IncTechnology.com > Telephone Systems & Services

When it Comes to VoIP, It’s Still Buyer Beware

Michelle V. Rafter — 2008-02-28T12:54:22-05:00

If a local telephone company runs into trouble, they’re required to give customers 30 days’ notice before they shut down.

If an Internet-based phone company shuts down? Nothing.

The boom in voice over Internet protocol phone (VoIP) service occurred so quickly that government regulations haven’t had a chance to keep up. As a result, businesses that use VoIP carriers don’t have the same types of protections should the provider run into trouble or go under as they would if they used a traditional phone company. State and federal regulators are working to close the gap. Meanwhile, companies using VoIP for any or all of their phone service are on their own to craft back-up plans.

VoIP started out as a software-based method for making phone calls through a microphone and headset connected to a personal computer. Since then, the technology has evolved so that it can be used on PCs and laptops or traditional telephone handsets, and soon, cell phones. Companies such as Skype, which offers free software for computer-based VoIP service, have caused Internet phone service to grow to millions of users.

Reasons for concern

There are legitimate reasons for VoIP users to think they might need contingency plans. Despite its popularity, some VoIP carriers remain on rocky financial footing. Vonage Holdings Corp., the country’s biggest VoIP phone service, has 2.5 million customers and is signing up thousands more a month. But it is losing thousands of others every month due to service problems, and in recent months has paid more than $239 million to settle patent infringement lawsuits, adding to its short-term debts and causing auditors to question the company’s ability to stay in business. SunRocket, another largeVoIPcarrier, abruptly closed its doors in July 2007 due to financial difficulties, leaving 200,000 customers in the lurch. When that happened, SunRocket competitors stepped in to pick up the company’s customers, and some even honored annual subscription fees some users had already prepaid.

State and federal regulators are slowly moving to bring VoIP regulations in line with rules governing other phone carriers. The U.S. Federal Communications Commission now requires that VoIP carriers offer 911 emergency calling services and pay into a universal service fund that subsidizes phone service for low-income families. The FCC recently passed a number portability regulation, so after March 24, 2008 customers who want to change carriers can take their numbers with them, according to Mark Wigfield, an FCC spokesman in Washington D.C. “The commission started with a blank slate in terms of what needed to be regulated and is going after issues in order of priority,” Wigfield says.

What you should do

If a company goes out of business, being able to take your phone number to a different VoIP carrier is a step in the right direction, Wigfield says. Other steps that small businesses can take:

Know what you’re getting. Use resources like The VoIP Mechanic or the FCC’s Consumer Fact Sheet on VoIP to find out more about services, plans and providers. VoIP Action, a VoIP industry news website lists information on terminology and plans, and has a checklist of things to consider when choosing a carrier.
Check out carriers before signing a contract. After SunRocket folded, former customers used public message boards to share their experiences of scrambling to find new phone service. In their posted comments, they suggested checking out a potential provider with the Better Business Bureau, reading customer comments on public forums and blogs to find out what kind of service history a provider has, and even switching back to land-line phone service.
Read contracts so you understand what remedies may or may not be available should something happen to the carrier.
If you have a complaint, file it with your state public utility commission or consumer protection agency, a directory of which can be found at the website of theNational Association of Regulatory Utility Commissioners. Some state agencies have created VoIP fact sheets, such as this VoIP consumer alert from the Vermont Department of Public Service. Or use this form to register a complaint with the FCC, says Wigfield, the FCC representative.

The issue of carrier stability could abate as more regulations take effect and more established players get into the VoIP business. T-Mobile, for example, recently introduced a $10 a monthly unlimited local and domestic long-distance VoIP plan for its wireless subscribers. Comcast, better known as a cable TV and Internet provider, has a similar VoIP phone service.

VoIP: What Are You Waiting For?

Mary O. Foley — 2007-06-22T11:34:15-05:00

It may just be time for small and mid-sized businesses to get over their fears when it comes to Voice over Internet Protocol (VoIP).

Early concerns kept many businesses from dropping traditional landline telephone service and signing up for Internet telephony in droves. A survey in January of 350 businesses with fewer than 500 employees found that only half trust the security offered today by Internet telephony providers, according to the Computing Technology Industry Association, a technology industry association.

Small business concerns with VoIP involve quality of calls, reliability of service, and access to 911-emergency services from VoIP telephones. The issue concerning 911 calling exists because VoIP calls provide no geographic location information to emergency responders since they use an Internet connection, making the caller’s whereabouts hard to pinpoint in the event of a crime, fire, or other emergency.

