From the April 2006 issue of Entrepreneur

How low can they go? How about 10 bucks a month? Long-distance rate-slashing is so infectious that one telco is offering all the North American long distance you can eat for $9.95 a month--and you don't need a broadband connection, a router or even a PC to get those savings.

You do need a little $19.95 phone dongle called Chatter Bug that Lagunawavesells online and through popular retailers. You plug the sausage-size Chatter Bug into the wall and plug your plain old telephone service line into it. Chatter Bug configures itself and automatically sends your long-distance calls to a Lagunawave server, where they're converted from analog to ones and zeros, then routed over the internet to your calling party's local phone exchange.

It's a different approach from broadband VoIP providers like Vonage that switch your calls to the internet at your router. All-you-can-eat VoIP rates start at about $25 a month--not an unreasonable sum. But of course, you also need the PC, router and broadband--even with free VoIP services like Skype.

"Not everyone in rural America has access to broadband," says Laguna-wave CEO Sean Ryan, "so we chose a simpler technology and a price everyone can afford." Although more than 99 percent of American homes have phones, 43 million can't afford long distance, Ryan adds.

Chatter Bug's only hardware requirement is the inexpensive dongle that routes your long distance. Depending on which retailer you buy it from, the first month of service might be free, and international calls are billed at rates comparable to VoIP providers. Service is initiated by registering on Lagunawave's website or by calling its toll-free number. In effect, you're simply making Laguna-wave your designated long-distance provider.

The current Chatter Bug passes through whatever phone company services you already subscribe to--as well as 911 and 411--and provides no services of its own. But a small-business version of Chatter Bug that can navi-gate office PBXs is scheduled for release within the next couple of months. It will bundle some of those premium phone services typical of broadband VoIP services.