Tech Talk: Telephone? That 's SO 20th Century...

For what the telegraph did to dispatchers, and e-Mail did for letter writing, VoIP appears to be doing to telephone.

VoIP (Voice over Internet Protocol) also known as, Internet telephony, IP telephony, and Internet voice is catching on and is expected to grow in the next few years. The technology has been around for about a decade, but it isn’t till now that we have the supporting technology to handle it and an market reaching critical mass. VoIP uses a broadband Internet line to offer inexpensive calling plans and novel features such as the ability to manage voice mail on a Web page. VoIP is a method for taking analog audio signals, like the kind you hear when you talk on the phone, and turning them into digital data that can be transmitted over the Internet.

VoIP works like e-Mail. TCP/IP networks consist of IP packets with a code for controlling communication and information for transportating data. VoIP uses the IP packets to send the human voice across the Internet using IP packets to its destination.

It digitizes a voice into data packets, sends them through the network and converts them back to voice when arriving at the destination. Digital format can be compressed, routed, and converted to other and better formats.

When calling someone using VoIP, you use a phone with an adapter. Just like we use a telephone to make phone calls on POTS (not "pots", but plain old telephone service), the adapter is a device to connect the phone to the network. The VoIP phone has its own phone number for callers to dial.

The number of consumers bypassing the traditional phone network and opting for Internet voice service is soaring beyond expectations. The latest surveying found 2.7 million subscribers nationwide, compared with just 440,000 a year earlier. That’s an increase of about 600%!

The reasons for making the switch from traditional telephony to VoIP are usually in price. The biggest factors in the numbers are cable TV companies, which are using VoIP to bundle phone service with their TV offerings in hopes of staving off competition from incumbent phone companies that are just beginning to get into the TV business.

VoIP is traditionally one flat-rate, whether local or long-distance. Since the Internet makes no distinction between the location of servers or websites, neither does phone service provided using the same method. Thus, VoIP boasts lower long-distance charges. Other consumers want to bundle their telecommunications, or, have their satellite/digital cable, broadband, and telephone VoIP all bundled together. Some say it saves money, but such consolidation is still new and not yet widely available.

Regardless, though, consumers continue to make the switch. While the revenue generated from VoIP services remained relatively small, at $220 million, it is expected to change quickly, with some strategists forecasting annual VoIP revenue hitting $3 billion in two years.

More information on the technical aspects of the service, and an explanation of how the technology works is available at HowStuffWorks.

Vonage, one of the earliest commercial providers of the service, is by far the largest and considered the best VoIP service. Vonage is estimated to have 750,000 U.S. subscribers, more than three times its level a year ago. Woo Hoo.