Voice over Internet Protect Is a Phone Call to the Future.

Byline: Jerri Stroud

Dec. 26--Time Warner offers digital phone. Vonage Holdings sells broadband voice. Other companies call their service voice over packet or IP telecommunications. But to what all are referring is voice over Internet protocol: telephone service transmitted over data networks.

"Everyone is making up new words because they decided that the best way not to sell something was to call it VoIP," said Judy Reed Smith, chief executive of ACM Group Inc., a technology research firm.

"It's been around for a very long time."

But it's becoming a mainstream service only now. Companies ranging from supermarkets to service stations, colleges to credit unions, have used IP technology to combine voice and data traffic on the same network. As a result, they've reduced the amount of wiring they need and have gained tremendous flexibility.

Companies like AT&T have been using IP technology to transmit telephone calls since the early 1990s. About that time, equipment makers such as Cisco Systems, Nortel Networks and 3Com introduced IP phone systems to replace traditional key systems or private branch exchanges.

As recently as three years ago, IP telephony was considered bleeding-edge technology. In those days, most voice calls transmitted over the Internet had a clipped or jittery tone that businesses rejected as unacceptable.

But that's changing. In the last…