Why the Web may replace your phone

The earliest VoIP companies were independents, such as Vonage, Packet8, and Voicepulse, which took advantage of the public Internet to connect users. Today, if a cable TV or telephone company provides the VoIP service, much of the connection will be on its proprietary network instead of the Internet, which probably will mean higher quality and reliability, says Lindsay Schroth, an analyst at the Yankee Group, a telecommunications research firm in Boston.

That's because these companies can make sure that VoIP calls get first priority for bandwidth, meaning that the movement of other data won't disrupt them. "If you're able to prioritize, you're going to have better quality," she says.

Unlike a conventional analog phone line, a VoIP phone is knocked out of service if a customer's home has a power outage, a significant drawback. But customers can buy a battery backup to keep their computer and VoIP working during a blackout. Some cable companies may even include the battery pack as part of their VoIP service, Ms. Schroth says.

Another challenge: As VoIP gains popularity, it is likely to come under attack from a unique form of spam: SPIT. That's Spam over Internet Telephones, says Pierce Reid, vice president for marketing at Qovia. Unlike telemarketers, who still have to make individual phone calls, telephone spammers could broadcast their recorded messages instantly to tens of thousands of phones via the Web. Qovia is working on a filter to screen out these unwanted calls.

Cable and phone companies charge a bit more than the independents, about $35 to $40 per month. That's still less than conventional unlimited phone plans.

While the main attraction now is the low price, eventually consumers will be attracted to enhanced VoIP features, Schroth says. For example, VoIP allows customers to pick their area code: If you're living in Seattle but have most of your family and friends in Boston, you could choose a Boston area code, allowing incoming calls to be free to the caller. You could also "port your service" - take your VoIP equipment along to a hotel room or a friend's home equipped with broadband and use it from there.

In the future, features like "find me, follow me" will allow customers to go to a website menu and customize their calls. Only calls from certain designated numbers made to your work phone, for example, would be directed to your home or vacation home. Eventually, VoIP could tie together devices in the home so that when the phone rings, the caller ID feature would display it on your TV or computer.

Despite such prospects, the next few years look rocky for VoIP firms. One big question: Will the government regulate and tax them as it does conventional phone companies or leave them relatively free, as it does with most Internet commerce?

No matter how that question shakes out, consumers will be the eventual winners, says Jeff Kagan, an independent telecommunications analyst. "The drawbacks [to VoIP] are there today, [but] they're going to be going away over the next year or two," he predicts. "Once we get rid of the problems, what we're left with is a [phone] service that costs a lot less."

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