Over the past 6 years I have been watching the growth of the Internet Based Telephone Industry. With the bursting popularity of Broadband or High Speed Internet like DSL, Cable Modem, or Satellite, telephone service has become a natural addition of applications to run over the Internet. Over the past 6 years I have been watching the growth of the Internet Based Telephone Industry. With the bursting popularity of Broadband or High Speed Internet like DSL, Cable Modem, or Satellite, telephone service has become a natural addition of applications to run over the Internet.

Many people are not aware that most of the major telephone companies use the Internet to route their long distance calls already and have been for years. They use a protocol called SIP (Session Initiation Protocol) to offer Voice Over IP (VoIP). This same protocol is available in many of the leading messaging programs like Skype, MSN, AOL, etc...

For many years people have been using this protocol to talk over long distances on their computers using programs called "softphones". Softphones are basically computer programs that run on computers and use the sound card in a computer to convert analogue sound, like a voice, to digital packets that can be carried over the Internet. Then some program or device on the other end can decode the packets and play them back. Of course it goes in both directions. Thus you can use it like a telephone.

This same softphone technology is being embedded in small devices called Analog Telephone Adapters or ATAs. These devices have really become popular in the past few years and the quality of the devices have greatly increased. ATAs basically connect to a normal telephone in your house on one side and to the internet on the other. The ATA acts as a gateway translating the sound from the telephone into SIP that goes over the internet and eventually to the phone system where it is decoded and passed on to regular telephones.

Many companies over the past 5 years have tried to make a business plan using ATA devices. The most popular is Vonage. Vonage has spent literally 10s of millions of dollars on advertising and have established a good market. Their latest adds say they are a million customers strong. I can remember when they were just in a few local markets. Many companies have followed their lead like USP Connect, Packet8, Sun Rocket, etc