Flat-rate headache: the truth behind Internet phone plans

Tempted by those new $19.95 Internet phone plans? Don't be.

You may have read about Internet phones that let you make unlimited phone calls for one low price. The hype is true: you can get unlimited long-distance calling in Canada or the U.S. for as little as $19.95 a month. Plus the new technology, called Voice over Internet Protocol, or VoIP for short, offers extras, like the ability to borrow area codes from other cities for your home line.

But as always, there’s a catch. Several, actually. Whether it’s Vonage Canada, the Primus TalkBroadband service or Sprint Canada’s Internet Phone Service, you can’t sign up until you have high-speed Internet access, which costs about $40 a month, and you can’t sign up for the $19.95 unlimited plan unless you’ve already forked over $19.95 for basic service.

Telecommunications analyst Roberta Fox says you shouldn’t consider switching to VoIP unless you pay more than $50 in long distance a month. And you should understand some other concerns as well. For starters, the converters only come with one phone jack, so you can kiss your extensions goodbye, unless you want to rewire your whole house.

Even more worrisome, VoIP is not nearly as reliable as the standard phone system. Every time your Internet connection acts up, you’ll not only lose access to the Net, but your phone will go dead too. What if you need to call 911?

Fox, who rates these services for a living, says that reliability should be much improved in six months. Other problems will no doubt be addressed as well. But for now, she’s sticking with her plain old phone line.