But the marketplace has responded with a wide range of business-grade VoIP and hosted-IP telephony products. Today’s offerings promise better sound quality with more functionality, flexibility, and cost savings.

Why is it the right time for your business to consider VoIP? Here are a few reasons:

1. Mobility and flexibility

“VoIP has great mobility features,” notes Ward Ross, principal with Hinsdale, Ill-based telecommunications consultant Thompson, Ross and Associates. Because VoIP phone service uses Internet lines, “You can take your phone anywhere in the world, have the same phone number, and be able to access your calls.” Small businesses with multiple offices “can appear as one office and have system transparency,” he notes.

In addition to this mobility, VoIP has the flexibility to integrate with other Internet-based services in ways a traditional telephone cannot. These include telephony during video/Web conferencing presentations, calendaring, or data file exchange.

2. Saves money

Beyond its superior flexibility, VoIP saves businesses money. Depending on the service you choose, you may be able to avoid paying for both broadband and telephone services -- or significantly scale back your telephone bills. Some providers allow you to buy broadband service and then calls over that broadband line are free. VoIP long-distance or international calls carry minimal charges, ranging from none to low. In addition, many VoIP providers, unlike the local phone company, offer three-way calling, call forwarding, auto redial, and caller ID without any additional charges.

Services run the gamut from free computer-based calling -- such as Skype -- to services that better simulate the telephone experience, such as Vonage, which offers small business service for as low as $39.99 per month.

While IP telephony systems can involve a major investment in hardware and IT staffing, there are also new hosted-IP telephony options available for small businesses. These include Aptela, costing $19.50 per user, MailStreet Voice at $39.95 per month, or the Asterisk business edition (using Asterisk open-source IP telephony), which is sold by Digium at $995.

3. Quality problems addressed

While open-source or lower-priced VoIP services still may fall prey to poor sound quality, such as “jitters,” echoes, or out-of-order voice transmission, an entire range of business-quality services has emerged. Providers such as Avaya and Cisco use Ethernet devices called IP-PBX systems to improve sound and data-transmission quality of VoIP service. These can also safeguard against the effects of power outages, which can knock out VoIP service but not necessarily traditional phone service.

4. Security issues are being tackled

Initial fears about the security of VoIP are waning, as more product lines offer ways to secure the lines. Companies like Avaya, Cisco, and Nortel all offer products with heightened security. John Gray of Nortel’s enterprise strategy marketing group, says that Nortel has taken a “layered approach” to security in its products, offering VoIP solutions that include firewalls, intrusion detection, and virtual LANs to protect multimedia VoIP uses. In addition to selling its solutions to VoIP carriers, Nortel offers its own line of small business options, notes Gray, including a new IP-PBX product with IBM.

But Ross believes the security issue just might be overrated. “Is your present telephone system encrypted? I don’t think so,” he says. Eavesdropping and wire-tapping of traditional telephones is actually much easier than to do than with VoIP, he says. “I don’t think this is as big a deal as people make it out to be,” he says.

5. Emergency calling options

With regard to 911 services, Ross says that most VoIP providers have worked through the problem of failing to offer emergency responders location information about VoIP calls by registering the location of its users when they subscribe. The biggest problem remaining, he says, is the use of Softphones, a specific phone designed to carry VoIP calls that remains difficult to detect. “This is something they’ll need to deal with,” he says.

Nonetheless, most small and mid-size businesses need to consider these developments in the marketplace in quelling their fears of VoIP so that they can finally take the plunge.

Does Buying Voice from Your Cable Company Make Sense?

Todd Wasserman — 2007-04-19T19:38:41-05:00

Over the past two or three years, the nation's top cable firms have made a concerted effort to target small and mid-size businesses for voice telephone service.

As a result, the business has gone from zero to more than five million subscribers and the prospects for future growth are bullish, says Elroy Jopling, an analyst with Gartner, the Stamford, Conn. research firm. "It's growing at a rate that's probably even astounding to cable companies," Jopling says.

The traditional telephone companies still have a lot of the pie left, though. According to The Yankee Group, of Boston, the top cable companies -- Comcast, Cablevision, Time Warner and Cox Communications -- have a total of six percent of the small business market versus 31 percent for the top telecom vendor, AT&T.

