Vonage Vs. Cable Companies; Vonage Offers More Options

  Feature Choice Growing For Online Phone Plans; Vonage Vs. Cable Companies; Third-Party Companies Offer More Options , But You'll Need Broadband
 

April 25, 2005

By Mike Angell

Talk about a competitive market. Some 200 companies now offer Internet phone services.

The companies deliver the calls via broadband lines using VoIP, or voice over Internet protocol. By breaking voice into data packets, VoIP offers lower-cost long-distance calling and features not available with regular phone service.

About 1 million people are using VoIP service. And thousands more are signing up each month.

As the technology grows, new users face a quandary: Which provider should they use?

Consumers have two basic choices for getting VoIP service.

One option is a third-party company, such as Vonage.

It delivers phone calls over a broadband connection provided by another firm.

The other option is to work with a cable company, such as Cablevision or Time Warner Cable.

Executives from two of the largest VoIP providers -- Vonage and Time Warner Cable -- say the choice comes down to how many features a customer wants.

Vonage offers more advanced features than cable companies. The VoIP service of cable providers is much more like regular phone service -- though it takes advantage of cheaper VoIP rates.

Both types of companies offer unlimited local and long-distance plans, which is a big selling point for VoIP. Vonage's basic home plan starts at $24.95 a month.

To use it, though, you'll also need to pay for a broadband connection. That costs at least $20 a month.

Time Warner's unlimited plan starts at $40 a month when bundled with other services, such as digital cable and broadband service.

The total packages start as low as $85 a month.

VoIP has all the features available on regular phones, such as caller ID, call waiting and the like.

Plus it offers more Internet-type features like getting voice mail delivered in an e-mail and online call logs.

Time Warner and Vonage have those basic features. Most customers are happy with just that, says Jerry Campbell, Time Warner Cable's vice president of voice service.

"Our customer research shows about eight features are most popular with consumers," he said. "We are much more a replacement for traditional phone service."

Still, Time Warner is looking into additional features, such as a voice search service, where people can ask for certain businesses or services in their area.

Vonage offers more technical VoIP features. For instance, its phone service can work with e-mail programs to call directly from contact lists.

"We want to offer all the features available over VoIP," said Jeffrey Citron, chief executive at Vonage. "Cable companies are just trying to replicate the old telephone network."

You can also take your Vonage phone service on the road. The VoIP adapter, which connects the regular phone to the broadband connection, can be taken to any other broadband hookup, such as hotel rooms and businesses. 

That means the phone number can be transported anywhere.

Time Warner doesn't offer that portability with its service.

Time Warner does provide "enhanced" 911 service. It routes calls to the nearest emergency dispatch center and can automatically provide addresses to the operator.

Vonage does connect to local dispatch centers, but the operators won't have automatic access to your address. Vonage is working to add that service, though.

Another important issue is reliability. VoIP service is only as reliable as the customer's broadband connection.

The Federal Communications Commission has yet to collect outage information for VoIP service as it does with regular phone service.

Campbell says Time Warner can better monitor reliability and uptime of its VoIP service.

Unlike Vonage, Time Warner owns and monitors the cable network over which VoIP calls make some portion of their trip. Vonage's Citron says it can just as easily monitor and check the performance of its calls even though they all have to go over other networks.

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