From...

July 29, 1999
Web posted at: 3:30 p.m. EDT (1930 GMT)

by David Essex

(IDG) -- It's no secret that you can make phone calls over the Internet to save money. PC-based Internet phones have been out for more than four years. What's changed in the past year is the number of access points and the variety of devices from which you can call. You save because you cangenerally use a free local access number to get on the Internet, rather than more expensive long-distance connections over the public switched phone network. There are three ways to make an Internet phone call: PC software, stand-alone Internet phones and calling cards. I tried three of the better products in each category. The bottom line is these things aren't right for most information technology executives, except for gadget lovers and those who travel internationally, where hotel long-distance charges can exceed $10 per minute.

All Internet phones offer savings and some added functions (such as e-mail and voice-mail access) at a significant detriment to sound quality and convenience. Calling cards, the simplest method, require punching in long access codes and waiting for connections to be made, and they often must be replenished if you've prepaid. PC-to-phone systems usually involve wearing headsets and dialing with a mouse (or installing a PC Card), and self-contained devices must still be connected to a regular phone and can call only other Internet phones. Such devices certainly aren't free. Somewhere along the line, you pay for the IP gateway -- the hardware that converts analog sound into packets of digits -- either on your desk or at a service.

Of the three, PC phones are the best option because once they're set up, they can be used to either call other Internet phones or go through a service to reach regular phones more cheaply than calling cards (Net2Phone Inc. charges only 4.9 cents per minute for domestic calls). You can run them from the same laptop you take on the road.

Analysts and vendors say the technology is rapidly moving behind the scenes into "click-to-talk" buttons on Web sites and other forms of one-to-one communication through Web browsers. Bruce Kasrel, an analyst at Forrester Research Inc. in Cambridge, Mass., predicts the phones will take off only when people don't realize they're using the Internet.

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Alex Winogradoff, a principal analyst at Dataquest in San Jose, says standards need to be adopted and larger telecommunications companies must enter the game before Internet phones will have adequate sound quality, standardized interfaces and the ability to communicate with any phone.

Eventually, the emphasis will be on value-added features rather than cost savings. "They're not going to give all these features away," Winogradoff says.

I tested the Net2Phone PC phone system, Aplio/Phone, a little box that turns your regular phone into an Internet phone, and AT&T's Connect 'N Save Service, a calling card. I'd pick Net2Phone for its ability to connect with both PC and regular phones cheaply and conveniently.

Net2Phone PC
Net2Phone Inc.
4.9 cents per minute U.S. domestic (15 cents daytime to U.S. from overseas; PC software is free)

Net2Phone made a name for itself by being the first to make PC software that could dial the company's IP gateway hardware, thus providing a link to standard phones.

I tried the PC software on my 400-MHz Pentium II Compaq Deskpro with headphones and a mike that came with a voice-recognition program. The sound quality was rich, like a stereo with the bass turned up, smooth (typical PC sound circuitry is superior to that of standard phones) and nearly on par with Connect 'N Save. However, the on-screen buttons I "pressed" to send touch tones to a company's automated response system didn't register.

Net2Phone also offers a calling card that competes with AT&T's (as do many other vendors, most notably a company called Delta Three Inc.). Card calls were of typical quality, though one call I made to a second line at home had severely clipped speech on the other end. The card, called Net2Phone Direct, uses a widely-available 800 number and charges 7.9 cents per minute -- much less than Connect 'N Save's 800 number.

This one's the winner because of its competitive sound quality, deep discounts and accessibility from more than one calling device.

Aplio/Phone 2.0
Aplio Inc.
$199

Aplio squeezed the necessary PC circuitry into a speakerphone-size device that gets your regular phone out onto the Internet. The result is an Internet phone that's a pain to set up, not too hard to use, but ultimately of narrow appeal -- more for close siblings, college students overseas and corporations with international offices than for busy executives.

Both the caller and person being called must have an Aplio/Phone (or a microphone/headphone-equipped PC running Microsoft Corp.'s NetMeeting or Aplio software), so you can call only select people. Setup consists mostly of using the phone keys to tell the device your user name and password at your Internet service provider. The connection starts with a possibly costly call over regular phone lines (though the device has a "100% free" mode that avoids this by connecting one phone to the Internet while waiting for the other to call and tying up the line in the meantime). Hang up, and a few seconds later, the box rings the phone. Answer, and you're on the Net. I found it easy to make calls both ways once I learned the procedures.

Aplio/Phone has other neat functions, including a Find Me feature to let other Aplio/Phone users locate you if you've connected your box to a different phone number.

I found the Aplio/Phone's volume and sound quality poor, and Internet congestion and transmission problems can prevent connecting altogether, which Aplio does warn you about. It's too much trouble if you make mostly domestic calls to a variety of people.

AT&T Connect 'N Save Service
AT&T Corp.
7.5 cents per minute with local access (15 cents via an 800 number)

AT&T is the only major long-distance company to offer consumers an Internet phone service accessible from regular phones. The company prides itself on using its own IP network rather than the generally poorer-performing public Internet (Net2Phone basically does this, too). I found Connect 'N Save to have the best sound quality, slightly ahead of Net2Phone's and a whole class better than Aplio/Phone's. However, even superior hardware couldn't mask the telltale signs of voice over the Internet: frequent clipping of words, a sort of wiggle in the overall sound and the sensation of talking into a drum.

Connect 'N Save reduces domestic calls to 7.5 cents per minute if you're near a local-access node in one of seven major cities, only a bit less than AT&T's own One-Rate plan (10 cents per minute). If you must use an 800 number, as I did, the cost jumps to 15 cents per minute, still far less than a standard call.

Connect 'N Save is a decent way to save a little money on long-distance calls without giving up much in quality and convenience.