VoIP's pros and cons, in a nutshell

VoIP is an important technology for messaging and telecom administrators to understand, for several reasons.

For example, VoIP provides several cost and technical advantages to organizations of all sizes compared to circuit-switched telephony. VoIP is less expensive because it routes telecom traffic over the Internet instead of through the public switched telephone network, meaning that telecom costs on a per-call basis can be significantly lower. VoIP is not nearly as heavily regulated as traditional telephony and so avoids the enormous burden of federal, state and local taxes that is placed on traditional telephony.

Further, advances in VoIP technology have dramatically increased the quality of VoIP communications compared to earlier systems that suffered from poor call quality and low reliability. VoIP now offers a viable alternative to traditional telephony in real-world business applications, as well as for home-based users. Add to all of this the huge potential that VoIP offers for integrating telephony with e-mail and presence - attributes that could make Web conferencing, audio conferencing, video conferencing, unified communications and other collaboration capabilities much easier and more widespread.

That said, VoIP carries with it the fairly significant risk that regulators will decide that the technology and its providers are getting a free ride compared to conventional telecom carriers, and so will impose additional taxes and requirements that will erase much or all of the cost advantage that VoIP currently enjoys. For example, the Texas Attorney General is suing Vonage for deceptive advertising because the 911 service offered to Vonage customers is substantially different than for conventional telephone customers.

For business customers, the advantages of VoIP are at least as much technical (unified communications and so forth) as they are economic. However, if regulators decide to erase the cost advantages of VoIP by imposing taxes and other requirements on providers, the market will likely be slower to adopt the technology, since one of its major benefits - substantially lower cost - will have been eliminated.

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