What Is Vonage

by James E. Gaskin, author of Talk Is Cheap
The Vonage digital phone service is a commercial Voice over IP (VoIP) network that lets you use your existing high-speed internet connection (also known as broadband) to make all of your phone calls, for as little as $14.99 per month. In order to use this service, you must have a Vonage-specific router that plugs into your main router or broadband modem.

In This Article

  1. Vonage Splashes onto the Scene
  2. How Vonage Works Like Traditional Telephone Service
  3. How Vonage Differs from Traditional Telephone Service
  4. Vonage in the Future

Vonage calls itself "an all-inclusive phone service" and offers to replace your current phone company. But Vonage doesn't call itself a phone company, does it? Vonage uses the term phone service rather than phone company in its top-level marketing material. While routing phone calls over your broadband internet connection rather than a pair of copper wires may not seem like a huge leap of technology, the "service" part of the slogan hints at something new and interesting.

By keeping voice calls on their own internet-based network as long as possible, Vonage bypasses distance limitations and eliminates the long distance call. Only when slowing down and jumping onto the traditional telephone network to connect to non-Vonage customers is Vonage forced to pass along distance-related costs (mostly long distance fees for connecting to other countries). Expensive telephone company features, like Call Waiting and Call Forwarding, cease to be expensive using a modern, internet-based telephone network.

The modernization of telephone service--driven by Vonage and hundreds of competitors, including all the former Ma Bell companies--is transforming voice communications as we know it.

Vonage Splashes onto the Scene

Vonage established its brand name the old-fashioned way: they blindsided consumers with so many advertising impressions they drove the odd name Vonage into everyone's consciousness. Super Bowl TV ads on one end, balanced by Google AdWords on the other, make sure no one escapes the Vonage marketing blitz. The Vonage marketing department obviously got their hands on the venture capital money before any other department.

The name Vonage has no specific meaning but was created for worldwide use to ensure easy trademark establishment. Throwing bucks into advertising works, and many people now seem to think Vonage means "broadband phone" in some European language.

Splashing costs money, however. Most reports peg the venture capital investment in Vonage at around $600 million. At $25 per month for Vonage's highest-price consumer subscribers, the red ink will be sloshing around for some time.

How Vonage Works Like Traditional Telephone Service

Related Reading

Talk Is Cheap
Switching to Internet Telephones
By James E. Gaskin

Vonage uses the phone-centric internet telephony model (don't feel bad if you've never heard that term, because I made it up to help explain things in my Talk Is Cheap book). Your telephone, the very one you have now, can remain your telephone if you wish. But instead of plugging the phone into the wall, you plug it into the router Vonage sends you when you sign up for their service (or the router you buy at a retail outlet and take home to install).

Your telephone remains your "interface" to the modern world of Vonage voice communications. You dial your telephone like you always have, and you answer your telephone when it rings. You need a computer in order to configure your service and maintain your account via your Vonage web page, but you don't talk into or through the computer (see What Is Skype if you want to talk through your computer). With Vonage, the traditional telephone remains the focus.

Connecting to another Vonage customer means never having to say hello to Ma Bell or her departed phone companies. When one Vonage subscriber calls another, neither will notice a difference from a "regular" phone call. The sound quality may be slightly higher, because the Vonage-to-traditional-phone-company network crossover introduces noise into the call, but that's it. Nothing will tell you the call started and ended over broadband connections.

Connecting to a non-Vonage customer means the call passes from Vonage's internet-based network to the traditional telephone network, often called the PSTN (Public Switched Telephone Network). Neither the caller nor the callee can tell which network originated the call, or which network terminated the call.

Vonage relies on a variety of partners to connect to the PSTN in all local area codes in the United States and Canada. They must connect locally to the traditional telephone network close to your call recipient to avoid long distance charges.

This hodgepodge collection of partners needed to reach the traditional telephone network brings us to one of the few mistakes Vonage made: 911 calls. They trumpet the replacement of all phone services, but didn't have full 911 support for their customers. Part of the reason for poor 911 support we can blame on Vonage, but part of the blame goes to traditional telephone companies who control access to 911 service centers. The 911 service centers, nearly 6,000 of them across the country, also receive some blame because they use antiquated technology that can't support modern network connections.

However, this 911 mess cost Vonage some lawsuit publicity and encouraged the U.S. Congress to get involved. Now, all broadband phone vendors must provide 911 service that passes the caller's address to emergency services. Congress also pushed the traditional phone companies into working with broadband phone companies to make this happen.

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