Advantages of cable

The cable firms have a big advantage over telecoms for now though: While the latter have refrained from promoting their cheaper voice over Internet Protocol (VoIP) service for fear of cannibalizing sales, the cable firms are all about promoting VoIP as an add-on to broadband service. Why? For the cable firms, voice revenues are seen as an additional source of income while phone companies see VoIP as a threat to their bottom line. Either way, however, VoIP is a cheaper option.

Small businesses that opt to go with cable firms for their voice service find their monthly bills are about 10 to 15 percent cheaper than with plain old telephone service a/k/a "POTS." Moreover, few take any issue with the voice quality, especially Mike Arden, principal analyst with ABI Research, of Oyster Bay, N.Y. Arden says that quality is mainly a problem when you contract with third parties. "The really inexpensive services can't control the quality," he says.

There are two ways to get VoIP service. One is to get a hosted service. The other is to install a PBX router over a broadband line. Arden says in each case, the grade of voice reception depends on the amount of bandwidth. Arden added that his research showed that small businesses often gravitated to cable-based VoIP so they can get more features for the same price as basic POTS, not necessarily because they wanted to save money.

Such features include things like unified messaging that let employees keep voicemails on their desktop PCs as audio files.

Voice as an add-on to a broadband buy

Cablevision, the Bethpage, N.Y., cable operator, began offering voice service in 2005. Joe Varello, vice president of product management for Optimum voice in the consumer and business markets for Cablevision, says it's digital, cable-based voice service is better than POTS. "You don't experience some audio anomalies like static and hum," he says.

Varello says voice is most often an add-on service to a broadband buy. With such service, voice usually costs about $30 a line per month and customers usually opt for features like voice mail, Caller ID, call waiting and a feature called VIP Ringing, which emits a special ring for notable callers (like a respondent to a sales pitch). Most customers also usually have a PBX box in house to handle the call routing.

Gerard Cerniglia, co-owner of Rolling Thunder Cycles, a Hempstead, N.Y., motorcycle dealership, signed up with Cablevision about a year ago for his voice service. His impetus was buying broadband from the cable, after he tried DSL from a telephone company but found it too slow. He thought cable was too expensive, but when he found out he could get voice as part of the package, he was sold. Now he gets all his voice calls for $35 a month and is thinking of adding a line for the seven-person operation.

Cernigilia said the voice quality is great. "I've never had a problem with it," he says.

On the other hand, Jopling points out that the telecoms have a tremendous asset in their favor: inertia. "If you're starting from scratch, you'd probably go for cable," says Jopling, "but if not it's a case of 'if it's not broken, why fix it'?"

How to Choose a Long-Distance Plan

Damon Brown — 2006-11-29T16:58:16-05:00

Deciding on the right long-distance calling plan is as important for your business as finding a good Internet service provider or determining the best express mail service. Technology has opened up more options than ever before.

Here are six tips for finding the best phone plan for your business:

Tip #1: Go rate shopping each year

Phone company rates aren’t static. More importantly, the needs of your company will change over time. “It would also be wise to check rates again at least once each year,” says Stephanie Chandler, founder of BusinessInfoGuide.com, a Sacramento, Calif. based newsletter and website for entrepreneurs and start-ups. “You can potentially save a lot of money by shopping for the best long distance plan on an annual basis.”

Tip #2: Consider a cell phone-based plan

If you have a highly-mobile business or need phones for only a few employees, experts recommend considering cell phones. Furthermore, nearly all cell phone carriers charge the same for local and long-distance calls. “Since cell service gets more reliable every day and most include long distance, this can be a viable option for many small businesses,” Chandler says.

There are a few big disadvantages. One, there are limited minutes during normal business hours, which are 7 a.m. to 9 p.m. weekdays for most cell phone carriers. Two, a basic phone line may still need to be installed and maintained for Internet and fax usage (though a local-only line can be significantly cheaper). Three, make sure the carrier's coverage is good in your office.

Tip #3: Consider Internet-based calling

Vonage and other new phone companies now offer long-distance calling via Voice over Internet Protocol (VoIP), which allows your business to call people for less by routing communications through the computer. Monthly fees are around $40, and often include a fax line, call forwarding and caller ID. Unfortunately, the service requires a special phone adapter, broadband connection and, most bothersome, no Web surfing while a call is being made (splitting the modem feed would be required).

VoIP is fairly new technology, but AT&T and Qwest are now offering packages. “If you want to tiptoe in, try a company with a money-back guarantee,” recommends Kim Komando, Microsoft Online's workplace technology expert. “And make sure you understand the terms before taking the plunge.”

