In the "New Products" section last month, we featured a USB "NetPhone" from MicroGram Computers, which allows any computer with an internet connection to effectively become its own international telephone exchange.

Well, slight exaggeration perhaps: nevertheless, it does allow you to make (and receive, of course) "phone" calls to and from anywhere. We’ll look at how this works a little later. But this is an example of a technology that very few people, except those "in the know" are aware of. Yet!

It’s called VoIP – Voice over IP.

What is VoIP?

It is no more, nor no less, than its name suggests. Voice (predominantly telephone-type calls) sent over the internet (IP stands for Internet Protocol).

In a normal telephone call, made via what is known as the POTS, or plain old telephone system (also known as the PSTN, or public switched telephone network), your voice is converted (via a microphone) to an analog electronic waveform, routed via a variety of telephone exchanges to where you want it to go, then converted back to audio (via an earpiece) at the receiver end.

Well, at least that’s the way telephone systems used to work.

These days, especially for long distance calls, the chances are that it works that way until the telephone exchange, whereupon the analog signal is digitised and converted into "packets" of data, routed to where it has to go as a digital signal, then converted back to analog at the receiving exchange and finally, sent to the receiver as an analog signal.

"I knew it was over when I downloaded Skype. When the inventors of KaZaA are distributing for free a little progam that you can use to talk to anybody else for free - its over. The world will change now inevitably". Michael Powell, Chairman, US Federal Communications Commission

Recently-released figures suggest that Telstra is currently converting at least 20% to digital but this is likely to dramatically increase soon, if it hasn’t done so already.

What P2P VoIP does is exactly the same – except that it is done right at your computer and sent via your internet connection to anyone on the planet who has also has an internet connection.

Many references claim that you need a broadband or high-speed internet connection to make this work.

Trust us, you don’t. A plain old dial-up is good enough (as long as the speed stays up near 33.6kB/s). The downside is, of course, that you pay a local call fee every time you make an internet phone call. ADSL/Cable is "always on" so you can make that call effectively for nothing.

OK, you still have to pay the monthly ISP ADSL/Cable connection fee. But you’re going to do that anyway, so we reckon the "free" claim is perfectly valid.

How about WiFi?

There are some altruistic WiFi sites around which allow you free internet access (yes, there are a lot more which charge but many are free – at last count about 3700 in Australia with almost 900 of those in Sydney, according to www.sydneywireless.com.

Grab a notebook computer with WiFi, log in, plug in your headset or NetPhone and now you do have totally free international phone calls. We’ve all heard the stories about backpackers and students using the ’net to tell colleagues about "broken" public phones which allow free international calls.

No need any more: they can use the ’net itself to make those international calls without breaking any laws!