How VoIP services define "unlimited"

I don't understand the legality of it, but they all do it. They all advertise their product as providing "unlimited" free calling - and then put limits on it.

We are used to minute bundles on our cell phones. We buy plans that include 500, or 1000, or whatever "free" minutes per month. However, in the VoIP space, they provide the same type of plan but they call them "unlimited" - I don't get it.

Here are a few examples:

• Vonage
  The terms and conditions summary defines "unlimited" as "normal use." Looking further, "normal use" is defined as less than 5,000 minutes per line per month.


• Comcast
  Comcast is less clear, but their terms of service say that they "reserve the right to limit or block any usage as deemed necessary to prevent harm to its network, fraud or abuse."


• Skype
  Skype places a limit of 10,000 minutes per month on its "unlimited" plan, with a maximum of 6 hours per day.


• ooma
  According to an Ooma FAQ: "Like all other 'unlimited services,' such as cell phone data plans and other VoIP services, we do have a limit of 3,000 minutes per month (for outbound calling) that we can enforce on a case-by-case basis in the event that a subscriber is clearly abusing the service."


• MagicJack
  MagicJack is the least clear on the matter. They say they do not have limits, but customers report being disconnected at around the 30 minute mark (some report 60 minutes). Other users have been disconnected after they exceeded a certain unspecified limit of free calls in one month. Recently, their terms of service were modified to define "unlimited" as not more than 20 times average usage. What's average usage? About 100 minutes a month. Apparently, MagicJack is having some difficulties trying to get a handle on what limits they want to enforce on their "unlimited" service.

People often say "It's not lying, it's marketing." Well, maybe - but it is lying, too. The definition of "unlimited" is:

1 : lacking any controls: unrestricted

2 : boundless, infinite

3 : not bounded by exceptions

Further, claiming a service is "unlimited" is a statement of fact, not of opinion, so can't be excused in the same manner as phrases like "bolder than bold."

The other defense you often hear goes like this "I will never hit these limits." I think that completely misses the point. How one uses an "unlimited" plan is completely different than a capped plan, especially a plan that has potential overage charges, as all of the above do. If you know you might get charged if you use more than X minutes per month, you're going to use the phone differently and you're going to want to know whether you're running anywhere near those limits. With the services above, what's even worse is that, in most cases, you can't even check your usage to see if you're near the limit. If you go over the "secret" limit, the company can charge for "overages", without notice and without your prior consent.

It's terribly unfortunate that marketers are allowed to use outright lies like this in their primary marketing message as long as they disclose the actual terms somewhere (buried deep in the fine print). I don't understand how they're allowed to get away with it.

These plans should be called what they are, such as "3,000 minutes per month" - NOT "unlimited" plans.

Ooma quietly adds a 3,000 minutes per month limit on their "unlimited" calling

I didn't see any announcements of this, but it was recently pointed out to me that the Ooma terms of use now includes a limit on "unlimited" calls of 3,000 minutes per month:

In addition you agree that any usage of more than 3,000 minutes per month will be deemed dispositive proof of Prohibited Use. In the event you engage in Prohibited Use, ooma reserves the right to terminate service without notice or, at ooma's sole discretion, to charge you at a rate specified on our Web site for calls that exceed the 3,000-minute per month limitation. This rate may be modified on our Web site from time to time.

That's probably more minutes than most people use. But if you're using less than 3,000 minutes per month, maybe you don't want an unlimited plan at all. You might be better off with a cheap pay as you go, per minute plan, depending on how long you think the Ooma box will last (service is for the life of the box, not the life of the purchaser). Most people will spend less than $20 per month, often far less, paying only for the calls they make. Think about how many calls you make on your cell phone instead your home phone - Ooma won't help you there. Or there are always annual plans like those from Skype and Magicjack to think about ($20-$40 per year - and also have similar monthly usage limits). Such plans equate to 8-10 years of Ooma service, and you don't have to pay so much up front. Will the Ooma hardware (and the company) last 8-10 years? Maybe, but it's something to think about, especially with these new 3000 minute per month limitations.

ooma hanging on

Om Malik reports: Ooma not dead, yet, the keyword being "yet"

The price of their device + domestic calling plan was supposed to go up in 2008. Those that paid $399 last year, were told they were getting a special price, saving $200 over the "real" $599 price.

Instead, now they learn that they paid $150 MORE.

Om suggests the $99 PhoneGnome as an alternative. It doesn't include unlimited domestic calling, but does offer free calls to 20 something countries, and things like support for mobile phones, voicemail to email, softphone, Asterisk, Skype, and other stuff that ooma doesn't have.

Skype dominates VoIP (at least outside US)

According to IT Wire, Skype accounts for 95% of all VOIP on the net, but only 1% of the bandwidth. The study claims to have looked at three petabytes of anonymous data representing over one million users in Australia, Eastern Europe, Germany, the Middle East and Southern Europe during August and September 2007

P2P (file sharing) is the dominant consumer of bandwidth, accounting for over 90% of Internet bandwidth during the night, according to the research.

How can I get free VoIP?

As someone said, there is no free lunch. However, there are some companies providing free, or near free calling, usually with certain limits.

Before we get to that, let's talk about what's not free. Paying $25 per month to get "free" calls is not free. Therefore, we're not talking about such things here.

