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More consumers are dialing up phone service over the Internet Web Posted: 01/03/2005 12:00 AM CST Sanford Nowlin Express-News Business Writer When stock analyst Frank Wagner decided to try Vonage, a low-cost provider of phone service over the Internet, his interest went beyond saving money on his monthly bill. He was curious whether the upstart Vonage could pose a serious challenge to phone giant SBC Communications Inc., the San Antonio-based company he watches closely. Within two weeks of using Vonage, Wagner not only was sold on the $24.99 a month service, he saw first-hand that Vonage's high-tech calling plan presented a competitive threat. The value and the quality convinced him a year ago he should disconnect the SBC line at his San Antonio home, and he's used Vonage ever since. 'I still have my original phone number, and I pay a considerable amount less per month,' said Wagner, who uses Vonage over his high-speed Internet connection. 'We were paying about $60 a month for unlimited long distance calling with SBC, and now we're paying about $25.' By some estimates, there are more than 300 companies like Vonage, based in Edison, N.J., that use a technology called VoIP, or Voice over Internet Protocol, to route phone calls over the Internet. Many are small operations with just a handful of users, but several are beginning to make serious inroads into the consumer market. Time Warner Cable began offering phone service locally this summer using VoIP, and SBC said it will introduce Internet-based phone service for consumers in a few months. With VoIP, phone conversations are turned into small 'packets' of Internet data and carried through cyberspace much like an e-mail, allowing them to bypass the traditional phone networks. They're then reassembled at the other end with little discernable difference in quality from a conventional call. Internet switching is efficient and inexpensive, meaning providers can offer users local service and
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