Ooma Puts Out a Call to Ditch Landlines for Web-Based Service
It has been possible for several years now for Americans to dump their landline phone companies and pay much less with services that route calls over the Internet instead of over the regular phone network. For instance, the leader in this business, Vonage, charges just $25 a month for unlimited local and long-distance calling in the U.S. and Canada, much less than most traditional plans.
But relatively few Americans have adopted these alternatives, which are called voice over Internet protocol services, or VOIP, for short. Some consumers avoid the move because VOIP services can’t connect to 911 emergency call centers in the traditional manner, and must use workarounds. Others worry that if their Internet service goes out, so does their phone service.
In addition, the stability of the VOIP providers isn’t certain. Vonage itself has been battered by legal problems and another VOIP service, SunRocket, shut down this week.
I’ve been testing a new type of VOIP option that will go on sale in September from a Silicon Valley start-up called Ooma, whose product goes by the same name. It differs radically from Vonage and other current VOIP providers, in two ways.
First, Ooma is a $399 piece of hardware that you pay for only once. There are no monthly bills. You just buy an Ooma Hub, a small device that looks like an answering machine. You plug it into your Internet connection and attach a phone, and you get free, unlimited domestic calls, local or long distance, as long as you keep your Ooma.
Second, with Ooma, you can easily keep your regular phone service as an integrated backup, for 911 calls, and in case the Internet service in your home goes out.
Ooma combines the VOIP and regular phone service. If you keep your standard phone service, Ooma uses your current phone number. And, if you dial 911, it always places that call over the traditional phone network. During an Internet outage, the device seamlessly switches to use the regular phone service, but you still pay no fees to Ooma.
If you do keep your standard service, you can reduce it to a very basic, low-cost plan, just for 911 and backup. International calls are routed through the Internet by Ooma and the company says they will cost roughly what Internet phone services like Skype charge for nonmember calls, which is well below traditional landline rates.
Ooma also delivers some added benefits. It gives you a virtual second line. If a call comes in when you are already on the line, the second call can be answered from another extension. It also has a built-in answering machine, and allows you to check your messages and call logs online.
I’ve been testing Ooma in my home for about a week and, except for a problem on one phone jack, I found it worked as promised. I tested it with both corded and cordless phones, and I also tested a companion $39 device, called an Ooma Scout, which must be plugged into the phone jacks in your house you want to use, beyond the jack to which the Hub is connected. Each scenario worked well.
When I plugged my cordless-phone base station into an Ooma box, all of the remote handsets continued to work normally. The only difference was the dial tone; Ooma gives you a unique musical dial tone to tell you it’s on duty.
Ooma works using the peer-to-peer Internet system popularized by file-sharing sites. Each Ooma box is part of Ooma’s network. The box in your home, for instance, might carry someone else’s phone call, though you can’t hear that call, and this doesn’t interfere with your own ability to make and receive calls whenever you want. In my tests, the Ooma didn’t seem to affect the speed of the Internet connection used by our computers.
To build its network, Ooma will be seeding the country with 1,500 boxes over the summer. These will be provided free of charge. But the only way to get one, if you aren’t on the initial list, is to know somebody who has one. Each recipient gets three tokens — redeemable for a free Ooma — to give to others.
Set-up is relatively straightforward and the manual is clear, assuming you have standard cable modem or DSL Internet service.
I did run into one problem. When I plugged my cordless-phone base station into an Ooma Scout, outgoing calls worked OK, but incoming calls wouldn’t work properly. This problem cleared up when I moved the base station to a different phone jack, but it suggests that, at least on some jacks, Ooma may fail.
The Ooma devices can be constantly updated over the network to fix problems and add capabilities, and the company is planning to add more features and options, some of which may cost money.
Of course, there is no guarantee that Ooma can handle a large number of customers as well as it did my test unit. But Ooma may be a good option for people who want to cut their phone bills, and either aren’t worried about 911 and Internet outages, or are willing to keep a basic, low-price standard phone service to cover those contingencies.
- Email me at mossberg@wsj.com. Find all my columns and videos online free at the new All Things Digital Web site, http://walt.allthingsd.com.
Comments
Since 3 years my company offers the same service in terms of broadband/PSTN combination for 911 fallback. I agree that Vonages approach is pretty bad if someone needs a reliable connection. So that’s the great part about ooma (connceting broadband and PSTN). A couple years ago we tried to use softphones to enable peer2peer sharing of landlines. This was turned down by our legal department which believes that every user would violate their contract with their local phone company and might be simply cut off if too many calls are being routed over their line. Secondly it is very easy to listen to every call transported this way. And every time one of your lines is being used by another ooma user one phone line (fax or phone) is blocked. And for $399 I can buy years worth of domestic calls from most VoIP companies. So the idea is sure nice but pretty old and not legal. Or am I missing something? I have my doubts that phone companies will just watch people “selling” or “sharing” their local PSTN lines. Maybe it works if you don’t pay kick backs. We actually planned on paying everybody who would share his line a fee per minute. If you keep the money you make with it, it might work;-) Just an idea for the folks at ooma. If they have enough of their ATA’s spread they can sell USA call termination to wholesales providers. The only downside is that the entire traffic can be listended to with almost no technical effort. I must say - I am shocked. This offer is not very honest and users might get in trouble. Just my oppinion. If ooma will be successful there will be probably a new web 2.0. company offering the “ooma radio” where you can listen to other peoples phone calls all day long;-) oh oh
Posted by Nikolai Manek at July 19th, 2007 at 1:55 pmAs I see it, the network is going to use the land lines that many of the clients retain as the access points into the local phone system. I have a few issues with that however, the first being if I were to place a 911 call, and my land line was already being used for a call that was routed into my local network, that I would not be able to place the call or the other call would be interrupted. The second, and a more distributing issue, would be with caller id. As I understand the way the normal phone network functions, any call that would be placed over my land line would contain my land line’s identification and that would be the number/name that would appear on the phone for the individual called. If the unit sends the code to block the caller id from being sent, then the issue may occur where individuals will not accept blocked caller ids. I would also resist the ability of the land line network accepting a caller id over the basic service line because of the security and the ability of someone then having the ability to spoof other’s phone identifications by replicating some of the units capibilities with other electronic equipment.
