I suspect that the below bit of information may explain why the phone companies are going after regulation of the Internet phone market. -Allen ----------------- Reuters New Media [...] _ Friday March 8 6:04 PM EST _ Firms to Offer Computer to Telephone System [...] NEW YORK (Reuter) - Two New Jersey companies said Friday they have developed technology that will allow voice conversations via the Internet between users of computers and ordinary telephones. The two companies, VocalTec Inc. of Northvale, and Dialogic Corp. of Parsippany, said they expect the system to be available in the next few months. The company said the computer-to-telephone connection, known as the Internet Phone Telephony Gateway, will allow computer users to place calls to normal local, long-distance or international telephone users. Internet-based phone communication presents a low-cost alternative to traditional telephone communications handled by local and long-distance carriers. It enables callers to combine the low cost of Internet connections, the convenience of initiating calls from either PCs or telephones, and the ability to communicate with anybody with a telephone via the public switched telephone network. However, the Internet poses technical problems such as variable voice quality and momentary speaking delays that preclude, at least for now, any widespread replacement of existing phone networks by Internet telephone communications. VocalTec chairman Elon Ganor said the software provides the conversational quality of a good cellular phone connection, but the quality may vary depending on the sophistication of the Internet access company providing the local connections. He said the Internet telephone gateway is expected to be available as a complete system in the second quarter of this year. [...] The product will be available to third party product developers to incorporate into their own products. Ganor said the products will be sold through Dialogic and Vocaltec's existing networks of resellers, system integrators and direct channels. VocalTec said the Internet Phone Telephony Gateway will enable new applications that use the Internet as a low-cost network for computer-to-telephone and phone-to-phone calls. Calls to wireline and cellular phones are possible. The system is comprised of a PC running Windows 95 and the VocalTec gateway software and a Dialogic computer telephone adapter card and linked to the telephone network and the Internet through a 28.8 kilobit or faster modem connection. The new software complements the company's existing Internet telephone software, which currently can only connect one personal computer user to another. ``The availability of the Internet as an open, global information network has generated considerable interest from our customers,'' said Bob Heymann, vice president of business development at Dialogic. ``The Internet Telephony Gateway will enable (resellers) and systems integrators to offer innovative applications such as international 'hop off' and Internet-based customer service,'' he said. Dialogic is a leading maker of add-on computer hardware circuit boards that enable computers to function as telephones. [...] VocalTec is headquartered in Herzliya, Israel and has U.S. offices in Northvale, N.J. It went public Feb. 7, 1996.