Tip #4: Join organizations for group discounts

The Small Business Association, the National Business Association, and other organizations often offer deep discounts on long-distance services. Networking with other businesses is always a good idea, but weigh the potential savings against the cost of membership.

Tip #5: Separate local and long-distance services

While packages can save money, experts say separating local and long-distance services may save additional money. More creative types can use a flat-rate cell phone for long distance and a traditional line for local calls. Also, provided you have the patience to dial some extra numbers, using a phone card will give a cheaper per-minute average. “A prepaid long-distance card can cut costs if you don’t make many long-distance landline calls,” according to Consumer Reports. The publication estimates it can save businesses a few hundred dollars annually.

Tip #6: Ask for estimate based on usage

Measure or calculate your likely call usage. Ask potential providers for a rough estimate of your potential monthly bill. “If they can’t answer this question in advance, then choose another provider,” Chandler says.

Tips for Offering a Toll-Free Number

Caroline Waxler — 2006-11-20T20:15:33-05:00

The two entrepreneurs who founded 1-800 CONTACTS, a contact lens company based in Draper, Utah, back in 1995 believed very strongly in the value of an 800 number. "So much so that we named our company after one," says Kevin McCallum, the company's current senior vice president of marketing and operations.

Having a toll-free number, not to mention a memorable number, has been a boon for business. The company now has more than $200 million in yearly sales. "It cuts through the clutter by taking one key step out of the calling process," McCallum says. "Your potential customers can either look in a phone book for your number where they are exposed to a myriad of competitive ads before they call or they can just remember your number and pick."

Sending a message

A toll-free number says you care about your customer, according to Anita Campbell, the editor and CEO of Small Business Trends, a business blog that examines the small business market, and a columnist for Inc. Technology. On a really simple level they appeal to customers. What's not to like? It's a free call.

Beyond that, a toll-free number can help reduce the perceived geographic walls between a company and its potential customers, says Steve Hilton, an analyst with the Yankee Group, a research firm based in Boston. "It makes a business seem more national or international in scope rather than local," Hilton says.

It also sends a message to customers that they can easily reach a representative from your company. "A toll-free number is one piece of a marketing and sales execution strategy," Hilton says. "It provides one of many ways for a business to touch its customers/prospects and allow customers/prospects to touch a potential vendor," says Hilton.

But at what cost

Prices for the toll-free numbers have dropped recently.

A competitive toll-free service plan might go for as little as $10 a month, says Campbell, and less than five cents per minute for incoming calls on your toll-free line. But keep in mind that there is a risk of getting high phone bills from people calling your business on that line, particularly international callers. But there's a way around that. "Some toll-free numbers do not allow international in-calling," says Hilton, "so a business can mitigate its international telecom risks if it wants."

Keep in mind though there are supposed to be costs, particularly marketing and sales costs, associated with it, in return it's supposed to increase your revenues. "It's a trade-off all businesses can make," says Hilton. "Generally a toll-free number is a marketing and sales tool."

Take it with you

The 1-800 numbers are still the standard. To see which numbers are available -- especially if you want to grab a really memorable one, like 1-800 CONTACTS -- go to SMS/800 of call their help desk at 1-888-SMS-3300.

One thing to note is that these could also offer a cost savings to the business because they are portable. If your business moves from Philadelphia to Pittsburgh or Peoria to Paoli, you don't have to get all new phone numbers. With the toll-free one, you are all set.

Man can not live on toll-free numbers alone

Toll-free numbers should be viewed as just one piece of a small business's marketing and sales puzzle, says Hilton. "Toll-free numbers can be part of a call-to-action when small businesses do marketing outreach to prospects and customers," he says. "But, they also need to consider an online presence with appropriate e-marketing or e-commerce functionality to drive their business forward."

However, with all of today's technological advancements, no conversation about toll-free numbers would be complete without answering the question of whether all this talk is moot given low-cost telecom options, such as Voice Over Internet Protocol (VoIP) and free-calling through services such as Skype.

As of yet, there is no way to offer a toll-free number in direct conjunction with Skype, Hilton says. "The best you could do is get a Skype account and link a series of phone numbers with different country and area codes to that account," he says. "It wouldn't be a true toll-free number, because you can't have unlimited numbers linked to a Skype account."

Is RFID Right for Your Business?

Todd Wasserman — 2006-11-16T10:00:55-05:00

If your company ships goods that are perishable or expensive or you're interested in becoming a supplier to Wal-Mart, Target or the U.S. Department of Defense, you may have reason to consider deploying radio frequency identification (RFID).

