All Appropriate Technologies Blog
Technology news and commentary.
12 Mar 2010

Well, we're all looking for ways to save money, yes? I've recently considered my phone bill as a prime target. Verizon currently takes, on average, $33 a month after taxes. On top of that, I have to pay Sprint another $22 for long distance service. In exchange for that, I get a dial tone with the ability to call long distance, and the ability to receive incoming calls. Whoop-de-flippin-doo.

By comparison, my cell phone bill is $109/month. For that, I get three phone lines, so it averages $36/month for each. Each line has call waiting (Verizon wants extra to put that on the landline), call forwarding (costs extra on landline), call ID (costs extra), voice mail (do I need to say it?), plus I can take the thing with me wherever I go. Oh, that includes long distance, and there's no extra cost to use it anywhere in the country.

My ISP (Time-Warner) costs me $50/month. For that, I get 10Mbit/sec in and 1Mbit/sec out of throughput, and I can do more than one thing at a time. What's my landline get me? One thing at a time, and, if I'm really lucky, I might get it up to 53kbit/sec in, and 48kbit/sed out. That's 188 times the incoming data and 20 times the outgoing for the ISP versus the phone line.

Theoretically, my cell phone and broadband Internet should cost more than my land line, not less, based on the value they create for me. As such, I have decided to drop my landline.

Now, there is still a desire to run a landline in the house, and a desire to use our fax machine, so we've now gone with Ooma for VoIP. This has a high up-front cost ($266 after taxes) for the VoIP terminal, but the cost for service is unbeatable. All the bells and whistles can be had for $10/month, and basic service is available for the low, low price of $0. That's right, zero, zip, nada, zilch. There is an additional once-a-year fee of about $12 to pay for 911 service.

Now, I've seen a lot of people arguing that Ooma is about to go out of business. These arguments have been a constant drumbeat for three years, so I think they can be called out as false.

I've also heard people decrying Ooma's model of useing a private analog phone lines to complete phone calls. They did this initially, but they stoped dong this over a year ago in favour of terminating phone calls themselves for cheap.

So how do they do it?

First off, the VoIP terminal is intelligent. It figures out how best to route phone calls, before sending any bits over your broadband. By doing this, Ooma have eliminated the need for big iron in their data centres. For that matter, they've almost completely eliminated the data centres.

Second, the cost of terminating the calls is built into the cost of the terminal. There are assumptions made about how long the terminal will last (average five years) and the margin is enough to pay for service for that long.

Personally, since they will save me $55/month, I'll be happy if it lasts me five months.

Is it all good? No. Nothing is perfect. Here are the cons:

  • If your power goes out, so does your phone.
  • If your Internet goes out, so does your phone.
  • Sound quality is not quite as good, with some delay.
  • My satellite receiver can't call Dish Network, so no more pay-per-view.
  • My fax machine is now very slow.
  • Some calls just don't go through, then suddenly work fine.

How about the upside, besides the price?

  • Voice mail, call forwarding, call waiting, conference calling and caller ID are all included.
  • You can blacklist telemarketers
  • The voicemail works like an answering machine

I especially like the blacklist feature. A community blaclist culls blacklists from other Ooma users, and blocks them if you want. Otherwise, you can use just your own private blacklist, and you can inflict four different things on them: (1) straight to voicemail, (2) continuous ringing, (3) a message telling them their call isn't welcome and (4) -- this is my favourite -- a message indicating that the phone has been disconnected. How cool is that?

As for the voicemail working like an ansering machine, when the voicemail picks up, the audio is piped through a speaker on your voip terminal, and you can hear the message being left, just like with a traditional answering machine. Another button on the terminal provides a quick and easy way to send calls to voicemail when you discover that you didn't really want to talk to them.

Overall, I am really liking this system. I can't argue with the price at all. If we assume their estimate of a five-year lifespan is right, then this service works out to less than $16/month, with all of the bells and whistles. How can you beat that?

Disclaimer: I have no stake in Ooma; I am merely a satisfied customer.

voip, internet