Networking optimize

VoIP in a box?


There's been a lot of buzz in the VoIP community recently about ooma, a device that the company advertises will allow you to "own your own dial tone." The key here is that you buy a box -- not a service.

You pay for the ooma hardware -- $599 MSRP, with a special introductory price of $399 when the product finishes beta testing and debuts in September. Thereafter, you get free VoIP, with no monthly fees.

This isn't the first company to come up with the concept. PhoneGnome got there first, but there's an important difference. With PhoneGnome, calls are free to other PhoneGnome users. But if you want to make calls to landlines or mobile phones, you pay: 2.1 cents per minute in the United States with varying rates for international calls.

Granted, you can still save a lot of money; a call to Afghanistan from a PhoneGnome box or its soft-phone software costs 2.1 cents per minute. Calls to the same locale through traditional VoIP carriers such as Vonage or Lingo cost around 70 cents per minute.

Ooma, on the other hand, promises free unlimited calling within the United States for life to any kind of number, including landlines and mobiles. International calls still cost extra.

Free phone calls forever? Doesn't that sound too good to be true? You might be wondering, as I did, what's the catch? I dug a little deeper into the available information about this "VoIP in a box" solution, and I've requested an evaluation device that I can try out. Meanwhile, here's what I found out.

What's in the box?

When you pay the up-front cost of a few hundred bucks, you get a silver-colored device that resembles a futuristic answering machine and features a simple keypad with backlit keys. This is the ooma hub, and it's the base station for your ooma calls. Then, for each extension phone you use, you get a smaller, but similar in appearance, device called an ooma scout.

This hardware boasts features such as three-way conference calling, instant second-line capabilities by which two people can be on different phone calls at the same time with no extra charges or extra equipment, and broadband answering machine technology that combines the advantages of voice mail and an on-site answering machine. In addition, the ooma Web site notes that with this product, you have reliable 911 service, even if you lose electrical power and/or your Internet connection.

What's the catch?

We all know that "there ain't no such thing as a free lunch (TANSTAAFL)." Although you don't pay monthly fees to a VoIP provider with ooma, you still, of course, have to pay for an Internet connection. And it appears that the reason you have that reliable 911 service even when you lose power or your Internet connection is because you still need a landline.

According to the ooma documentation, in the future, you'll be able to use the device without a landline. However, unless there's some sort of magic at work, I suspect if you do so, you'll lose that 911 capability.

Meanwhile, having to keep your traditional phone service may somewhat negate the cost savings of deploying VoIP. You can pay $19.99 to $29.99 to one of the more traditional VoIP providers and drop your landline completely.

But if you must keep the landline to use ooma, PSTN service can easily cost more than the monthly cost of other VoIP providers. (My "bare-bones" PSTN line with no extra services costs $42 per month with all the taxes and fees.)

On the other hand, if you need to keep a landline anyway (for example, to work with your security alarm system or fax machine or because you want to have 911 service when the power goes off), using ooma instead of a traditional VoIP provider for a second line could save you money over the long term. At $399, the ooma box would pay for itself in less than two years.

How does it work?

According to reports, the ooma hub is a Linux-based device that uses a P2P-type technology that uses those landlines ooma users are currently required to retain. The hub sends the call across the Internet to the hub of some other ooma user who's in the calling area that you want to call. That hub uses the other user's landline to complete the call, which is a free local call because it's coming from the line of the ooma user in the area you're calling instead of from your own landline, which would be long distance.

It's a somewhat ingenious idea, and it explains why users must have landline service in order to get the ooma boxes. Although the company says it will eventually offer service to people without landlines, there will still need to be a substantial number of ooma users with landlines for this scheme to work.

Is it reliable? Ooma says it has the same uptime as a class 5 telephone company switch, which is 99.999 percent. It doesn't get much better than that.

The whole thing is still in beta testing (with actor Ashton Kutcher serving as "creative director" in a massive campaign to build up the customer base). The company has dubbed its beta testers White Rabbits, who get their boxes for a penny. Word of mouth will presumably spread the word and encourage others to sign up when the boxes go on sale to the public in September.

Summary

Ooma is an innovative way of using VoIP in combination with the public telephone networks to provide a whole new payment model for customers. If it works as claimed, it could be a very attractive idea to those looking to save even more money than they can with regular VoIP, especially those who want to keep their landlines anyway.

Is shelling out $400 up front for an as-yet-unproven technology risky? Not a lot more risky than prepaying for an annual SunRocket account, as so many of that company's customers discovered when their provider went out of business with no refunds of those prepaid amounts.

Deb Shinder is a technology consultant, trainer, and writer who has authored a number of books on computer operating systems, networking, and security. She currently specializes in security issues and Microsoft products, and she has received Microsoft's Most Valuable Professional (MVP) status in Windows Server Security.

Want more tips and tricks to help you plan or optimize your VoIP deployment? Automatically sign up for our free VoIP newsletter, delivered each Monday!

About

Debra Littlejohn Shinder, MCSE, MVP is a technology consultant, trainer, and writer who has authored a number of books on computer operating systems, networking, and security. Deb is a tech editor, developmental editor, and contributor to over 20 add...

