Reach Out and 'Click' Someone Long-distance calls can be routed over the Internet

November 02, 1998|By Michael Stroh | Michael Stroh,SUN STAFF

Every time Joseph and Dubby Balter pick up the phone to make a long-distance call, the Baltimore couple become communication-age pioneers.

What's so special about their telephone service? At first blush, very little. When Joseph wants to call his sister in Australia, for instance, he picks up his phone, punches in a calling-card number, and the phone rings 12,000 miles away.

But once he starts to talk, he's on the cutting edge. The Balters use a long-distance service called Net2Phone Direct by IDT Corp. of Hackensack, N.J. The company transports its long-distance calls the same way America Online delivers e-mail - over the Internet. Since the Balters started using the service, their monthly phone bill has plummeted nearly 50 percent.

"We actually wind up spending the same amount each month, but we talk twice as long," says Joseph, 29.

Until recently, Internet phone calling was a novelty for nerds, requiring specially rigged PCs and the patience of Job. Sudden disconnects were common. Often, whole sentences of conversation mysteriously disappeared into the cyber void.

But that's changing. Internet calling services are starting to grow in popularity, thanks to services like Net2Phone Direct that don't require technical prowess - or even a computer, for that matter. While not perfect, the quality of Internet calls has also improved.

"I didn't even know it had anything to do with the Internet," says Libby Pheterson, a 41-year-old Baltimore writer and editor who uses the Internet calling service to call her son in Israel. "All I know is the rates are good."

Jupiter Communications, a New York-based market research firm, estimates that Internet phone calls will generate $17.4 million in revenue this year, but that figure is expected to jump to nearly $500 million by 2000 and more than $1 billion by 2002. As a result, companies ranging from small Internet service providers to cable TV outfits to established long-distance giants such as AT&T are all working on ways to connect phone calls through Internet.

The logic is simple: The established 120-year-old telephone network is heavily regulated and pricey. The Internet, at least for now, is regulation-free and inexpensive.

For consumers this translates into dirt-cheap calls. Americans spend an average 18 cents per minute on standard domestic long-distance calls. But Net2Phone Direct customers pay 5 cents a minute to 62 cities around the U.S. Sprint and AT&T, who are conducting limited trials of the technology, charge 7.5 cents. And there are several million computer users making PC-to-PC calls for free using software such as Microsoft's NetMeeting (See accompanying article).

Providers are experimenting with different technologies. Some, like IDT, are constructing "gateways" around the world that route calls between the Internet and the traditional telephone network. That way, people can make calls from their computers to a regular phone and even from phone to phone.

Others are developing standalone Internet "appliances" that don't require a computer.

A California start-up called Aplio makes a device called the Aplio/Phone that ostensibly can slash the cost of a long-distance call by 95 percent. The small black box connects to a regular telephone and routes calls through the Net with the push of a button. While users don't need a computer, they do need an account with an Internet service provider. Also, both caller and recipient must have an Aplio/Phone.

Craig Ashby, 29 of Frederick bought a $400 pair of Aplio phones for himself and his parents, who live in the Caribbean. He used to spend $100 a month to call them; now he spends less than $10.

"They've more than paid for themselves," he says.

Cheap calls are just the beginning for the marriage of the telephone with the Internet. MCI, for example, has launched a service called "Click 'n Connect" that allows online shoppers to click a button and talk to a customer service agent over the


But technical hurdles remain. Congestion on the Internet can still garble calls. "If it's a good call, its great. If it's a bad call, it's terrible," says Ashby. "Sometimes we all get fed up and hang up."

The problem stems from the way the Internet transmits e-mail, Web pages, phone conversations and other data. It does this by breaking the data into tiny "packets," sending each packet via the least congested route to its destination, then reassembling them once they arrive. The system is more efficient than the traditional phone network, which dedicates a circuit to each call.

But just as letters occasionally get lost in the mail, packets can go missing or arrive late. For e-mail, this doesn't matter much. But if a phone call packet is tardy by even a few milliseconds, it can garble the call.

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