How to be Cheap: Ooma for free home phone service

(Updated July 20, 2011)

I had 2 big problems: 1) cell phone reception in my house is poor (both Sprint and AT&T), and 2) I hated looking at that big $42 monthly bill from AT&T for my landline phone service.  Even if cell phone reception in the house was good, I think I would still prefer to have a landline for better voice quality, reliability, and plus a part of me still thinks that there is some truth to those reports that cell phones can cause brain tumors (though that's a topic for discussion another day).

I had thought about switching to AT&T's lowest end local only service, but when you add in long distance from a separate carrier, and my requirement to keep caller ID and call waiting, it wasn't saving me that much over the All Distance plan.  My requirements for phone service were:

• Voice quality must be pretty much indistinguishable from a land line (and my wife would be the judge on this)
• Solid reliability, no dropped calls or issues with people who can't call me
• Ability to port my existing land line number
• Cost savings over my current AT&T plan had to be significant
• Must support local 911 service (this is something that cell phones and Skype cannot do)
• Does not require me to buy a bunch of proprietary phones, ideally integrates with my existing phones (I have one of those expandable phone systems where you plug the landline into one master phone, and then you can have a bunch of extra phones around the phone that wirelessly work through the master phone)

This pretty much points to a VOIP service like Vonage.  A few years ago, I tried one called Phone Power due to reading positive reviews on dslreports.com.  It failed the voice quality test, so I ported my number back to AT&T.  I was on the edge about going with Skype and forgoing the 911 service, but it would not allow me to easily have multiple phones around my house.  I was thinking about going with Ooma as it seemed to have fairly good reviews, and one friend of mine had it and said it works well, but was still too concerned that any VOIP system could meet my expectations.

Then in January 2010, I went to CES and saw the Ooma booth. I spent a while there talking to their VP of Engineering.  First, I was surprised that they are based in Palo Alto, CA and they really do all the development there, and not some guys just trying to resell a Chinese gadget.  I spoke at length with the guy asking him how much bandwidth they use, how they handle Quality of Service (QOS), what kind of compression codec, etc.  I was pretty satisfied that they knew their stuff, and that one did not require a crazy fast broadband pipe to have high quality voice.  Even their sales people suggested I simply return it if I didn't think it was great, and told me to buy it from Amazon or Costco because they would take it back without questions.  Even better, I would buy it, try it with a randomly assigned phone number, then port my home number only after I was satisfied with the quality.  A no lose situation, right?

After giving it a try with my AT&T DSL service, I was quite satisfied and so was my wife.  Since having in in January 2010, I've never had anyone on the other end make comments about voice quality or suspect that I was using something less than a standard land line.  It even has some cool features like allowing you automatically block calls from known telemarketing numbers (they aggregate a list of telemarketers).  Overall, it seemed to work well and I happily punted the traditional land line.

July 20, 1011 update: Starting a few months ago, I started to have some problems.  Namely, I notice a significant lag or latency in how long it takes for Ooma to transmit my voice, so I sometimes have conversations where the other caller and I will speak on top of each other.  Ooma's customer service has not been successful in resolving this.  Secondly, very occasionally the caller's voice will suddenly drop out or the voice becomes choppy and impossible to understand.  I have yet to figure out what is causing this, such as my router settings, or Comcast deliberating screwing with my VOIP packets.  This might be something unique to my router setting, so if you get Ooma, make sure you buy from a retailer with a generous return policy. The investigation continues...

How much does it cost?  You basically pay a one time up front fee for the hardware (it's currently $199 on Amazon, but you can sometimes find a refurbished Ooma Hub for $99), and depending on where you live, you may have small monthly regulatory taxes that Ooma is required to charge you  ($3.50 a month for Northern California, or use their Tax Calculator to see how much for your specific area). Aall calls in the US are free, unless you opt for their premium service ( $9.99 per month) which I think very few people would need.  So for me, it paid for itself after 5 months.

Which Ooma should you get? There are basically 2 models: the newer black Telo, and the older model called the Hub. I asked the Ooma guys at CES, and they told me that they are pretty much identical from a quality and performance perspective.  The Telo is the one that they are focusing on doing new software upgrades for, and it supports stuff like using a Blutooth device for making Google Voice calls (nifty, but useless for me personally).  The older Hub system supports a remote box called the Scout which allows you to create a second phone jack anywhere in your house.  Personally, I say get whatever is cheaper unless you plan to make use of a Blutooth device or Google Voice. I actually bought the Telo first for my main phone line, then bought a $99 refurbished Hub as second line for the time when I'm working at home.  If you think you need the Scout, I think you'd be better off buying one of those expandable phone system like the Panasonic ones which do this job for you more elegantly.

Nerd details: if you're not technically inclined, make sure that you put your Ooma behind your DSL/cable modem, but in front of your router to ensure that you get good voice quality.  Ooma can use up to 130 kbps of bandwidth for best voice quality, but is supposed to automatically use less (by a higher compression and lower sampling rate) if it runs into problems with not having enough bandwidth.  The cheapest DSL plan from AT&T  has 384 kbps theoretical max, but is more like 300 kbps actual. You could run into bandwidth problems if you're uploading photos or other data on the web.  Ooma's solution is that their box has a built in Quality of Service (QOS) engine that will give bandwidth priority to voice calls.  You can even log into their box and modify their QOS settings, though the default values should be fine.  This means that if you're on the phone, then the max upload speed for someone who's trying to surf the web while the phone is in use could be reduced to around 170 kbps. How does one enjoy this QOS feature?  Simple: you put the Ooma box right behind your DSL/cable modem, then put your router after the Ooma box.  If you have a relatively high end router with QOS control, you can do this yourself via the router.  Will anyone notice when Ooma's QOS reduces their bandwidth?  Only if they're doing some heavy uploading like sending a huge photo onto flickr, it will be slower.  Although if this is something you care about, then you should be upgrading to a faster broadband service anyway.  But someone who is doing regular web surfing shouldn't notice anything different.