The price difference comes into play because with traditional phone lines - also referred to as a landline - you have to pay for the use of a telephone company's lines, which are taxed in various ways. For instance, on a traditional landline phone bill, you will find among the taxes several from the Federal Communications Commission (FCC) in addition to a Federal Excise Tax and taxes to cover both state and school.
Furthermore, with landline phone service you have to pay extra for special features such as caller ID, call waiting, call forwarding, voice-mail or three-way conferencing. For a price break on long distance calls, a special bundled package has be to purchased and international calls are a bit expensive. Basic landline phone service would run you about $30 a month without any special features.
However, with VoIP phone services, no one owns the Internet, so the fees and taxes drop substantially. In fact, with a service such as Packet8, the only tax you pay is a 3-percent Federal Excise Tax. Packet8's Freedom Unlimited service at $19.95 per month offers free, unlimited calls in the U.S. - Alaska and Hawaii included - and Canada. The package includes all the special features listed above, free of charge, as well as cheap international call rates - and they only have one tax, the Federal Excise Tax. That's only $20.55 a month with the sole tax included.
Besides the price factor, another great thing about the VoIP phone service is the fact that it doesn't limit you to your physical location. What I mean by this is that you can get a phone number in a totally different state.
For instance, let's say you have kids in college in Oklahoma. You could get a local Oklahoma number, then when they phone home, it would be a local call for them. The only problem in this scenario occurs for people in your own town who would have to make a long distance call if this were your only phone number.
By now, you may be wondering how does this layer of VoIP stuff work. There are four main components: a broadband Internet connection (cable, DSL, etc.), a router that allows you to share your broadband connection, an adapter provided by your VoIP service provider to convert your analog voice to digital, and a regular phone. Your broadband connection and the adapter both are connected to your router with a dedicated network cable. Your phone then is connected to your adapter. Connect all power cables to a power source.
Finally, wait a few minutes for the adapter to get an IP address and then pick up your receiver to hear a dial tone. Now, listen to the sound of sweet savings!
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