VoIP uses technology that can translate analog audio signal, the signal traditionally used for telephone calls, into digital data that can be transmitted over the Internet and translated back to analog at the other end, if necessary. This technology can also be used without traditional phones, bypassing the phone company (and the outrageous fees) altogether. This technology has the potential to completely revolutionize the telephone industry offering a whole range of new choices for the consumer.

It is highly possible that this technology will eventually completely replace the traditional phone system.

There are several ways to take advantage of this new technology including both pay and free services available through the Internet. Some require purchasing new equipment to make and receive phone calls with a traditional telephone and others make and receive calls through your computer using the speakers and a microphone.

There are advantages and disadvantages to both methods with the computer method being available for free, but requiring your computer to be on and connected to the Internet in order to make or receive calls and the traditional phone method usually requiring the purchase of additional equipment and a monthly usage fee. Even with the fee, however, in most cases VoIP would prove to be a considerable savings over the standard telephone company's bill.

Actually, there is a good chance you are already using VoIP technology without even knowing it. Many of the big-name long distance telephone service providers are already streamlining their networks using VoIP. This technology takes advantage of sending information electronically in the form of packets instead of the traditional method of circuit switching.

By using packets the information is sent only when it is created as opposed the circuit method which leaves a circuit open for the entire duration of the phone call so that there is a constant flow of information in both directions even when only one person is talking or when nobody is talking at all. Since the packet-switching method only sends actual data as it is created there is much less information "traffic" making the whole system much more efficient.

VoIP phone plans usually include all the premium services such as call waiting, caller ID, call forwarding and three-way calling in their one low (or free) fee rather than charging extra for each of these like the regular phone companies do. This provides yet another advantage for the VoIP customer.

There are even more premium features that go beyond what a standard phone company is capable of, such as filtering calls and routing specific phone numbers to either another number or a predetermined recorded message. Imagine sending all telemarketers to a "this phone is no longer in service message."

The only potential drawback for some customers is not having access to a high-speed Internet connection. This can pose a problem for close to 50% of Americans who are still forced to use traditional dial-up connections. For the other 50%, however, VoIP is a viable alternative to the high phone bills and lackluster service they have been getting for years. The technology is still in its infancy and its popularity is likely to skyrocket in the coming years.