Ooma: the landline reborn

The landline’s days appear to be numbered. Ten percent of landlines are disconnected every year. Many people see no reason to pay for a landline when they are also paying for a cell phone. It’s an easy expense to get rid of, particularly in tough economic times.

Yet landlines do have certain advantages:

  • Cell phone coverage is still spotty in places
  • Cell phone voice quality also tends to be poor and, depending on your provider, you may suffer from abrupt disconnects
  • Cell phones require regular recharging, which renders them less useful
  • Traditionally, landlines were on a completely separate system. Your power might go off but because Ma Bell’s system worked on low voltage DC power you could at least call the power company to complain.
  • The landline had the virtue of being extremely reliable. In those days before Ma Bell was broken up, you may have paid too much for a phone but service problems were virtually nonexistent.
  • Phones manufactured by Ma Bell were almost indestructible. They lasted forever.
  • The freedom to be anywhere in your house and not carry a cell phone
  • One consistent household phone number. We have had the same phone number since 1993.
  • No per minute charges for local calls

What I call “land landlines” are getting hard to find. These are old twisted pair phone lines that come from an actual telephone wire from your local Bell spinoff into your house. Broadband Internet has transformed landlines. If you get your Internet from a Bell spinoff like Verizon, your landline is just a feature of your FiOS service. It occupies some tiny part of the spectrum on your fiber optic channel.

When we signed up for high speed Internet from Cox Communications, our cable provider, back in 1999, we were something of Internet pioneers. For the first few years, high speed Internet suffered from severe quality of service problems. We once spent a whole week without Internet until their overloaded staff finally got around to fixing our service. It took us years before we became confident enough to bundle our landline into our cable service. When we canceled our service with Verizon, our landline essentially morphed into a proprietary VOIP (voice over internet protocol) phone controlled by Cox. The only real difference was it was less reliable than our old service. Our cable modem has a battery backup but as we discovered, if your broadband is down your landline is also down. Which meant that you needed a cell phone as backup telephone service.

We weren’t really paying anything less for our landline with Cox than we were with Verizon. The only real savings came from $10 or so that we saved by bundling TV, Internet and phone into one service. We rarely dial long distance, but long distance was always extra. Cox’s long distance rates were a bit excessive, as much as 15 cents a minute without a package. With minimal long distance, adding in communications taxes we still paid between $25 and $35 a month for our landline.

The price grated on me. While I usually have my cell phone tethered to my belt, it’s not always there. Moreover, since I use Virgin Mobile, signal strength was somewhat problematical. Still, I had been scouring the market for years for a cheaper alternative. Skype is great, if you have ever tried it. Internet-to-Internet phone calls were free, but were really you with a headset on. Skype’s video feature is awesome; I have used it to chat with siblings and old friends in real-time. However, to reach someone with Skype on a landline or cell phone you had to buy minutes. In addition, lacking a Skype appliance, to get and receive calls you had to leave your computer on as well. This meant when someone called you on Skype, you have to dash to your computer and don your headset. MagicJack looked like an ideal solution, but it was not very reliable.

To work, the ideal landline VOIP solution needed the following attributes:

  • High reliability, just like the old Ma Bell network if possible
  • Be able connect to my existing twisted pair phone system
  • Offer good or great call quality
  • Be dirt cheap, with few or no local or long distance charges
  • Work as an appliance, so I did not need my computer to be on

Since I got broadband, I did not understand why I should have to pay anything for long distance, since I don’t pay extra to get data from servers in Alaska compared to Herndon, Virginia where I live. So when Consumer Reports recommended Ooma as a good VOIP solution, it was only a few days before I shelled out $249.99 to purchase the device. Within a week it arrived on my doorstep.

Ooma met all my criteria. Consumer Reports said it was very reliable. It would work with my existing twisted pair phone network so I could just plug it in to a telephone jack. Voice quality was at least as good as a regular telephone, but could be improved if HD phones were used. Perhaps most importantly for a cheapskate like me, all long distance and local phone calls were essentially free. No monthly service fees, forever! No extra charges for long distance, at least within the United States. Ooma goes the last mile by working with local telephone exchanges. It can reach all landlines and cell phones. International calls were extra, but were dirt cheap (about a penny per minute). Since I don’t call internationally, it’s not an issue, but if it were I’d be unlikely to get a better rate.

