are relatively low. For that price you get the PBX and voicemail functions that would take thousands of dollars worth of equipment to install in your office for a traditional phone system.

Perhaps one of the more useful features of the Packet8 VOIP system is that the phone associated with a particular system can be located anywhere in the United States where there is a high speed Internet connection. For instance, you could have a phone in an office in another city or at home and the system will find it and route calls to it just like the other extensions. Each phone has a unique direct dial number as well as an assigned extension number on the system so an extension can receive outside calls directly or via transfer from another extension. Also, since the installation of a phone basically amounts to plugging it into a power outlet and into a high speed Internet connection, a phone can be easily moved from location to location.

So why would you want Packet8 VOIP as opposed to a standard telephone system? Probably the biggest reason is lower cost of ownership and service. The startup costs are a drop in the bucket compared to purchasing a traditional phone system. To the monthly charges stated above you must add in the cost of an Internet connection. However, since the quality of the sound depends on the speed of the service, a low end DSL service probably won’t do. Cable ISP’s offer much higher speeds both upstream and downstream. You can probably count on spending around $100 per month to get a suitably fast connection. Accordingly, the total monthly charges for the basic phone system may not be much less if any than, say, four incoming standard lines. But, with VOIP, long distance is free. If you spend even $50-$100 per month on long distance, the savings add up. Most of us probably pay in excess of that per month for long distance.

With those savings why wouldn’t you want VOIP? The knock on early VOIP was that the sound quality was roughly that of two tin cans and a string. Also, there was also a problem with “packet loss” meaning that chunks of data and therefore segments of sound simply didn’t make it over the Internet to the other phone. The result was choppy sound. The technology has come a long way in recent years, but, those of us who tested it early on have reason to be skeptical. The major players in the market have addressed the quality problem by offering dedicated Internet Connections for VOIP allowing them to control the data routing to avoid bottlenecks. These services are pricey. (You’ll have to call Sprint or AT & T to get a quote). With Packet8, it’s up to you to select a reliable ISP. Another minor drawback with Packet8 is that, at least for now, the service doesn’t support fax lines. An alternative to a traditional land line for faxes is one of the email fax services. These services (i.e. www.efax.com; www.myfax.com) assign subscribers a regular telephone number to receive faxes. (This can be a toll free number). The fax is then emailed to a designated email address in a graphics file format. Several of my colleagues that travel extensively prefer this type of service to a stand alone fax machine.

As I’ve said before, I won’t write about a product unless I’ve used it or know someone who has. I have a colleague who has just installed the Packet8 system in his law office. So far he is pleased. His ISP is a cable provider and the quality of the sound is excellent. His practice requires him to make quite a number of long distance calls so the savings for him are significant. He also has a staff member that works part time from home. She has an extension phone there and answers incoming calls during her work hours. She can then transfer the calls to the appropriate extension across town just as if they were in the next room. However, before I can recommend the product I’m going to follow his experience with it for six months or so. If his reports continue to be positive, Packet8 may be my next phone system.

I am interested in hearing about your experiences with VOIP phone systems. I intend to revisit this topic in the future, so drop me an email and I’ll include your reports in my follow-up.

E. G. “Gerry” Morris is a solo practitioner and has practiced law for over 27 years in Austin, Texas. He is certified as a Criminal Law Specialist by the Texas Board of Legal Specialization. His firm web site is at www.egmlaw.com. Email your comments and questions to Gerry at tech@egmlaw.com .