The truth is that many small businesses may be able to get by without implementing RFID for the next few years. But while you wait, your competitors may already be benefiting from early adoption by realizing return on investment from automating receipt and shipment of goods or by becoming a supplier for one of a growing number of big firms and organizations -- Wal-Mart, Target and the DOD included -- that have adopted RFID and required their suppliers to do the same.

How RFID works

RFID is a technology in which small, cheap tags are attached to items or cartons or pallets of goods and are automatically read and tracked by a computer system. Many regard RFID tags as the new bar-codes to help businesses track and trace goods through the supply chain. But there are already several examples of RFID now in use by a wide variety of people, including toll-collection systems like EZ Pass, the microchips veterinarians insert into pets and instant payment credit cards that no longer need to be swiped.

For small businesses, the use of RFID is likely to be more along the lines of Grantex, a Grand Rapids, Mich. uniform rental company. In 2001, Grantex bought an RFID system for a little over $1 million. The company now sews the chips into uniforms. When the company washes the garments, an RFID system reads the chips and automatically sorts the uniforms so they go back to the right companies.

Doug Singer, Grantex's president, says that since he installed the system, there has been a 36 percent reduction in labor costs and a 21 percent decrease in uniform costs. Partially, that's because uniforms can no longer be lost or stolen. Unless you rip the tag out, the uniforms are like a lost dog with a microchip -- easy to locate. The company used to use bar codes for the sorting function, but the RFID tags are much tougher, Singer says. "Our goal is to attack grease, oil and dirt and we do a darn good job of it," he says. "If we had bar codes, they would just come off."

Small firms can get big benefits

Singer says RFID lets Grantex, which has about 50 employees, operate like a much bigger company because it can handle a large workload (the company regularly services about 10,000 uniforms). Other small- to medium-size businesses that need to track inventory are also adding RFID. A study by Gartner Dataquest found that 40 percent of such inventory-intensive businesses planned to install an RFID tracking system by the end of last year.

But for most small businesses, RFID won't be a big priority for a while, says Mark Johnson, president of RFID Tribe, a Dallas-based professional association for the RFID trade. "It's very useful for any organization that has many, many objects to track," says Johnson. "But if you're a mom-and-pop, a clipboard and a No. 2 pencil does fine." Johnson says that a bare-bones RFID system would probably start at $10,000-20,000, but it wouldn't do enough to make a difference in operations.

Realizing ROI from RFID

Andy Nathanson, practice director for RFID for Venture Development, a Natick, Mass., market researcher, says most RFID systems will cost around $250,000, but the companies that use it realize ROI within 18 months. The good news is that the prices are coming down. Tags that used to go for 25 cents are "now approaching the 10-cent barrier," he says. Still, unless you track items that are worth more than $25, are perishable or are easily copied, RFID shouldn't be a top priority right now.

The exception to that is if your firm does business with Wal-Mart or the Department of Defense, both of which require suppliers to use RFID. One way to approach this is what Johnson calls "slap and tag," that is, just putting tags on merchandise without installing an RFID reading system. But even that can be expensive. "People say it's only a quarter or so, but we're talking about millions and millions of products," he says. "It adds up."

The Inc. 500 Interview: The Low-Down on VoIP

Tara Swords — 2006-11-13T18:06:05-05:00

In order to save costs, many companies are considering switching their traditional circuit-switch telephone service for Voice over Internet Protocol (VoIP), calls routed over the Internet, sometimes for free. Founded in 1999, BullsEye Telecom, of Oak Park, Mich., is an integrated provider of local and long-distance telephone service, VoIP and high-speed data services. The company was No. 82 on the 2005 Inc. 500. BullsEye Telecom’s CEO Bill Oberlin talks about how small and mid-size businesses can determine the right time to adopt the new telecom services.

Inc. Technology: What are the practical differences between VoIP and traditional telephony for an business owner who isn’t familiar with the technology?

Bill Oberlin: In the old days with old voice service, you have a pair of wires entering a home or office and you have one pair of wires that takes your call, provides a dial tone, and takes calls inbound or outbound. And you have one telephone number. Today, two pairs of wires are capable of providing high-speed Internet at T1 speed, and as many voice lines on that same line as you possibly could offer before there’s any kind of congestion. It’s a different type of telecom. It’s getting better all the time because all the equipment that we use, as well as others, are finding all of their glitches that they might have had a year ago that they’ve removed. So today we have an awful lot of customers who get it installed quickly after they order, never have a problem, get all the features that we provide -- many [more] features than you could ever get on a traditional voice line -- and they get the T1 to boot. And they pay a lot less.

