Slash Your Phone Costs

Keep the Landline?

Here's a big question: If you have cell phones, do you need a landline? A lot of people don't bother with them.

And yet my family has two landline phones. We keep the home phone because my wife doesn't want to give it up, and she's reluctant to make our friends learn a new phone number. And I need my home-office phone so that I can keep my work and home lives separate. I give my office number to all sorts of people with whom I wouldn't want to share my home or cell numbers.

Despite what some folks think, you don't need a landline for 911 calls. Cell phones work just fine in an emergency. And if the electricity goes out, they're actually better than most of today's landline phones, which require AC power.

It's true that a landline gives you unlimited local, incoming, and toll-free calls, and lower per-minute charges in many situations. And another consideration is DSL, which comes over the phone line. If that's your source for Internet access, you'll have to switch either to cable or to a so-called naked DSL account that doesn't involve analog phone service. Either way costs more. AT&T would charge me $10 a month more for the DSL package I have now if our house were stripped of phone service.

So if you intend to keep your landline, how do you lower costs?

Examine your bill--both local and long distance--for extra, optional charges. If you're unsure what a charge means, don't hesitate to call the phone company and ask.

I found a few things on our bills that must have seemed like good ideas once, but not anymore. On our local bills, we're charged $7 a month for something called WirePro, which is insurance to cover home wiring problems. As with an extended warranty on a new TV, not having it is something of a gamble, but the money saved is worth the risk.

On the long-distance bill, we were paying $9 a month to lower our national and international by-the-minute fees. But even with the higher fees, we weren't making long-distance calls totaling $9 a month.

So that's another $16 saved--as long as our wires hold out and we don't go overboard on long-distance phone calls.

Into the VoIP

Luckily, we have another option for long-distance calls, and it's dirt-cheap, with nearly unlimited minutes: Voice Over Internet Protocol (VoIP).

Once too hard to listen to, VoIP now offers improved quality, and it makes a great alternative to landlines or supplement to cell phones. And you're not limited to talking with other VoIP users.

Not that it's a complete win-win option. While the audio is improved, it still sounds worse than that of a landline. And it requires that you either keep a computer on to make and receive phone calls or use special hardware.

Nevertheless, VoIP seemed like a good alternative to my landline office phone. I looked at two very different services.

You probably think of Skype as a free service for talking and instant messaging with other Skype users, possibly with video. That's all the free service does, but for a price Skype will connect you to telephones all over the world, and it'll give you a phone number so that other people can call you.

If you don't phone internationally a lot, Skype's most attractive phone system offer gives you unlimited calls within the United States and Canada for $3 a month, or $30 a year. Well, sort of--it isn't really unlimited. You get 10,000 minutes per month, which could be a problem if you're on the phone more than 6 hours a day. And it isn't really $30 a year--at least, if you really want to replace a landline. A real phone number costs an additional $30 a year, and voicemail costs $20. Even so, that works out to a monthly average of less than $7--still a tempting rate.

But there are bigger problems. For one thing, Skype offers no 911 emergency support, though that shouldn't be a problem if you have a cell phone. The second thing is, you can't simply plug a regular phone into Skype. You can install Skype's free software onto on your PC and plug in a microphone (or, better yet, a headset); of course, you'll have to keep your PC on all the time so that you can receive calls. Or you can buy a stand-alone Skype phone that connects either to your computer (which means you still have to leave it on) or to the Internet directly.

I tried two different Logitech USB headsets, one wired, the other wireless. Both worked. I also tried Belkin's cell-like Wi-Fi phone, which, as I write this, is on sale at Skype's site for $130. I liked it despite some strange quirks (leave it on as you take a walk, and it makes odd sounds as it finds and loses signals), but it doesn't work with hotspots that require Web authentication, such as at Starbucks and Tully's.

Also, Skype's technical support is all but nonexistent. You get no phone or chat support, and e-mailed queries aren't answered quickly, either--if you receive an answer at all.

The biggest Skype problem, if you want to use it as a landline replacement, is the selection of phone numbers. You can't transfer your existing number, and you may not be able to get a new number in your area code. But if you can't, keep trying; on my second try, they had some available.

Phone Power, another VoIP provider, offers a more landline-like experience. You can use your regular phone and transfer your existing phone number. But it's nowhere near as cheap as Skype is, and I found setting it up quite a challenge.

When you sign up, Phone Power sends you a gadget that you daisy-chain between your modem and your router (you can also plug it directly into the router if the preferred setup doesn't work). Then you plug your phone into the gadget and use the phone as you normally would. It includes voicemail (which you can have forwarded to your e-mail address--a nice touch), and 911.

The best plan (3000 outgoing minutes, unlimited incoming) costs $23 a month after the discounted first three months. That's considerably more than Skype, but still less than a regular phone bill with voicemail and long-distance fees.

During my setup of Phone Power, I would have given up if it weren't for the company's excellent tech-support staff. I talked to several support representatives as we struggled to get both the phone signal and my Internet connection working. They all proved polite and knowledgeable, and were truly concerned with helping me fix my problems.

Nevertheless, I'm going with Skype for my office phone, despite the phone number problem and lack of support. Not only is it cheaper, but having my office phone travel with my computer suits my work habits.

So with all those changes, how much have I cut our phone bills? Halving the number of cell phone minutes saves us $20 a month. Dropping the landline extras is another $16. Switching to Skype would save me about $33. In the end, that's close to $70 a month, or over $800 a year. Not bad when you're trying to save money in this unpredictable economy.

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