Vonage is a local and long-distance service provider that runs its voice network entirely over the Internet.

Vonage offers "all you can eat" long-distance for flat rates. For the enterprise user, there is a $40-per-month plan with 1,500 minutes and a $70-per-month plan for unlimited usage. With fixed-rate pricing plans, the need to redistribute call details to enterprise cost centers is likely eliminated - a shift in how most enterprises do business today.

A couple of things set Vonage apart from other VoIP service providers. First, it handles both incoming and outgoing calls. You get a "real" phone number, and in some cases you can even use your existing phone number (a.k.a. number portability). Second, you get free voice mail with the service. And third, Vonage is using a Session Initiated Protocol (SIP) infrastructure, which decreases the company's lead time for developing more advanced calling features.

Like other service providers, Vonage offers the standard set of call management features like call waiting and call forwarding. The company also offers call management screens that provide a view of your profile and call detail records. Vonage bundles the premises equipment needed for self-installation so you can use your existing analog phones and Internet connection. The service is available in 50 cities and 115 area codes.

The bad news is that, like other voice-over-the-Internet backbones, it doesn't have the capability to identify caller location to E-911 agencies, nor does it provide operator services. So we don't recommend you completely disconnect your local POTS service provider unless you have no need of these services.

Steve Taylor is president of Distributed Networking Associates and publisher/editor-in-chief of Webtorials. Larry Hettick is a principal analyst at Current Analysis.