Inc. Technology: Why might a small business owner want to stick with traditional telephony?

Oberlin: Afraid of change. In some cases, it might be cheaper, especially if you don’t want a high-speed connection like T1. And they’re not telecom experts. They’re experts in their field … and it’s hard for the ordinary businessman to know what’s risky. They say, you know, “I’ve been doing this for 20 years and I’ll continue doing it until somebody tells me VoIP is foolproof.”

Inc. Technology: What concerns do you hear when people express hesitance about switching to VoIP, and which concerns are still warranted?

Oberlin: One of them is, “Well, I know people can spy on my data or my voice if I use the Internet.” Security concerns. Frankly, there’s no more concern than there is with what they do in their office every day with their data. If they’re a terrorist talking to somebody about blowing up the World Trade Center, I guess they ought to be worried. But outside of that, I don’t think VoIP has any more or less security concerns than traditional voice would, or than your cell phone. I think the second thing they worry about is when they have a fax machine on a separate line, a high-speed Internet connection on a separate line, and voice on separate lines -- let’s say five lines. Now I put them all together on one line and if I lose the one line, I lose everything. We provide a disaster recovery plan for them, which has to do with how we arrange the technology. We can also keep one line or multiple lines separate from the T1.

Inc. Technology: If you’re a business that is satisfied with traditional telephony, is there any reason to switch to VoIP or is it better to wait for a catalyst such as rapid growth?

Oberlin: There are two kinds of VoIP. The first kind is where their telephone system really is too large or too small. It can’t be integrated well with new technology. They’re up to a point where they’re going to make a decision, so they make a decision to go with an IP telephony system. They’re well equipped for the future. The second is where people are perfectly comfortable, nothing is wrong. They’re not growing out of their system, they’re not shrinking where they could probably get rid of their system, and they like their system. One of the ways we do business is they don’t have to change their system at all. We make them VOIP and we can tie in all those other things by providing equipment that sits in between their LAN, their telephone system, and us. This box allows them to have more lines, to not disrupt their telephone system. They don’t have to make a capital investment, and they save money and get higher speed data.

Inc. Technology: What are some of the features available with VoIP that aren’t available with traditional telephony?

Oberlin: Somebody with 10 branches can cut out all of their long-distance calling to those branches just by calling four digits as an on-network call. The biggest thing, I think, is what’s called simultaneous ringing. So it’s a small business and Joe Jones has office number 1000, and Joe is often times at home working or on the road. He can have anybody that calls that number either call his cell or his home, and whichever phone he answers first, that’s where he gets the call.

Broadband Basics: Cable vs. DSL

Todd Wasserman — 2006-11-13T17:38:33-05:00

For most small business technology applications, price is the top consideration. But when considering high-speed or broadband Internet service, that top consideration needs to be speed.

That’s because slower broadband access will likely cost more money in the long run in the form of lost productivity. So, for a small business owner, the question of whether cable is faster than DSL is a salient one. The answer?

It depends. Cable firms advertise speeds of up to 6 megabits per second (Mbps), but to quote a well-known auto ad disclaimer, actual speeds may vary. Because cable relies on shared bandwidth technology, if a lot of users are on at once in the immediate area, they will slow the connection. Average speeds for the telcos’ broadband rival to cable, digital subscriber line (DSL) service, go as high as 1.5 Mbps, but that rate tends to be steadier since bandwidth isn’t shared outside the office. Actual speeds, of course, vary from minute to minute for both.

Small business traditionally preferred DSL

More small businesses have traditionally gone for DSL. This year, 35 percent of businesses with fewer than 500 employees will have DSL versus 25 percent for cable, according to The Yankee Group, a Boston research firm. (The rest of the pie is divided by dial-up, “none” or T-1, the latter of which can be DSL or cable.) That’s changing. Over the last three or four years, many cable firms have begun targeting small businesses. “The cable companies are doing a smashup job talking about speed, speed, speed,” said Yankee Group director Steve Hilton. “It’s worked.”

In response, telcos have slashed rates for DSL. Covad, a DSL provider based in San Jose, Calif., dropped its prices 30 percent over the last 18 months. Cable companies haven’t responded to the price war, so they tend to be more expensive. Covad’s DSL starts at around $50.

Hilton says $90 a month is around the average a small business can expect to pay for either cable or DSL. Companies typically waive a set-up fee in return for a year or more contract.