Posted by John Rudert at July 19th, 2007 at 2:20 pmI’ve been using ooma for about 4 months. I was a pre-”white rabbit” tester, and apart from some early glitches I have been very pleased. My broadband connection is standard 1.5Mbps DSL, I use internet applications constantly, and I have had no quality problems with the latest generation hardware. No bandwidth problems either.
There seem to be good questions being asked about how ooma will operate once the current requirement for land line is cut. I am curious about that too. Things I like about ooma are:
1) paying AT&T less every month
2) a free second line
3) the excellent broadband answering machine. The call screening, do not disturb and internet access features are great!
The prospect of paying AT&T $0 every month has me even more excited. If you have an opportunity to join the beta program, I’d recommend it. You can always decide not to switch later.
Posted by Paul Joyce at July 20th, 2007 at 5:46 pmI guess that ooma must sign some contract with operators for using their idle line as their P2P traffic transmission. In China, why PHS was successful is because _old_ circuit switching networks have been utilised. So PHS can just take use of these idle lines. Perhaps Ooma does the same. If so they can pay a very cheap rental to AT&T or any other operators. The rest of the operation shall be very straight forward as any other popular P2P architectures. The operator shall be happy to sell their idle resources, Omma sels the device-the more they sells the more profit they have; consumers are happy because they simply use it for free. But I suppose that Omma will deploy some kind of advertisement nicely. So white rabitt are lucky guys. I would immediately apply for a rabitt if I am in US, haha.
Posted by Mike Cao at July 21st, 2007 at 5:09 amI gave up a landline years ago - all cell phone all the time.
Are people making that many calls that they would be saving money with VOIP?
This doesn’t seem like a good deal with the $399 upfront payment - technology changes so fast that in a few years there will be a better solution or Oooma may not even be around.
Buyer beware.
Posted by Mitch Engleman at July 21st, 2007 at 1:18 pmCan anyone send me a White Rabbit invitation?
Posted by Matt Michels at July 25th, 2007 at 12:21 amI have to agree with the previous posts that point out the probable illegality of terminating calls through existing landlines. And the experience discussed by some current users is likely not indicative of what the general population will experience. Now I haven’t used Ooma, but based on the architecture here’s how I would predict it will work.
Let’s suppose you are the first user in your community. Everything is peachy keen until another Ooma user out of the area decides to call your local movie theatre, Wal*Mart or someplace. The call is terminated over your personal landline. You coincidentally want to call your next door neighbor. That call has to terminate through the same landline that is now servicing other callers. Your call will be blocked. How convenient for you.
So, it’s going to take a tremendous number of users signing on to the service and making local lines available to give you free ubiquitous calling nationwide. Otherwise, your call will have to be routed via broadband and terminated through a paid service. That will be at an added expense — probably a couple of cents a minute — just like other peer-to-peer networking architectures. What happened to the free for life model?
Let’s look at a different scenario. Ooma works with the telephone connected to the Ooma hub. Presumably you can connect it through your NID (network interface device) to work with all phones in the house. If not, when junior is off at school only one person at a time can join the conversation unless you have a speakerphone. Using the Scout, you can get second dial tone, but per the previous example you can’t join the existing conversation unless a three-way call is established. Again, how convenient.
And, for the time being, all beta users must have a local line to subscribe to the service. That’s to benefit Ooma so that they can establish a network. Again, you’re paying for a local line so free is a misnomer.
What happens beyond the beta window? If users don’t need to have a local line, then how do you call them? Ooma isn’t a Competitive Local Exchange Carrier so they can’t get local numbers for users unless they buy them elsewhere. There’s a cost associated with that. Did someone say free?
Some of these peer-to-peer schemes make sense. I’ve been a PhoneGnome user for two years. You buy your equipment once — at a more reasonable price — and get most of the same features because they tell you up front you need a landline and a wholesale VoIP network provider if you want to make off-network calls. No hidden fees; no scam.
I could go on and detail other concerns I have, but I’m not a user and basing my opinions on public statements. If someone wants to send me a White Rabbit invite, I’d be happy to thoroughly test the device/service and report back again.
Posted by Gary Morgenstern at July 27th, 2007 at 3:49 pmI, too, would love to get a White Rabbit invite for the OOMA system. If anyone can do this, I’d be grateful.
Posted by Brian Edwards at August 7th, 2007 at 8:30 pmPLEASE ! Someone send me an invite for White Rabbit ! I BEG YOU ! …Pretty Please?
Posted by James Maszczak at August 9th, 2007 at 2:04 amjimriver-at-mail-dotcom
Posted by James Maszczak at August 9th, 2007 at 2:07 am