MagicJack

In my quest to reduce our reliance and the cost of our landline telephone service, I ran into a device called MagicJack. It's essentially a Voice over Internet Protocol (VoIP) device that plugs straight into the PC via a USB port and connects to a regular telephone. I've been testing this device for a week now and so far I am very impressed. The service also provides a free telephone number. Here is my analysis:

Pros:

• Free local and long distance calling to anywhere in the USA and Canada
• Free calls to the USA/Canada from international locations (they will soon release rates for international calling)
• Free voicemail, call waiting, three way calling
• Extremely portable - take the MagicJack with you anywhere there is a high-speed connection and a PC and you have your own telephone number where you can make and receive calls for free

Cons:

• Device must be plugged in to a PC that is turned on (cannot plug directly into a router)
• When the Internet and power are down, no telephone service

Installation took about three minutes after plugging in the unit (the device installs a "softphone" on the PC for dialing), and after that, the device registers your location for Enhanced 911. Once that is complete, it's all set to go. I received a 702 area code (Las Vegas) but they will be providing local numbers on September 1. Anyway, I am using my local GrandCentral number to forward the calls to the MagicJack so it's a non-issue for me.

Incoming and outgoing calls are crystal clear and there were no static or hiccups. Of course, if you're downloading a large file there might be an issue but I haven't run into this yet. Also, it works under both Windows XP and Vista. MagicJack costs $20 for the device plus $20 for the annual service, so it's $40 per year for the first year, and $20 a year after that. I'm currently paying AT&T an average of $40 per month for landline that we hardly ever use so this device will save me $35 per month if I decide to get rid of the landline (although I'm considering downgrading the landline to basic service for faxing and 911 service).

If this business model sustains itself, then I think that this has great potential.