Internet Phone: Smirkingly Cheap

For those who take a special delight in finding a great bargain, Internet telephone service—or Voice Over Internet Protocol (VoIP)—is a no-brainer. For $30 per month or less, there are hordes of Internet-based phone companies out there just dying to help you shirk the shackles of the conventional phone Goliaths, and let you gab till you drop.

Essentially, these upstart service providers can bring you bargain-basement rates by taking advantage of the tremendous reach of the Internet, which can now be used to easily transmit and receive phone calls all over the world. Even better: The unreliable sound quality that used to plague such services is quickly becoming a fading memory. Plus, you’ll find that service providers are taking great pains to help you migrate to Internet phone with minimal agony.

With most plans, all you’ll need are broadband Internet access and an Analog Telephone Adapter (ATA)—which is used to hook a conventional land-line phone to a computer to make Internet calls. (Lucky for you, most providers include an ATA when you sign up for their service.) With an ATA, your phone service will be tethered to a PC. But many users get around that situation by plugging a cordless-phone base to their PC and then placing satellite cordless-phone handsets throughout their homes.

Of course, there’s a downside. Some of the bottom-of-the-barrel Internet phone service providers do not offer a 9-1-1 emergency phone call service. And if your PC goes down, or your electric company pulls an “Enron” on you, you’ll have to consider two cans and a string until those technologies get back online. Still, those drawbacks haven’t stopped millions of users from turning to the Internet and reducing the cost of their monthly local and long-distance phone bills to a few—and often crumply—Alexander Hamiltons. Here’s a sampling of the best the market has to offer right now:

The downside is that you need to be a subscriber to AOL’s basic Internet service to get TotalTalk. That means you’ll need to pay at least $10/month for basic Internet from AOL on top of charges for the TotalTalk phone service.

Most users will probably opt for Total Talk’s $29.99 plan, which offers unlimited calls to anywhere in the U.S. and Canada. For an extra 5 bucks, there are discounts on long-distance calls to other countries. And a less expensive plan, at $18.99/month, features unlimited local calls, with long distance at 4 cents/minute.

One of Vonage’s major advantages is its varied pricing plans. If your current phone sees only modest usage, you may be able to get away with Basic 500 service, which offers 500 minutes of calls to anywhere in the U.S., Canada and Puerto Rico for $14.99/month. For another 10 bucks, you can talk to the same locations forever. Vonage also has a service called Small Business Basic, which gives you 1,500 minutes to the same locations for $39.99, and Small Business Unlimited, featuring unlimited calling to the same locations for $49.99.

Another major advantage with Vonage is that its phone adapter is sold at many brick-and-mortar retailer locations, including Best Buy and Staples. So with this company, you’ll be able to talk face to face with a knowledgeable in-store tech person before plunging into the world of Internet phone. Yet another advantage: Vonage’s phone adapter is so small, you can easily take it with you on a trip and make Vonage calls wirelessly from your laptop. Pretty cool.

The downside of Vonage is that other, lesser-known rivals sometimes offer cheaper rates—although sound quality may not be as good.

Like Vonage, AT&T offers a number of pricing plans—although the deals are not as sweet. Moderate phone users can sign on for as little as $19.99/month, which gets you unlimited local calling only. If you want to keep in touch with your Aunt Nellie or anyone else long distance, be ready to pony up 4 cents/minute. Bump up your commitment to $29.99/month, and you can make unlimited calls throughout the U.S. and Canada and see a 50% savings over AT&T rates to other countries. Meanwhile, AT&T’s Big Kahuna $49.99/month offering—AT&T CallVantage Small Office Plan—gives you unlimited calling in the U.S. and Canada, as well as a second line with an additional 500 minutes/month that you can use for faxing.

As with Vonage, the downside here is that the service is pricey compared to some others. And as with Vonage, few offer the sound clarity of AT&T.