Voice over IP is moving on up. Look out for it soon.

From http://www.mlive.com/news/aanews/index.ssf?/base/news-9/1090248426137830.xml

AT&T last week launched a "voice over Internet protocol" phone service - known as VOIP - which will allow area residents to make local and long-distance calls via a high-speed Internet connection. The telecommunications firm opened up service in 100 markets across country, including the Ann Arbor, Flint and Detroit areas. Locally available to homes in the 734 area code, the technology acts as a go-between for phones and high-speed Internet signals, translating voices into data and connecting calls through the traditional telephone grid.

So far, VOIP has been mainly a boutique innovation, enjoyed primarily by technophiles. But it may not be limited to geeks for long. Phone giant SBC Communications and cable titan Comcast are both testing versions of VOIP, which may add another twist to the already intertwined and highly competitive telecommunications industry.

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"VOIP has the potential to do for voice communications what DVDs did for movies," said Michael Pruyn, a spokesman for AT&T in describing its product, dubbed CallVantage.

Working out the kinks

Pruyn said CallVantage gives users options such as the ability to listen to their voice messages from any computer with a rapid Internet connection, block out certain calls, or forward calls to just about any phone.

But even AT&T acknowledges the technology's shortcomings. Consumers first need to have a high-speed connection, which is roughly 10 to 30 times faster than a dial-up Internet line. The primary suppliers of high-speed Internet in the region are also competitors: SBC and Comcast, which charge roughly $30 to $45 for the service per month, respectively.

Comcast is now test marketing VOIP subscriptions to consumers in its home city of Philadelphia, as well as Indianapolis and Springfield, Mass. Local spokesman Jerome Espy said the cable company's version will be more advanced than AT&T's service when it is released sometime between 2005 and 2006.

"Once the technology is fully rolled out, you'll be able to get your voice mails on your TV and hear your e-mails on the phone," Espy said.

At the same time, Comcast has been competing to supply local and long-distance telephone service, which flows through cable lines.

Technically, SBC and other companies already provide VOIP when bundling phone and Internet services into a single line, mostly for use by offices and other businesses with multiple lines. SBC spokeswoman Jody Lau said the company also is testing a residential VOIP concept for its digital subscriber lines, or DSL. The company has not yet formulated a consumer product, however.

Lau said it's unclear if residential users will be willing to pay for both high-speed Internet and VOIP, which combined can reach $80 a month.

"What we're finding right now is customers are really focused on the best price," Lau said. "What's on the market right now really doesn't offer a significant cost reduction for most consumers unless they're making a high number of international calls."

AT&T is offering a six-month rate of $19.99 a month, which jumps to $34.99 per month after that.

Regulatory concerns

Communications companies may see a market for VOIP, but Michigan utility regulators are still uncertain how the business should be governed, if at all. The Michigan Public Service Commission, which monitors local phone service providers, has no authority over Internet suppliers. MPSC spokeswoman Judy Palnau said the Federal Communications Commission is also investigating if the new technology needs sanctions or guidelines.

"This is an issue very much out there," Palnau said. "Many of the state commissions are taking a look at how this will affect them."

SBC, Comcast and AT&T all oppose any federal or state regulation.

The technology also faces other issues, including its inability to connect emergency calls directly to 911. If a VOIP user tries to dial 911, the call is routed to a third party switchboard operator who in turn routes the call to a local emergency response center, Pruyn said.

It's unclear how many other Michigan phone/Internet firms may be planning to unveil Internet phone service, said Jerry Finefrock, chairman of the Competitive Local Exchange Company Association of Michigan.

"Grandma probably is not going to be a good candidate for it. It may very well be 10 years before we see voice over IP truly mainstream," said Finefrock, who founded LDMI Telecommunications, a Southfield-based firm, and is its vice president of regulatory affairs.

"The technologists are still experimenting to get the product just right," he said. "We'll get there, but I think it's going to take longer than a lot of people suspect."

Scott Anderson can be reached at

or at (734) 994-6843.