Many upgrade to T-1

The question for many fast-growing businesses is whether DSL or cable broadband service is fast and/or reliable enough. Many companies opt for the more expensive and robust T-1 service, which telcos and cable firms both provide. David McMorrow, vice president of sales for Covad, says his technicians can repair a busted T-1 line in about four hours, versus 12 to 18 hours to fix a standard DSL connection. “Businesses can’t tolerate their Internet connection being down,” Hilton says.

Your business will pay for the better service, though. T-1 averages around $400 a month. But it guarantees small businesses consistent speeds of 1.5 Mbps and up.

Thermal Dynamics, an Ontario, Calif., firm that makes oil coolers and power steering coolers for General Motors’ Hummer and Ford’s Mustang, respectively, bonds three T-1s to get an average speed of 4.5 Mpbs. The firm, which has about 300 U.S. employees, pays about $1,200 a month, which includes on-call support from Los Angeles T-1 provider TierZero.

Hanns Schweis, IT director at Thermal Dynamics, says it’s worth the extra expense. In three years, the network only went down once and that was Verizon’s fault, not TierZero’s. Plus, the connection is fast. “Speed was a big issue,” he says. Jim Gurol, vice president of sales for TierZero, says small firms want fast pipes, too. “If their business relies on the Internet, they’ll spring for it,” he says. “We’ve got Web consultants that run a one- or two-man shop that use it."

Best Office Phone Systems

Rich Martini — 2006-09-28T15:24:27-05:00

The importance of a telephone system to a small or medium-sized business can not be overstated. Like a storefront or sign or a website, the phone system often is the first interaction a customer will have with your business.

"When people see your company for the first time, that first impression is made," says Will Lombard, vice president of marketing and sales at Seventhman, a Jacksonville, Fla. Web development company "When they call you, there's a first impression that's made through your phone systems."

It can be a tall order to find a phone system that matches business needs for call forwarding, speaker settings, and multiple lines, with the need for something that is user-friendly enough for employees to master in a day. Here are several off-the-shelf phone systems that meet the bill and don't require rewiring the office.

AT&T 5840 $119
The 5840 has the superior 5.8GHz frequency for a larger office; supports five additional handsets (not included); has an integrated digital answering machine; a speakerphone in both base and headset; and decent audio. Not suited for shoulder chatting, but sports a decent speakerphone. Capable of storing 50 names and numbers storage. What's cool: It's Wi-Fi-friendly. Blue lights in the base tell whether it's in use or charging, or that messages are waiting.

Polycom SoundStation2 EX - $119
It has a flying wedge design and is expandable; extra desktop microphones can be added if needed. Each of the console's three legs contains a built-in microphone, giving it extra wide sound coverage for up to 10 feet. What's cool: The mic closest to the person talking reduces noise from the other mics. The phone book holds 25 searchable entries, and has an adjustable ringer.

Uniden TRU-8885-2 - $119
Wi-Fi friendly. Also, with 5.8GHz reception, it supports 10 handsets. This Uniden includes two handsets and a separate charging cradle for the second. The base speakerphone serves as a third phone. What's cool: Handsets can be used as walkie-talkies in Uniden's DirectLink mode or for baby monitoring. Also has four-way conferencing.

Panasonic KX TG6502B - $269
Cordless phone with call waiting, caller ID and an answering system. Supports four handsets, has conference call capability, intercom, hold, mute, flash and redial buttons. What's cool: There's also a waiting caller ID, so you know who's calling in next.

Polycom SoundStation Premier - $399
The flying triangle design has been successful enough to become ubiquitous in conference rooms everywhere, and its sleek design and sound quality are top grade. Not being wireless, however, means fumbling with wires in order to move it from its station. What's cool: The remote control can come in handy, as long as you remember to use a mute button properly, so that the mute is actually muted.

ClearOne Max Wireless Conference Phone - $419
Wireless 2.4GHz conferencing phone, the base has a built-in power supply, making it portable for conferences. What's cool: It's got the six-sided wedge design. The speakerphone is rechargeable and features an LCD and a keypad.

Olympia OL6010 - $499
Although the price is relatively steep, this wireless unit is good for the mid-sized office. 2.4GHz, has a two-line monochrome screen which displays talk time and battery life, mute, and signal strength. Typical battery life for cordless phones is six hours. What's cool: The oval-shaped base station is battery powered, so it moves with the phone.

