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Published: 10/5/2011

Ooma cuts cord as free phone calls go Wi-Fi

BY RICH JAROSLOVSKY
BLOOMBERG
Ooma provides free home phone service by connecting to your high speed internet and existing phone. Ooma provides free home phone service by connecting to your high speed internet and existing phone.
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SAN FRANCISCO -- There's always been one drawback to Ooma's Telo "Free Home Phone Service" box: the need to hook it directly via Ethernet cable to your Internet router.

If the router was in a central location, no problem. But in your garage, basement or closet, connecting to it could be a real pain.

Now Ooma has upgraded the Telo with an adapter called the Telo Air, letting it connect over a Wi-Fi network and finally making it convenient as well as cost-effective.

The Telo is a flat black box that looks vaguely like an answering machine. Under the hood, though, it's actually a Linux-based special-purpose computer, the chief special purpose being to get rid of Verizon Communications, Comcast, or whatever other landline or cable company might be providing you with phone service -- along with its attendant bill.

Instead, you buy the box -- it's $250 with the Wi-Fi option, $200 without -- and get, along with your phone service, basic features including voicemail, caller ID, and call waiting. After the initial outlay, all you pay are taxes, generally $3 to $4 a month.

An optional $9.99 monthly premium tier adds a bunch of additional functions, including call screening, a second line for making or taking calls even when the Ooma service is already in use, and three-way conference calling.

The company also offers low-cost international dialing plans and a $30 Bluetooth adapter (formerly reserved only for premium customers, now available to everyone) that lets you use your wireless phone and headset with your Ooma system.

Like its competitors from Vonage Holdings and magicJack VocalTec, Ooma uses Voice over Internet Protocol (VoIP) which runs your calls over the Internet rather than dedicated phone lines or cellular signals. (So if your Internet service goes down, so does your phone.) Ooma differs from the other two in that you pay up front for the box but not for service. Vonage doesn't charge, and magicJack charges much less than Ooma, for their less powerful adapters. Both, however, charge for service.

If your router is easily accessible and you don't need the Wi-Fi feature, setting up the Telo is fast and frictionless.

To start, you go to Ooma's Web site to register the device, choose an area code and phone number, and enter information on your physical location, which is essential for handling 911 emergency calls. (You can also port your current number to Ooma, though that process can add expense and hassle.)

Then you use the included Ethernet cable to attach the Telo to an empty port on your router, plug it into the wall, and plug a standard wired telephone or cordless-phone base station into the unit.

It took me exactly 12 minutes from the time I opened the Telo box until I made my first call, and part of that time was spent looking through the old-cable drawer to find an RJ-11 phone cord.

The Wi-Fi option adds some mercifully one-time-only complexity to the process. The adapter, which Ooma is selling separately for $50, plugs into a USB port on the back of the Telo. You then have to connect the Telo to an Ethernet port on a computer (an annoyance if the computer happens to be using its Ethernet port to, you know, connect to the Internet).

Once the computer and Telo are connected, Ooma walks you through putting it onto your wireless network. At that point, you can disconnect it from the computer and move it anywhere you wish.

In the early days of VoIP, sound quality could be pretty bad. More recently, Internet service providers such as Comcast embraced it to break into the phone business. Now, assuming you have a halfway decent broadband connection, it's mostly indistinguishable from traditional wired phone service.

I connected the Telo to a multi-line telephone in my home whose other ports were taken up by traditional POTS (that's "plain old telephone service") landlines from AT&T. Except for one conversation in which my voice occasionally skipped a syllable, no one I called or who called me could detect the difference. Neither could I, except for the different dial tone on the Telo-connected line.

Internet connections are sometimes subject to blackouts of unknown origin, so you might think twice about the Telo as your sole service. But as a second line, or with a wireless phone as backup, it beats writing checks to the phone company.



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