10 comments
MyDivert
MyDivert

there ain?t no such thing as a free lunch For example, Cambridge, Mass.-based Vertical Communications recently released an all-in-one called Xcelerator IP, whose router handles up to 24 VoIP-enabled phones; allows the office-wide wireless networking of computers, printers, fax machines and card readers; provides voice mail and an auto attendant; falls back to an analog phone line if your broadband goes down or for 911 access; and is configurable through a Web-browser interface. MyDivert.com - Virtual Number

mpierce
mpierce

When ooma says it has the same up-time as a Class 5 telephone swith (99.999%), they must be comparing apples and oranges. The user really doesn't care what the reliability of the ooma box is by itself, but of the telephone service. Outages of power, Internet, and cut-off calls caused by the subscriber whose line you're using will prevent that level of service. See other issues at ooma-revealed.info.

gfeintrepid
gfeintrepid

I find it hard to believe it would work globally, in North America where where local calls are free... yeah maybe if ppl are confortable with its security... but outside the US? Unlikely... or maybe its only targetted for US customers?

alopez
alopez

According to the FAQ at the Ooma website, the devices work with or without a landline. The landline connection is only for backup. The other thing you need to understand before slapping down $400 is that these free domestic calls may only last for 3 years. Their website's press release states, "Unlimited calling within the US with no monthly fees is subject to all of the terms and conditions in the ooma license and user agreement and shall apply to purchasers during the white rabbit and promotional period. Purchasers during the promotional period will have this no monthly charge service for at least three years." So that's still cheaper than most VoIP providers for unlimited ($11.11/Month). What concerns me is how they can possibly turn a profit. I'd love to read their business plan... "We barely break even, but we make it up in volume!" -Al

bonscottsalive
bonscottsalive

Regulatory Risk - Having this type of call route as "local" has been deemed illegal on many occasions by the FCC. If is the entire route that determines jurisdiction not the last portion. As soon as enough customers are using the product and AT&T/Verizon are losing money, they will fight that battle at the FCC/courts and ring the death bell for ooma.

roy.mcmillan
roy.mcmillan

The challenge with "Owning Your Own Dial Tone" or using Vonage, Sun Rocket, Packet 8 or whatever...YOU ARE USING SOMEONE ELSES NETWORK. Your VOICE packets are traveling on a DATA network. Using a DSL line or cable modem doesn't make a difference. The equipment Originating and Terminating the signal, as well as the switches in brtween, all have to be designed and configured to properly handle Voice Packets. You will still have dropped calls with this, tinny, echoey connections and all the other challenges that coincide with running VoIP on someone elses network.

willem_eijgenraam
willem_eijgenraam

This trick to use a local landline in the vicinity of the one you are calling is as far as I know does not work in many countries, where a call from one person to his neighbour also has a price. This means that the person having the local landline in the vicinity will carry the costs of the last bit. But if you are that person with nobody else using the OOMA box you may end up with quite a bill. So I wouldn't advise it for countries like Belgium, Germany and the Netherlands !

gary.hewett
gary.hewett

If the system uses a PSTN line in someone else's house/office then the call is a standard analog signal and can be listened to and/or recorded with ease. Most calls will be *randomized* enough that it would be difficult to trace any ongoing conversation that lasts more than one discreet phone call unless the device is in a very unique or small area code (from ooma's distribution perspective). Your ooma call would always be at risk of being cutoff when a 911 call must go out (maybe not? I assume that 911 would be routed through the net (E911) when the line is up) but on the flip side if the PSTN line you devote to the ooma box is your incoming fax line and some long lost relative decides to spend a day and a half catching up with great aunt Millie then that critical fax you must have from your number one client isn't going to get to you on time. DSL routers and DSL service (which is typically over-subscribed) have a nasty habit of recycling connections. I assume that part of the technology in the box is a DSL router monitor that triggers a fast reboot of the router should the DSL line go dead. (We did something like that for a number of our sites and we found that most DSL connections drop about once day in Ottawa/Canada at least) Ingenious idea but as always the devil is in the details and this one has a touch of the old "grazing of the commons" problem. I think as a business model ooma would have been smart enough to set up some major hubs to handle the high traffic area codes and some dial logic that looks at typical length of calls (inbound and outbound) and tries to keep longer calls off the common public grid and through there own circuits (new privacy issues - scanning MY calling habits?). I'll assume that they have planned to eat the costs of a large number of initial calls to areas net yet served (although a widespread beta test penetration will help alleviate that issue. If ooma wants to penetrate the serious SOHO market space they might need a secondary plan that forces calls to these (slightly more secure) larger hubs but then you get right back to the need to maintain (and hence bill) for ongoing services. I will be interesting to do the math to see what critical mass is required for the service to work, then break even and then prosper and how close ooma is to achieving that. As always however people's pocket books will decide our collective fate. If ooma provides a service that people like at a price they are willing pay with acceptable terms and conditions and they can maintain (afford) reasonable SLA's then everything else just starts to happen naturally. Kudo's to them for taking an interesting approach beyond the barstool *this will be kewl* stage....

superCEO
superCEO

This scheme is simply a "bypass". And it may be implemented with an ATA with one FXS and one FXO for about $100.00. And a central server to switch all the destination traffic using the PSTN....

VBJackson
VBJackson

Excuse me, but unless you are a government, a major carrier, or a tier 1 business you will ALWAYS be using someone elses network. Voice, data, whatever, they all travel on networks owned by either the government or a (very) Major corporation. They are the only ones that can afford the installation and maintinance costs. You need to evaluate this on a comparative basis, as ANY absolute comparison, by it's very nature, must fail. The only reasonable question to ask is: Is this product better than the other sloutions on the market? That said, unfortunately, I would have to say that the problems associated with trying to use a remote PSTN line will most likely cause this one to fail.