Phone service via the Internet moving into the mainstream

by  Alan Zisman (c) 2004 First published in Business in Vancouver September 28-October 4, 2004; issue 779, High Tech Office column


When I first got started on the World Wide Web back in 1994 it always impressed people seeing the Virtual Louvre website (still online at www.ibiblio.org/wm/). I later learned it had no connection with the real Louvre, but nevertheless pictures of art were appearing on my computer, all the way from France, with no extra charges for long distance.

That light bulb lit up for a lot of people: the Internet made it possible to make connections halfway around the world for the same price as connecting to a computer down the street. Now all you need is a way to connect your phone to your computer, and goodbye long-distance charges forever.

Early attempts at so-called VoIP (Voice over Internet Protocol) were awkward, marred by poor sound and general geekiness. But lately, VoIP has been making inroads, with companies like Nortel and 3Com allowing large organizations to replace traditional PBX phone systems with cost-saving Internet equivalents.

It's been slower to catch on amongst home and small business users, though Vonage and others are selling plans promising cheap rates and the ability to choose an area code and calling area anywhere you like.

A new service, Skype may prove to be the quickest and easiest way for many to cut loose from the phone companies. Interested? Download the software (for Windows, Linux, Mac OS X and Pocket PC handhelds) from www.skype.com. It's a quick and painless install. To use it, you'll need a microphone attached to your computer.

Most laptops have a tiny pinhole mike somewhere, or you can attach a standard headset with microphone. And you'll need an Internet connection; Skype claims anything from a 33.6 kbs modem will work, though a broadband connection is better.

From your computer, you can "phone" anyone worldwide who is also running Skype for free. In additional to voice, you get text messaging and file transfers. Though you get a virtual dial tone, and ringing on the other end, this is not really a big deal.

More interesting is what Skype refers to as SkypeOut. With this service, from your Skype-running computer you can phone pretty much any land line or cell phone anywhere in the world. Not free, but rates are pretty affordable; Skype's prices are in euros (the company is based in Estonia). You buy 10 euros (or more) credit then make your calls, with charges of about two cents a minute for calls within Canada, the U.S., and the U.K., three cents a minute to call Chinese numbers, etc. Voice quality is surprisingly good. Calls between two computers offer much better fidelity than phone service. The program plays nicely with most home and office firewalls.

The founders of Skype are a pair of Swedish programmers who wrote (but don't own) KaZaa, the most popular of the post-Napster music trading programs. And like that program, Skype relies on peer-to-peer connections; the program runs in the background on your computer even when you're not calling, using some of your network bandwidth and computer processing power to help transmit other people's calls. (If you don't want this, it's easy to turn off the little Skype icon on the Windows system tray when you're finished calling).

It won't totally replace your traditional phone. Standard phone service remains cheaper for local calls. Outsiders still need to call you by phone (unless they're also Skype users). And you can't get 911 on a service that doesn't know where you're located.

But I'm using it for all my long-distance calls. I'm not afraid to look like some kind of geek talking to my computer.