What Kind of Cell Phone Plan Do You Need?

Damon Brown — 2006-09-18T18:51:56-05:00

Choosing the right cell phone plan is as important, if not more important, than choosing the right cell phone. Dollar-per-minute overages, a lax assortment of features, and inadequate network coverage can cost your business hundreds of dollars. That cost gets multiplied by the number of phones your staff requires.

The 200 million cell phone subscribers in the U.S. last year spent a total of $113 billion on service, according to the Cellular Telephone Industry Association. But the use of wireless services by U.S. businesses -- which have expanded to data, e-mail and Web browsing -- led to an estimated $15 billion in productivity gains by companies, a 2006 CTIA report says.

Since cell phone service can help companies be more productive by allowing traveling employees to make calls -- or send e-mail -- from the road or from home, it's vital to select a calling plan that best suits your business needs. In order to figure out what type of service is best for your company, consider some basic questions about your business before signing up:

How many phones do we need?

All major carriers -- including Verizon, T-Mobile, Sprint Nextel, etc. -- offer business plans geared towards multiple phones, which include three-way talking and other bonus features. Not all of them support unlimited off-peak minutes (traditionally from 9 p.m. to 6 a.m.), although they can offer discounts based on the number of phones.

If only a few phones are needed, consider doing a (sometimes cheaper) family plan for your business. Family plans simply encompass two or more cell phones. The base plan will cost a few dollars more than a single phone setup, but adding additional phones as your business expands is an easy and inexpensive process. Be aware that some plans require that every member get the same type of phone.

Another alternative method is the so-called "circle" option, which allows you to put certain people -- maybe your employees or top clients -- in your calling circle and call them for little-to-no charge. It requires that they have the same carrier.

Will most business be done during the day, night or weekends?

This is perhaps the most crucial decision in choosing the right cell phone plan. All carriers give a baseline of minutes per month, sometimes called a "bucket," that can be used anytime. There are generally two types of plans: anytime plans and anytime plans with bonus minutes.

Anytime plans: With this setup you receive X amount of minutes per month (usually in the thousands).
Anytime plans with nights and weekends: You get the standard minutes per month along with free minutes, usually offered every evening and weekend. Evening call time traditionally lasts from 9 p.m. to 6 a.m., with weekends marked from 9 p.m. Friday to 6 a.m. Monday. Non-bonus plans tend to have more anytime minutes, but bonus minutes can be a money-saver if most of your calls are done during off-peak times.

Who will pay for incoming calls?

The majority of pricing plans require businesses to pay for both outgoing and incoming calls. That's true also in the case of "bucket" plans. When you pay for minutes per month in one lump amount, or bucket, the minutes are usually withdrawn for both outgoing and incoming calls, according to the U.S. Federal Communications Commission. However, some carriers are starting to offer new pricing plans where all or some of the minutes for incoming calls are free to the phone subscriber.

Will our monthly talking time fluctuate?

Basic cell phone plans are usually less than $50 per month, and those can cover 100 minutes or more of speaking time. But go over your allotted monthly time and the minutes are prices at an a la carte rate -- usually a pricey $.50 a minute or more. On the other hand, basic plans do not pro-rate your minutes per month, so you're not going to get paid back for unused time at the end of the cycle. If you expect to have wide fluctuations in use, consider a "rollover"; plan that allows you to carry unused minutes into the next pay cycle. Cingular is known for this type of service. But other, smaller carriers are starting to add it as well.

Will my employees be traveling around the country?

Most carriers divide their services into regional plans and national plans. Regional plans cover radius near your business, including several miles. National plans cover several regional areas throughout the country. Making calls outside of your designated area(s) is called "roaming," an action that will cause your per-minute-fee to jump considerably. "[With national plans] roaming and long-distance charges effectively go away [and are] replaced by a single, predictable flat rate," according to Wireless Guide, an organization that compares offerings of different calling plans. "Nationwide calling plans are a good value for heavy users who are frequent travelers."

Will my employees be traveling around the world?

Every major carrier has international plans that give discounted rates for calls to and from foreign countries. This is often an addition to your traditional plan. Carrier rates vary from country to country, so be sure to ask about a specific area's fees if you favor a particular country.

According to The Travel Insider, a website for business travelers, it may just be easier to have employees rent a phone when traveling abroad. "Renting a phone is a sensible option if you travel very infrequently, and have no special 'power user' type needs," the site says. "However, if you expect to be renting a phone several times over a couple of years, it is popular cheaper and better to purchase a phone."