Will the Bell System Survive? A Massive Transfer of Wealth from Bell to VoIP is Underway

Will the Bell System Survive? A Massive Transferby clicking on the person's name. These
of Wealth from Bell to VoIP Is Underway.conveniences not only increase productivity for
The "Internet Revolution" has brought us e-mail,busy people; they're fun and easy to use. And of
the World Wide Web and quick, convenient wayscourse all the features you already use - call
to communicate that we've come to take forwaiting, caller ID, call return, etc. -- are included in
granted. And now it's reached consumers who arethe standard VoIP service.
looking for a more economical, more flexible wayThese factors working together have led market
to talk on the phone. Voice over Internet Protocolresearch firms, including Frost & Sullivan and
(VoIP), also known as Broadband Phone orthe Yankee Group, to predict that consumers
Internet Phone, now allows consumers to useusing VoIP phone service will increase from
their ordinary telephone to talk over the Internetaround one million now to over 18 million by 2007.
at rates 50 to 60 percent below those chargedOther estimates range as high as 30 million by
by the Bell System, and with robust features that2007. Losing 18 to 30 million customers in the
Bell cannot offer.next few years is very likely keeping conventional
The Bell System has been our primary "channel"phone providers awake at night.
for connecting with friends, relatives and businessThe impact of the Internet on communication is
associates for the last 100 years. Yet, in July,pervasive. In July, 2005, the US Congress voted
2004, Michael Powell, the past Chairman of theoverwhelmingly (410 to 20) to reform the Postal
Federal Communications Commission, whichService to save it from a "death spiral" brought
regulates the telephone industry, made thison by rising costs and declining business due to
dramatic statement: "VoIP will irreversibly alter thethe impact of the Internet. The next few years
world of communications. VoIP is the mostshould bring more challenges to the Bell System
significant paradigm shift in the entire history ofas millions of people drop their phone service in
modern communications since the invention of thefavor of the lower cost, richer features and
telephone."convenience of VoIP communication.
Powell was quoted in Forbes Magazine, but whyHow Does VoIP Work?
did he speak about VoIP in such striking terms?VoIP (Voice over Internet Protocol) simply means
For starters, the courts have ruled that VoIP --using your broadband Internet connection -- either
voice services over the Internet -- arecable or DSL -- to speak to anyone in the world
information services, not telecommunicationsover your ordinary home or office telephone. If
services. As such, VoIP is not subject to theyou've never heard of VoIP, you'll be glad to
many taxes, regulatory fees and tariffs thatknow that it lets you make unlimited long distance
Federal, State and local governments have piledcalls using the Internet, instead of your local phone
onto the phone company over the years. Take acompany and the Bell Telephone system circuits.
look at your latest phone bill and you'll see that 30To use VoIP phone service, all you need is a
percent or more of the monthly charge comesbroadband connection to the Internet and an
from these "junk fees." Moving to VOIP phoneinexpensive Analog Telephone Adapter (ATA) -
service eliminates them, except for a trifling 3also known as a "VoIP box" -- a small box about
percent Federal Excise Tax.the size of a paperback book. You plug the VoIP
Second, unlike the phone company, VoIP servicebox into your modem or router, and plug your
providers don't have to install and maintain centralphone into the VoIP box. Pick up the phone and
offices, millions of miles of copper wire and fiberyou've got dial tone. It sounds just like the Bell
optic cable to carry your voice from point toSystem dial tone and it works much the same.
point. The Internet is "already there," just waitingSimply dial the number you want and hear a
to send your voice as a digital packet streamcrystal clear connection to the person at the
alongside other digital traffic. This huge savings onother end. But after that, there's a huge
infrastructure costs, plus the elimination of "junkdifference.
fees" translates into a savings of 50 to 60With VoIP you can call on an unlimited basis
percent per month, every month. A typical $65throughout the USA and Canada with no
per month phone bill usually costs about $25 perrestrictions, no per-minute charges. It's no more
month with VoIP; saving a residential customerexpensive to call across the country than it is to
with a single phone line nearly $500 per year. Forcall across the street. And, you can call
homes with two lines, savings can approach $700internationally at rates as low as 2 cents per
per year.minute. In fact, if your international partner is also
Third, VoIP delivers sophisticated new featuresusing VoIP, you'll have a free call - with no per
the phone company cannot. For example, Find Meminute charges.
service allows you to designate up to five phonesWhat's more, the features you get from the Bell
that will ring in sequence, or simultaneously, to findSystem - either as a bundled package, or that
you when you're out of the office. Enhancedyou pay extra for each month -- are generally
Voicemail lets you listen to voicemail from anyfree with VoIP phones. Call Waiting, Caller ID, Call
web-connected PC or Mac, and to forward themReturn, 3-Way Calling and many others are simply
as email attachments to anyone who might needpart of the VoIP package. VoIP telephone service
to hear the voicemail. A web-based Call Managergives you far more service for far less money
lets you build a list of contacts you can dial simplyeach month.