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Dump Your Landline, but Keep Your Home Phone


The Ooma Telo is helping slow the exodus to wireless by letting users make calls over the Web with their old phone—and phone number

Ask anyone under 30 for their home phone number and they may look at you funny. The landline business is in permanent decline. After peaking at about 141 million in 2000, the number of U.S. home phones fell to 78 million by the end of 2008, according to the Federal Communications Commission. While most of this erosion was the result of people going wireless, the FCC says some 19 million households replaced landlines with Internet phones.

For the last month I've been testing the latest Internet calling device, Ooma Telo, which offers people who might otherwise go all-wireless the security blanket of a landline-like phone. Recently redesigned and vastly improved from its unimpressive first-generation product, the $250 Telo is essentially a small computer that, when connected to the Internet, works with your existing home phone. For a one-time $40 fee, you transfer your existing home number, enjoy great rates, and eliminate your old phone bill. Think Vonage without the monthly fees.

Setup was straightforward, starting with creating an Ooma account online. Then I connected the device to my home router. After five minutes, the Ooma was ready for use. I tried it with a Uniden cordless phone, a 1980s-vintage AT&T (T) Trimline, and a wireless Ooma Telo Handset ($50). All sounded good; only two times—throughout more than 20 phone calls—did jarring echoes create an interruption.

Domestic calls are free, with some exceptions: No 900 numbers or phone chat services, and calls to 411 cost 99¢ each. There are also minimal taxes and fees—approximately $3.47 per month for most users. Subscribers also have the choice of upgrading to the Ooma Premier service for $9.99 a month or $119 a year. Unlike Vonage—whose plans range from $9.99 to $35 per month—Ooma's package is optional.

The Premier package has features your rotary phone never dreamed of: You can forward calls to your cell phone, and a Web-based voice-mail system lets you listen to your messages from any browser (or get voice mails by e-mail). International calls require prepaying—calls to France run from 2¢ to 5¢ a minute—and the Ooma works anywhere there's a fast Internet connection, including overseas, so you can take it on the road. Had the old phone companies been this flexible, they might not be watching their business evaporate.

Hesseldahl is a reporter for Bloomberg Businessweek.

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