Talk Is Cheaper

If you think the Internet is just about e-mail, you've missed the point. Expanded phone and fax services offer your business new communication options.
Magazine Contributor
7 min read

This story appears in the June 1998 issue of Entrepreneur. Subscribe »

Originally, the Internet was developed for university and government use, primarily to facilitate the transfer of text-based documents. That all changed in 1992, when the National Science Foundation took the first step in opening the Internet to private commercial development. The commercial sector expanded past simple e-mail and file transfers into multimedia applications that allowed Internet users to play music and view video clips on the Web.

Today, the Internet has advanced even further. It's now used for a variety of communications--everything from making long-distance phone calls and sending faxes to broadcasting live TV and radio programs. While some tools may seem frivolous at first glance, many have surprising relevance in today's business environment.

One main benefit to using the Internet for long-distance phone calls and other communications is cost, says Nathan J. Muller, author of The Totally Wired Web Toolkit: How to Use the Internet and World Wide Web as a Phone, Fax, Pager, Radio and More (McGraw-Hill). With traditional phones and fax machines, per-minute charges and high volumes lead to skyrocketing costs. But for some Internet telecommunications, the only charge is your monthly Internet access fee. "Now you can reach out globally, send information anywhere and not have to mentally tally the costs," Muller says.

Privacy is another advantage. Sensitive information sent through a standard fax machine is out in the open for all to see. Some Internet faxing services, on the other hand, send faxes straight to users' desktops, so they're only viewed by the intended recipients. Internet technologies can also bring your voice, fax and e-mail communications onto the desktop for easier access and improved collaboration among distant employees.

Going The Distance

The main attraction of voice transmissions over the Internet, known as Internet telephony, is the promise of lower rates on long-distance calls. To get up and talking, you need a multimedia PC with a microphone, sound card and speakers (or headset), and the proper Internet telephony software installed on your computer, or a telephone connected to an Internet Protocol (IP) telephony switch.

A popular program, available in Macintosh and Windows versions, is VocalTec Communications' Internet Phone ($49.95). Internet Phone's PC-to-PC capabilities allow you to make an unlimited number of long-distance calls to other PCs that have Internet Phone for the cost of your monthly Internet access fee. Internet Phone also boasts the ability to send and receive video over the Internet (a parallel port camera or video camera with a standard Windows-compatible video capture device is required) in addition to its various document-sharing and audio-conferencing capabilities.

Perhaps the best feature of Internet Phone is its new PC-to-phone capability for making calls over the Internet from your computer to standard phones. To do this, you must first sign up with an Internet Telephony Service Provider (ITSP) that offers service to the regions you'll be calling most frequently; some ITSPs charge an initial sign-up fee. Choose from the software's list of ITSPs, then click on the link to the ITSP's Web site and subscribe. (A user name and password will be provided.) You'll then have access to the VocalTec Telephony Gateway, which bridges the gap between the Public Switched Telephone Network (PSTN) and the Internet so your Internet call can be sent over the PSTN to a regular phone. Unlike PC-to-PC calls, PC-to-phone calls do have a charge--but it's a reduced rate.

Keep in mind that Internet telephony has been plagued by poor voice transmissions over IP networks. On the Internet, data is broken down into "packets" that are sent separately and reassembled at the receiver's end. Unfortunately, this means voice conversations on the Net are often subject to delays because of high traffic volumes, and sentences can get clipped or jumbled when put together on the other end. "The quality of voice conversations is still a big concern today and remains one of the major downfalls [of Internet telephony]," Muller says.

That's why some companies are creating their own high-bandwidth networks that carry voice, data and other traffic, and promise to deliver better sound quality. You'll have to pay for these services, but they're offered at discounted prices. Qwest ( offers a new service called for phone-to-phone IP telephony service carried over its advanced fiber-optic network. To place a long-distance call, a customer must first make a local call to access the Qwest IP network, enter a password and then dial the destination number; calls run 7.5 cents per minute--a rate considerably lower than those generally offered by standard long-distance carriers. is only available in nine cities so far: Salt Lake City; Denver; Kansas City, Missouri; and Anaheim, Los Angeles, Oakland, Sacramento, San Francisco and San Jose, California. Qwest plans to expand its service to 25 cities by mid-1998.

Similarly, Delta Three ( offers savings of up to 50 percent off international calls placed on its Global Internet Protocol Network. Phone-to-phone conversations run approximately 29 cents per minute. Service is offered to five international destinations: Bogotá and Cali, Colombia (45 cents); Hong Kong (28 cents); Israel (33 cents); and São Paulo, Brazil (48 cents). Customers must dial a toll-free number and enter an access code before dialing the destination phone number.

Delta Three offers discounted PC-to-phone services for voice calls over the Internet as well. You can download its free software, Internet Phone Lite, from the Web. Delta Three's Global IP Network serves more than 200 international destinations. A call from a PC in Moscow to a phone in New York costs 12.5 cents per minute using Delta Three, compared to the more than $2 per minute traditional carriers charge.

Although these new services are limited, experts believe they're a sign that Internet telephony is finally gearing up for the masses. For now, they're probably most useful for growing companies that want savings on frequent calls to specific areas.

Another sign that Internet telephony is preparing for prime time is the development of new standards, Muller says. While many Internet telephony products still require that both parties use the same software, this is changing, thanks to standards that allow compliant software to communicate. Products adhering to the G.723.1 international standard for Internet telephony applications will be able to interoperate, making them easier to use on a larger scale.

Just The Fax

At many companies, faxing contributes to high telecommunication bills. Because charges are based on the duration and distance of the call, costs can add up fast. Just like long-distance calling via the internet, faxing over the Internet slashes expenses. E-mail-to-fax gateway services allow you to send faxes this way.

For example, FaxSav's ( FaxLauncher Pro allows users to send faxes via the Internet from any Windows application; documents are delivered to receiving fax machines just as if faxed from a standard fax machine. There's a $29.95 activation fee and a $4.95-per-user monthly service fee.

Another e-mail-to-fax gateway service to consider is JFAX. Unlike other gateways, JFAX offers a receive-only fax-to-e-mail service. Establishing a JFAX number allows users to receive faxes and voice mail messages via e-mail. This may eliminate your need for a fax machine while allowing you to pool your incoming communications so they're easier to manage. Service is currently limited to approximately 50 cities worldwide. You can sign up for JFAX through its Web site ( or by calling (888) GET-JFAX. A private phone/fax number costs $12.50 per month (plus a one-time $15 setup fee).

The same problems that occur with Internet voice communications can also apply to faxing. If time is of the essence, be aware that Internet faxes can be subject to long delays--so you won't want to use Internet faxing services for high-priority documents.

It's important to recognize the limitations of these technologies and make adjustments. For instance, because sales calls require the highest level of professionalism, don't use Internet telephony for them and risk poor voice quality. Cutting costs is key, but don't compromise credibility. Try out these services with a small workgroup. If they're useful to your business, you can implement them on a larger scale as they become more widespread.

Contact Source

Nathan Muller,


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