If you’ve watched any television lately, you must have seen the commercials for AT&T where they tell us that they are reinventing the phone system. The commercials make it all sound unbelievably innovative and intriguing, at least intriguing enough for me to want to learn more.

The fact is, AT&T is simply jumping on the bandwagon that began a couple of years ago with several smaller, eager to compete companies–including Lingo, Voiceglo, Covad and others that began offering Internet phone service using a technology called Voice Over Internet Protocol (VoIP). AT&T had no choice-not if they wanted to stay in business! VoIP is another way of saying that they take your voice and convert it into data packets that are then routed over the Net, rather than an old-fashioned phone line, just like e-mail. For calls to a standard telephone, the data call obviously has to connect to the public phone network at some point; Internet phone services provide this connection seamlessly. Most experts agree that VoIP technology will eventually render today’s phone lines obsolete. Hence, AT&T’s reinventing-of itself and introducing their AT&TCallVantage service.

Internet phone service uses real phones and real phone numbers and is just like the service you're used to, except that calls are routed over the Internet rather than over a telephone company's network. In most cases, you just plug your current telephone into a small box or adapter that your Internet phone company provides to you. The box, in turn, plugs into your broadband connection. (you must have DSL or cable modem-i.e., not just a dial-up connection). Just as with regular telephone service, you pick up the phone to get a dial tone and press numbers on the keypad to call the person you want to talk with. And as with a regular telephone, you can call anybody in the world who is using any kind of phone service.

For now, the two main reasons customers are switching are cost and features. One advantage of Internet telephones is that calls range from extremely cheap to free, anywhere in the world. However, just as with ordinary phone services, it’s important to do your homework, and figure out which companies offer the best savings for your particular calling habits. In other words, if you regularly call a particular area (a relative overseas, or your business partner in Manhattan) you can find an Internet phone plan with rates that are incredibly low for your needs. Vonage, for example, charges a fee of $39.99 per month for unlimited phone calls anywhere in the U.S. and Canada. And calling other users of your Internet phone system is generally free.

Of course, many regular calling plans offer all kinds of savings plans too. So, it’s really the features that attract most Internet phone users. Many features that incur “extra” charges on your regular phone bill are included with Internet phone service. So, AT&T CallVantage (and Verizon VoiceWing, SBC, Qwest One Flex and the other major players) offer Voicemail, Caller ID, Call Waiting and Call Forwarding in its very low flat rate. Vonage includes those features along with 3-way calling, call transfer, click- 2-Call, Caller ID Blocking (*67) and Call Return (*69). Also, you can do things with an Internet phone service that no traditional phone can offer. This means that you can take your phone number with you when you move; it's as easy as packing the adapter you get from your service provider. You don't have to end your old phone service in one city and go through the hassle of setting up service in another. And here’s a cool feature: with many systems, you also get a choice of area codes. You can be running a small business in rural Montana and, if you so desire, have a high-rent, New York 212 area code.

You can also get great integration with your computers. Some systems send all your voicemail to your e-mail in-box and let you dial phone numbers directly from Outlook. And even the smallest company can set up a virtual phone system that spans offices (or home offices) yet functions very much like a phone system used by a corporation with dozens of worldwide offices. For example, a small business can get features such as simultaneous ringing, in which a call to your main number rings on all three of your employees' phones, even if some of them are not Internet phones.

In addition to simply plugging an existing phone into an adapter, some services offer “softphones.” Vonage SoftPhone is a screen-based interface that works just like your telephone keypad. You can make a call, receive a call, and also pick up your voicemails. Thus, your computer becomes your telephone, and you talk via a handset or a headset plugged into USB ports. If you download Vonage SoftPhone you can turn any PC or laptop into a full-functioning telephone, complete with Caller ID, Call Forwarding, and more.

There ARE some disadvantages. The quality of VoIP is variable. Often the voice quality can be far superior to that of a regular phone, especially for international calls. However, if your call ends up routed over a congested portion of the Internet, quality can degrade, and you’ll experience that disconcerting lag between two parties in a conversation. (and how is it that we all know about that lag? Easy; we’ve experienced it on our phone line!)

Other disadvantages include the fact that you must have a broadband connection, as well as a spare Ethernet port on your hub or router. (not really a disadvantage; it’s just “greek” to someone who’s not computer literate.) Of course, if your network connection goes out or the power to your network equipment fails, your Internet phone dies too. You can insure against power outages with an uninterruptible power supply, but if your ISP is less reliable than your phone service, keep that in mind if you'll be relying on your VoIP phone.

One disadvantage some might not think of is that because VoIP phone numbers move with your phone, not with the jack the phone is plugged into, calls to emergency services (911) won't automatically go to a local emergency call center. Until recently, in fact, 911 calls were not available on many hosted VoIP services. Today, 911 handling can be turned on, although you need to register your phone so that the call is routed to the right location.

For the time being, the FCC is maintaining a “hands-off” policy with regard to taxes and regulations in order to grease the wheel of innovation. In fact, it’s the elimination of those taxes and surcharges that makes the service cheaper. But there’s no reason to assume that this policy will last forever, and every reason to assume that in time, all those annoying charges on our regular phone bills will just get transferred to our Internet phone bills. Until then……….there are all those free features, plus the lower rates. So what the heck; you might as well make the switch now, before EVERY phone company buries their phone lines.