Voice over IP has been one of the added services ISP marketing heads and number crunchers have been fantasizing about for years. On the other hand, the concept could be the Telco's worst nightmare, provided the technology performs. Several competitors are finally bringing VOIP, in a stable form, to market with a somewhat sane price tag.

Most of these units have been in beta all over the country for the past several years. We took part in a Bazillion beta last year, and although it was short lived thanks to Bazillion's rather ugly demise, the short experience did provide some decent impressions of a technology that should be fairly successful once it can shake off the initial kinks.

The small black one buttoned unit we trialed had some slight latency issues and initially resembled an evening news correspondent's afghanistan report more than a short distance Voice over IP solution. But with several tweaks, the system worked admirably for a first or second generation device, though the delay was never completely dealt with. Most of the problems we experienced have been solved however, primarily through the development of Session Initiation Protocol, allowing calls to be routed more efficiently. You can read more about it here.

There are several services coming to market. One of the newer entries is Vonage, who offer both a $20 per month, 500 minute package or a $40 per month unlimited service package. According to this user at Slashdot, the quality is indistinguishable from a regular phone. The package comes will call waiting, call forwarding, caller ID, voicemail, and the area code of your choice. Time is running an article that discusses their first impressions of the service as well, and are likewise impressed with the quality.

We've discussed other VOIP attempts, and the reaction from users is generally not very admirable. When we made mention of DirecTV's entry into the VOIP market, the primary concern was one of quality. Initial experiences with the technology have been very sour, something the technology will need to overcome during it's entry phase.

Certainly not to be left out, keep in mind the Baby Bells will certainly be investing in the technology (most already have). They'll certainly come out swinging to protect their bread and butter market.

VOIP should find itself a niche if the quality is high and the costs are low. Once those two problems are met, its biggest stumbling point will be that you can't dial 911, and once VOIP leaves the realm of pipe dream, it should bring us one step closer to the holy grail of two way video. For additional information on VOIP technology, you may want to examine VOIP calculator, this overview, and this section at protocols.com.