Ooma offers free long distance forever

VoIP start-up Ooma offers free domestic long-distance phone service forever if you buy an Ooma appliance for $399.

Forever is a long time not to take in any revenue, so the company plans to offer supplemental services for a fee, such as ringtones, says CEO and founder Andrew Frame. More supplemental services are in the works, Frame says.

The service differs from VoIP carrier Vonage’s services in that customers pay a monthly fee for Vonage calling packages. They also have to buy an adapter that translates analog phone dialing and conversation to IP and vice-versa.

Vonage is running into trouble over patents that Verizon claims it owns, so its future is uncertain. Another VoIP start-up SunRocket went belly-up this week, underscoring how tough it is to make a profit as a pure VoIP provider.

Ooma's service is designed for residential customers, and it uses the Internet when it can to complete calls. When it can’t, it uses the public switched telephone network (PSTN), Frame says.

The free service also comes with a network-based message box that can deliver voicemail via e-mail attachments and that can be checked via the Web.

Some of the calls go over the Internet exclusively, some go over the public phone network and some go over both.

For instance, if a person uses Ooma to call another Ooma customer, the call goes over the Internet, hub to hub. Ooma won’t say how hubs tap address tables to find other Ooma hubs.

If the call is long distance, it starts as an Internet call until it finds an Ooma box (called a hub) in the local calling area of the number dialed. That local Ooma hub makes a local phone call over the public phone network and patches the call through at no cost.

If the call is local, it goes out over the public phone network. Emergency 911 calls also go out over the public phone network as well.

The preferred method of deploying the device is with both a broadband Internet connection - at least 256Kbps - and a traditional phone line. If the customer doesn’t have a traditional voice landline, an Ooma hub will connect the call to the public phone network through its network and termination agreements with carriers.

If Ooma hubs penetrated every calling area, and the hubs all had POTS lines, all the long distance calls could be completed with local calls rather via an Ooma-to-carrier connection with a public phone provider.

“We will handle the termination some way or other,” says Frame.

Ooma hubs plug into an electrical socket and a phone line equipped with a DSL Internet connection or into a cable Internet connection. A standard analog phone plugs into the hub as well and is used to make and receive calls. The hub automatically creates a second line to accept two calls at once.

Adding an extra extension to the system requires a second Ooma device called a scout that plugs into an electrical socket and communicates with the hub using IP over power line technology.