VoIP telephony has represented the biggest change in the telecommunications industry since the introduction of fiber optics. One unintended consequence of the switch to digital networks by the major telecommunications companies was the ability of smaller companies to piggyback on those networks. Small companies could now route digital calls directly to the telcos' digital networks, skipping analog telephone lines altogether.

Using this strategy, VoIP companies could provide digital calling from one VoIP user to another VoIP user at no charge--even for long distance calls. Long distance calls from a VoIP user to a non-VoIP user could also be provided at local rates. For international calls, charges were still incurred, but at far lower rates than those offered by the major telcos.

To take advantage of VoIP telephony, a consumer needs only an internet connection and a means of converting his or her voice to digital information packets. This conversion is accomplished with either a VoIP telephone, an analog telephone adapter (ATA), or a VoIP card installed on the user's computer. To deploy VoIP across a home or business network, a router or gateway is also needed.

VoIP telephony has only a couple of drawbacks. Because of the decentralized nature of internet communications, 911 calls are rarely routed correctly. Many major VoIP providers have addressed this issue internally by routing emergency calls through their own networks to the appropriate emergency response centers. VoIP telephones also rely on the power grid rather than deriving power directly from telephone lines, so an uninterruptible power supply is needed to maintain VoIP telephone service during blackouts.