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ooma hub

At a Glance
Product ooma
Summary Internet telephony service based on peer-to-peer networking and distributed termination
Pros • Simple Setup
• Instant second line
• Broadband answering machine
• No monthly bill or contract
• Stand alone or landline versions available
Cons • High initial "up-front" cost for Hub
• New company with no track record
• Lacks call logging features found on traditional VoIP services

It seems like barely a day passes where I don’t receive a solicitation from someone who wants to sell me inexpensive, Internet-based phone services. Whether it’s the saturation level of TV ads for Optimum Online’s triple play, the regular calls I get from Comcast telemarketers, TV ads for Vonage, or letters from Verizon imploring me to "come back," I certainly have a plethora of choices for flat rate, "all you can call" plans. 

With the exception of Verizon, each of these services depends on using your Internet or cable connection to connect your call to a back-end service provider such as Level 3 or Global Crossing who ultimately "terminates" your call to the number you dialed. Each of these services also shares something else in common—a monthly bill that ranges from about $20–$40/month.

Having covered the VoIP market for some time, my interest was piqued by a new Internet telephone service offered by ooma ( For a one-time purchase price of $399 (introductory price reduced from the $599 MSRP), the company guarantees that you won’t pay a monthly charge for long distance charges anywhere in the US for at least three years. The "legalese" from their web site reads as follows:

Your one-time purchase of the ooma Hub device means you won’t owe monthly charges to ooma for unlimited calling in the US using the ooma system for at least three years.

ooma’s web site markets the product as "owning your own dial tone." In addition to unlimited local, regional, and long distance calls, ooma’s offering includes a "free" second line (after you purchase the required hardware) as well as a broadband answering machine.

How It Works

The underlying architecture of ooma’s product and network is based on a completely different approach to Internet telephony than the model used by the current crop of VoIP providers. This ingeniously-designed architecture takes advantage of peer-to-peer networking technology and what ooma calls "distributed termination" to avoid termination charges by traditional back-end service providers. ooma offers two different configurations:  Landline and Standalone. Since the landline version is the crucial element of ooma’s peer-to-peer network, I’ll focus on that first.

If you select the landline version of ooma’s service, you’re signing up to be part of their peer-to-peer network. One of the key ingredients behind ooma’s design is that virtually every landline-based phone service has a local calling area where you can place calls for free. Here’s how it works:

When you first sign up for the landline ooma service, ooma will contact your local phone company and re-provision your local phone service. The re-provisioning removes call waiting, voice mail and three way calling. With ooma, those services are provided for free, so you’ll actually be saving money by dropping those features that many phone companies charge as premium features. The re-provisioning also adds call-forward-on-busy—a service that’s necessary to enable ooma’s second line feature. 

What’s important here is that you are keeping your existing phone number and you are maintaining your relationship with your local phone company. Unlike traditional VoIP providers who offer phone number portability and transfer your phone number from your phone company to their service, your local phone company maintains control of your phone number. 

This wasn’t particularly clear to me when I originally attempted to sign up for their service, but ultimately representatives from ooma explained how it works. For those skeptical of Internet phone providers, this is a plus. As many readers will attest, when SunRocket folded in the middle of the night, their service went down and wresting back control of their phone numbers took some effort for the disenfranchised customers. 

When you dial a number, ooma first checks to see if the call is a local call. If so, your call is routed through your traditional phone line. If the call is not a local call, the call is routed through the ooma peer-to-peer network. ooma determines if there is an available landline provisioned ooma Hub within local calling distance of the number you are calling. If so, your call is routed to that ooma Hub, and the call is made using the landline attached to that Hub. 

So, for example, if I wanted to call my brother in California, ooma would look for an available Hub within his local calling area. My call would be routed over the Internet to that hub, and the local landline in his local calling area would terminate the call. This is what ooma means by "distributed termination." If there aren’t any available ooma Hubs to service a call, ooma passes the call off to one of the traditional back-end VoIP provider for termination and absorbs the cost. 

Note that ooma blocks caller ID by default (but can be enabled if you like), so the call would show as "unavailable," or whatever nomenclature is used by your Caller ID device. In this example, my brother wouldn’t see either my number or the number of the line that completed the call. There wouldn’t be an impact on the subscriber whose phone line was being used to terminate my call. He or she would merely pick up the phone, hear the musical ooma dial tone, and call as normal. 

The landline configuration clearly helps ooma build out its peer-to-peer network, but there are advantages for the consumer as well. First, as explained above, you’re not giving up control of your phone number. Second, in the case of a power or Internet outage, the ooma hub reverts back to your traditional phone service. Instead of ooma’s musical dial tone, you’ll hear the traditional phone company’s dial tone indicating that all calls are being routed through the phone company and that long distance charges will apply. Finally, 911 calls are routed through your local phone company, not through an e-911 service.

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