Essentially, after buying the Ooma appliance, I had free local and long distance. The only recurring fee was for communications taxes, in my case $3.50 a month. So that’s $3.50 a month compared with $25 to $35 a month I am spending now was quite a bargain. Ooma’s purchase price would pay for itself in about a year and afterwards the saving would just keep piling up. (However, there may be termination fees if you cancel your landline, and if you bundle service you’re your Internet provider, that savings may go away as well.) Moreover, I did not need to leave my computer on. Instead, I use the Ooma Telo, an Internet appliance that usually sits between your broadband modem and your Internet router.  Its voice compression algorithms allow it low bandwidth utilization while maintaining high reliability and excellent voice quality.

Ooma must still pay fees to telephone companies to connect your call to a local exchange. How do they stay in business if they don’t charge you a fee? There probably is some profit from selling you their Ooma device, and I am sure that helps. Second, the phone can only be used for residential use, not business use, which means you do not tax its network that much. Third, they sell extras. They like to push their premier plan for $9.99 a month, which offers features like call blocking and call forwarding. (It comes bundled free for the first two months.) And they must make a bit of money from number porting. I also spent $39.99 to port my phone number to Ooma.

In truth, my actual cost is more than $249.99 plus the $39.99 to port my number. It turned out that our cable modem and router are located in our loft, where we don’t have a telephone jack and it would be inconvenient to move our computers elsewhere. Unless all your phones are wireless, a telephone jack is needed, which ours are not. The Ooma Telo requires a wired connection to your high speed Internet. For me the cheapest solution was to install a telephone jack in our loft. This meant fishing telephone cable, something I could have done myself but found it easier and faster to hire someone to do it. Once more, I used the power of Craigslist to find someone to do the work. I paid $85, including $5 for the cable the installer provided. So my total investment is about $375, which means it will take me about a year to recoup my investment.

My number port happens tomorrow, but we have already tested our Ooma with a temporary phone number. After a few small installation hiccups it is working reliably. (We did notice a little voice echoing and initially some clicking on the line.) $35 landline phone bills and paying for long distance will soon become a memory. What will not, at least for now, will be the convenience of a landline, which Ooma has smartly reincarnated for the 21st century. Ooma has arguably transformed the landline and this customer is happy to pocket the savings.

My next task is to lower the cost of my Internet and cable. Let’s see how low Cox and Verizon are willing to go for my business. I am confident there are more savings to be had there as well.

A bundle of confusion

If you own a horse, you have to let it run regularly. If you own a sports car, you should take it on a racetrack occasionally for the pleasure of being smashed into your seat while you accelerate. Similarly, if you have a high definition television (HDTV), you do not buy it to watch interlaced analog TV signals with only 473 lines of resolution. You want content that will make you appreciate the fact you just spent $699 on a high definition TV.

That is how much we paid for our HDTV. It is an Olevia 37 inch HDTV that comes with more ports and options than we will ever use. Our TV room is small but despite its relatively modest screen size, it still seems enormous to us. The TV it is replacing worked perfectly fine. It is now sitting in our basement queued for a likely donation. While only about seven years old, it was doomed soon after it was bought. The FCC declared that on February 19, 2009 TVs like ours will be obsolete unless we buy a conversion box. Even if we did our picture quality would not have been improved. Neighbors would laugh at us for being so 20th century.

Both our cable provider (Cox Communications) and our phone company (Verizon) have spent years tempting us with their all-digital services. We have our Internet and cable TV service with Cox and an old-fashioned POTS line with Verizon. On a typical month, I pay Cox $93 and Verizon $32. Both Cox and Verizon have been luring us with bundled services. If we bundled all our communications needs with them, we were told, we could save some money.

Verizon has its fiber optic FiOS service. In addition to providing high-speed Internet access, you can also receive a lot of other content, including their version of movies on demand. Cox offers essentially these same services for roughly the same price. How do I know? Well, it is hard to tell. Masters of voodoo marketing are putting together their sales brochures. They excel in obfuscation. Yet they refuse to leave me alone. Roughly once a week I get a solicitation from each company. Typically, they come in the mail, but now and then, they also come attached to my door handle. Verizon has lately been very uppity, sending salespersons to my door to pitch their FiOS service. That was one strike against them; I hate door-to-door salespersons and by implication any company that would send me one. Moreover, I have an unlisted phone number. You would think Verizon would take this as a signal not to call me. You would be wrong. They have given me several calls pitching FiOS. Cox at least has neither knocked on my door nor solicited me over the telephone.

