If you've never heard of VoIP, get ready to change the way you think about long-distance phone calls. VoIP, or Voice over Internet Protocol, is a method for taking analog audio signals, like the kind you hear when you talk on the phone, and turning them into digital data that can be transmitted over the Internet.

How is this useful? VoIP can turn a standard Internet connection into a way to place free phone calls. The practical upshot of this is that by using some of the free VoIP software that is available to make Internet phone calls, you're bypassing the phone company (and its charges) entirely.

VoIP is a revolutionary technology that has the potential to completely rework the world's phone systems. VoIP providers like Vonage have already been around for a while and are growing steadily. Major carriers like AT&T are already setting up VoIP calling plans in several markets around the United States, and the FCC is looking seriously at the potential ramifications of VoIP service.

Above all else, VoIP is basically a clever "reinvention of the wheel." In this article, we'll explore the principles behind VoIP, its applications and the potential of this emerging technology, which will more than likely one day replace the traditional phone system entirely.

The interesting thing about VoIP is that there is not just one way to place a call. There are three different "flavors" of VoIP service in common use today:

  • ATA -- The simplest and most common way is through the use of a device called an ATA (analog telephone adaptor). The ATA allows you to connect a standard phone to your computer or your Internet connection for use with VoIP. The ATA is an analog-to-digital converter. It takes the analog signal from your traditional phone and converts it into digital data for transmission over the Internet. Providers like Vonage and AT&T CallVantage are bundling ATAs free with their service. You simply crack the ATA out of the box, plug the cable from your phone that would normally go in the wall socket into the ATA, and you're ready to make VoIP calls. Some ATAs may ship with additional software that is loaded onto the host computer to configure it; but in any case, it's a very straightforward setup.
  • IP Phones -- These specialized phones look just like normal phones with a handset, cradle and buttons. But instead of having the standard RJ-11 phone connectors, IP phones have an RJ-45 Ethernet connector. IP phones connect directly to your router and have all the hardware and software necessary right onboard to handle the IP call. Wi-Fi phones allow subscribing callers to make VoIP calls from any Wi-Fi hot spot.
  • Computer-to-computer -- This is certainly the easiest way to use VoIP. You don't even have to pay for long-distance calls. There are several companies offering free or very low-cost software that you can use for this type of VoIP. All you need is the software, a microphone, speakers, a sound card and an Internet connection, preferably a fast one like you would get through a cable or DSL modem. Except for your normal monthly ISP fee, there is usually no charge for computer-to-computer calls, no matter the distance.

If you're interested in trying VoIP, then you should check out some of the free VoIP software available on the Internet. You should be able to download and set it up in about three to five minutes. Get a friend to download the software, too, and you can start tinkering with VoIP to get a feel for how it works.

Next, we'll look at exactly how VoIP is used.