What exactly is VoIP technology?

The acronym VoIP stands for "Voice-over Internet Protocol." VoIP is a technology that allows telephone calls using a broadband Internet connection as opposed to a regular, analog phone line. Broadband is the common term for a high bandwidth Internet connection - one that can transmit or download information up to 40 times faster than a standard telephone and modem.

VoIP converts the voice signal from your telephone into a digital signal that travels over the Internet then converts it back at the other end so you can speak to anyone with a regular phone number. When placing a VoIP call using a phone with an adapter, you'll hear a dial tone and dial just as you always have. VoIP may also allow you to make a call directly from a computer using a conventional telephone or a microphone.

VoIP solutions will provide you with all the standard amenities of a traditional phone line, but also features additional functions rare to analog lines, depending on your chosen service provider. Some providers even allow you to choose your preferred area code. With VoIP, three telecom bills can be consolidated conveniently into one. VoIP is usually less expensive than PBX, due to equipment costs and lack of tax regulations.

Currently, there are no FCC regulations on Voice-over IP. Historically, the FCC has not regulated the Internet or Internet-based services in an effort to promote competition and innovation. On February 12, 2004, the FCC found that an entirely Internet-based VoIP service was an unregulated information service. A broader investigation is currently underway to evaluate the increase in consumer interest in VoIP solutions and how the FCC should respond in order to safeguard public interest.
Lack of regulation means VoIP solutions are not subject to the same taxes as traditional phone service. The Federal Excise Tax charges a 3% tax on all local, long distance and wireless phone service. These specific services are also subject to state and city taxes, all appearing on your telephone bill. However, because the FCC has not sanctioned regulations on VoIP, no taxes, even at the city level, can be enforced.

VoIP Solutions provides numerous system options - it is important that you speak with a Telecom Consultant to evaluate your specific telecommunication and, particularly, VoIP needs. A consultant can determine an appropriate carrier and plan based around your requirements.