The main reason that VoIP companies offer free calls of one kind or another is to lure customers into purchasing credits to make calls to paid destinations. But we have to realize that while VoIP calls are very cheap, they are not completely free. Somebody is paying for the "free" calls and eventually those chickens have to come home to roost.

PC to PC, and PC to Phone calls

There are many services available for calling from a PC to someone on a PC, Skype being the most well known. You can call inside the Skype network for free. But if you want to make calls to regular landlines, you'll have to pay. The subscription fee for calls in North America is $30 per year. It's not a great deal of money but it still isn't free (this option applies only to calls made from within the US and Canada).

Other services in this group include GizmoProject, Free World Dialup, and dozens of others.

Phone to Phone

There are fewer choices for free calling from a regular phone to a regular phone. Here are three of note:

Jajah

Jajah doesn't push their free calling aspect very much. They are more often described as a way of making cheap calls. The way the service works is you register your number and if the person you're calling also registers, you can call each other free, if you initiate the call at the Jajah website. There is a lot of fine print on "free" calls and perhaps this is why the service isn't well known for this feature - but supposedly you can do it.

PhoneGnome

PhoneGnome is a very inconspicuous service that works like Jajah above, but the service appears to focus on free calls between members more than paid calls (which are almost hidden on the website). People can register their numbers and then call each other free. The service is free for both mobile phones and landlines in the US and Canada, but landlines-only outside the US. Other numbers can use the service, but they must pay a per minute fee to place calls.

Both PhoneGnome and Jajah have somewhat complicated pricing schemes for paid calls, that is, calls made from or to numbers that are not free (for whatever reason).

Both companies also have so-called "Fair Use" policies that put restrictions on the volume of free calls - but this is reasonable given that these companies are giving us something for nothing.

Jajah says the following:

JAJAH asks its customers to pay from time to time. If you choose not to pay, JAJAH may need to limit your free minutes. To take advantage of free minutes, users should deposit funds into their JAJAH account.

Again, I'd say that's fair. A lot of people complain that this kind of thing is a "rip-off", but I disagree. When they start playing bait and switch, that's one thing, but I think placing reasonable limits is perfectly fine, as long as they are transparent about it. You are getting a free service after all.

One thing I don't think is reasonable is the practice of random charges out of the blue, without warning, which has been reported about some of the services like VoIPcheap, VoIPbuster etc.

Jaxtr

Jaxtr is another similar service, except instead of the service calling your phone when you place a call and then connecting you to the called party (which is how the above two work), with Jaxtr, the people that want to call you get a local telephone number to call you on. Instead of phone numbers, you know "friends" on Jaxtr by their email address. Jaxtr gives you a number for each "friend" (that is supposed to be local to you). When you call one of these numbers, it rings to that friends real phone (but you never need to give out your actual number).

Jaxtr limits users to a certain number of free calling credits each month and this seems to vary with the kind of account one has (they call them "jax") And, again, there is a complex scheme for the actual call costs (reminds me of "message units"). At this time, Jaxtr is still in Beta, and doesn't offer a way to buy additional credits.

Final Thoughts

Another important note. All this free calling generally applies to the same set of countries, or more directly, it always excludes places where there are few low-cost calling options, such as India, Africa, and the Middle East. There are VoIP options, including those listed above, that might be able to save some money for calls to/from these regions, but there are no free options. (If you're willing to buy a $99 hardware box, you can use the PhoneGnome service free in any of these regions).

In conclusion, as we state above, there really is no such thing as completely free VoIP, but there are ways to make zero-cost calls and significantly reduce your phone bills using a combination of free and low-cost calling options. This means that you will need to put some time and research into it, but in the end you can achieve almost free calls using VoIP technology and services.

Brett Arends recommends DIY VoiP

In his article “Skip Skype, Vonage: Get VoIP for Next to Nothing” Brett Arends describes how easy it is to setup VoIP on your own and wonders

"how any telephone companies, including voice over Internet providers, are going to make any money at all down the road."

In this case, he must mean by "voice over Internet provider" companies like Vonage because he uses a VoIP service provider account in the DIY setup too (a Gizmoproject/SIPphone account).

It should be noted that Brett's DIY setup is a bit of an apples and oranges comparison with a Vonage service, because Vonage (and all the other companies offering more or less the same thing) offer a full replacement for a landline, including services like forwarding, voicemail, and (in particular) 911. Also, if you are paying Vonage $25 a month, it's more likely that they will take your call if you need technical support, whereas most DIY service providers offer little or no support (ironically, almost none of them have telephone numbers that you can call).

The DIY setup described in the article WILL NOT provide 911 service (or 411, 511 etc.) That's something to be aware of. Depending on the provider, it may or may not include voicemail, but even it it does, it is unlikely to be as seamless or integrated as a Vonage service.

I also think the article overstates how "easy" it is. While the Voxilla configurator is a terrific tool, many (most?) mainstream users would be overwhelmed in trying to repeat the setup Mr. Arends describes. And if anything goes wrong, they will be up a creek.

I'm not suggesting that Vonage (or one of their competitors) is a better choice, I'm simply pointing out that, to be fair, it is not a apples to apples comparison.