The 411 on VoIP

Certain business owners should think twice before switching from traditional phone lines to VoIP (voice over Internet Protocol) service, which transmits calls over broadband. Local telephone-technology experts say that VoIP's lower-cost, flat rates will significantly benefit companies with a high volume of long-distance calls. Because it can be more unreliable than traditional phone service, however, it might not make sense for smaller businesses.

VoIP service rings and has a dial tone just like any other telephone, but calls are routed over the Internet. Unlike traditional analog telephone signals, VoIP digitizes the speaker's voice and sends it through either cable or DSL broadband Internet connections by way of an adapter connected to the phone.

For residential VoIP service, providers including AT&T, Embarq and Vonage charge a monthly fee of $25 to $40, which covers unlimited nationwide (and in some cases international) calls. Business packages involving several lines might come with a higher price-and have large upfront investments and

hidden costs.

Rob Keljik, a sales engineer at HSI Inc., a business telephone systems company in Fort Myers that installs both VoIP and traditional systems, says a company's Internet bandwidth might have to be upgraded to handle the VoIP system, and those costs might not be worth it unless the business makes an exceptionally large number of long-distance calls.

"So now you're paying more for a quality bandwidth to try and compensate for your IP trunk. That is [fine] if you are making hundreds of dollars or even thousands of dollars a month in long-distance calls," he says, but many businesses don't.

In fact, he says, 85 percent of local businesses would be better served by sticking with the local telephone service. The cost of traditional long-distance service has been steadily dropping, so it makes sense to shop around and look for companies that offer deals to businesses that make bulk calls.

Other disadvantages are that VoIP calls can sound murky when materials are being downloaded, and the service can go down completely if the Internet service crashes.

John Renosis, an owner and vice president of Aztec Communications in Naples, a firm that installs and services telephone systems for businesses, agrees that it doesn't make sense for most businesses to invest in the VoIP system.

"You're kind of putting all your eggs in one basket," he says. At a company that has 24 people and one switch or router for the VoIP service, "if you lose that one switch or router, you have 24 people dead in the water." One alternative he suggests is a company such as US LEC Communications, which offers plans with heavily discounted rates for businesses that make a lot of long-distance calls.

Some local businesses, however, can well be served by VoIP.

Marc Farron, vice president of Kent Technologies in Bonita Springs, says that it can benefit people with home-based businesses, such as real estate agents.

Kent Technologies itself uses a Cisco VoIP system, which carries "voice, video and data" between its two offices in Naples and one in Fort Myers. Between offices, "it's an internal phone call," he says. "Once I call outside the system, it goes through a public switch telephone network," and long-distance calls are still long-distance calls, subject to the same fees.

VoIP can save money for organizations with offices in different cities, such as Hodges University (formerly International College). It spent tens of thousands of dollars a few years ago to install a VoIP system to save money on calls between its offices in Naples and Fort Myers.

"Obviously, we have a lot of people calling between campuses, and they were getting hit with long-distance charges every time," says Michael O'Brien, a technology specialist with the university, which is saving $10,000 to $15,000 on a yearly basis.

Hodges' VoIP is carried through an Intranet, an internal Internet system. To users, phones within the system, even in different cities, are the same as extensions in a traditional phone system.

Because of the upfront investment, O'Brien shares the opinion that VoIP service is best for companies with a large volume of long-distance calls between offices.

"You definitely have to make sure you have a big enough pipeline [for the VoIP system], enough bandwidth, to do this. I had a circuit already [transmitting data] between Naples and Fort Myers. I doubled the bandwidth of the circuit knowing all of the [office] calls would be going over the line," he says.