Now that we are HDTV owners it was time to consider their various offerings. As we soon discovered, analog TV on a HDTV looks ridiculous. Either much of the screen is black or if your TV is fancy like ours is, you can put it in a zoom mode. The screen fills up, but suddenly the picture looks fuzzy.

Both Verizon and Cox had mid-tier bundled service packages for $99.99 a month that combined telephone, digital TV and Internet service. At $99.99 a month, either looked like a good deal. Either deal appeared to be about $25 less than we were currently paying. The question became which one to choose? Which was better?

Naturally, both providers claimed they had a superior network, superior content and lower prices. Both though delight in obfuscating the consumer’s real costs. It is almost impossible to determine what you are actually buying and how much the service will cost you. I spent a couple hours on Verizon’s site trying to pick through the details of their bundles. Eventually I gave up. There is probably no way to know for sure without hiring a lawyer to decipher the fine print. Verizon though did have three strikes against them. First, they annoyed me by having salespersons knock on my door and call me unsolicited on the phone. Second, was their stance on network neutrality. Third and probably most importantly, like with their cell phone service if you select one of their bundles they want to lock you in for a couple years. I mean for such a steal as they are giving you they have to make up the difference somehow! I am old fashioned enough to think that if their service is that great it will be obvious to me, so I should not have to be locked into it.

Cox Communications had a few strikes against them too. About a year ago, I inquired about one of their bundles. I asked many questions and I did not like what I heard. I politely said no thanks, not at this time. A few days later one of their digital receivers arrived on my doorstep. That raised my dander. A phone call confirmed that I had not subscribed to their bundle. However, I still had to take an hour out of my life to return the box they sent me. They would not pick it up.

Nevertheless, between their latest brochure, reading their web site and a long conversation on the phone with their sales office, I was able to get a sense of what my bundle would actually cost me. Still, the devil is in the details. Did their $99.99 a month bundle include the rental cost of their digital receiver? Negatory. That was $4.50 a month, so the bundle was really $104.49. Did it include any HD channels? No except for the local HD broadcast signals. However, they did offer 31 HD channels. If I wanted them on top of our digital cable, they were $1.44 a month. What is this free digital tier that comes with the bundle? Apparently, the ones listed in the brochure were incorrect, but I could get the equivalent of their Variety Tier. This is what my wife wanted because she wants to see the latest Torchwood episodes on BBC America. Would there be an installation charge? Not if I install the digital receiver myself. They have to come out to the house to install the telephone interface, but there is no charge for that. Can I get extended local long distance like I have with Verizon? In other words, can I call my father who lives across the Potomac River toll free? No, but you can call the District of Columbia for free. Oh, and to get the bundle you have to choose Cox as your local long distance, long distance and international provider. Long distance rates are fifteen cents a minute, or more than three times what I pay Pioneer Telephone, my current long distance provider. However, this is not much of an issue since we hardly ever call long distance. We do email instead. Moreover, to maintain my unpublished telephone number I have to cough up another $1.71 a month. All totaled with taxes my $99.99 a month bundle would cost me $123.09. Hey, but at least I will only have to cut one check.

In short, I may save a few bucks a month but I will not be supplementing my retirement income with their fabulous bundled savings. On the plus side, we will no longer be stuck with analog TV signals. Digital signals will no longer be interlaced. The picture on these channels will not make them much bigger, but will make the picture smoother. Their 31 HD channels are expected to double soon and there will be no extra fee. We will get channels we do not get now, but that does not mean we are likely to watch them. In addition, as best I can tell I am not locked into a two-year contract.

In fact, the differences between Cox and Verizon are rather marginal, but I chose to go with Cox for these reasons. I may end up regretting my choice. Their eight-hour battery will keep my landline working during a power outage, but what if the outage lasts nine hours? While many of our TV channels will soon be in HD, I am still not sure I will watch any more TV. I largely gave up TV years ago. On the other hand, our daughter will be pleased.

Our next purchase will probably be a Bluetooth compatible DVD player. Apparently, regular DVDs are not good enough for a modern HDTV, which means that we will want to buy some of our favorite DVDs again so we can have a more proper theatrical experience.

Well, someone has to pull this country out of recession.