The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Sunday, March 26, 1995                 TAG: 9503250319
SECTION: BUSINESS                 PAGE: D1   EDITION: FINAL 
SOURCE: BY LON WAGNER, STAFF WRITER 
                                             LENGTH: Medium:   90 lines

NEW SOFTWARE LETS USERS TALK FOR CHEAP

There are two means of explaining phone calls over the Internet: the technical way and the wallet way.

The technical explanation is that new software can translate a person's voice into binary data bits that zoom over the Internet's worldwide network of computers. The data bits are converted back to sound on the receiving end, and a voice comes out of a computer speaker.

Didn't get that? OK. In other words, you can now make long-distance calls, even international ones, for free - or at least very inexpensively.

This latest step of the communications age has come within the last six weeks. Vocaltec, an Israeli company, released Internet Phone for IBM-compatible computers in mid-February. At the same time, Electric Magic Co. of San Francisco unveiled NetPhone for Macintosh users.

The next step will likely allow users to talk over the Internet while watching a slow-moving video of the person on the other end. Cornell University researchers are developing a video conferencing product called CU-See Me.

The impact of these inventions on multibillion-dollar long-distance providers Sprint, AT&T and MCI is not yet clear. One thing's for sure, though - the telephone companies are watching closely.

``I would think the long-distance companies would be shaking in their boots,'' said Ann Harney, president of the Hampton Roads Internet Association, who has Internet Phone on her home computer. ``Then again, I wouldn't be calling Israel just for fun, so they're really not losing out on any business.''

Rather than missing out on the business, MCI is monitoring the progress of these new pieces of software and probably will jump in when the kinks are worked out, spokesman Steve Fox said.

``We think there's a long way to go before the Internet can sustain the amount of traffic that's going on on the voice network today,'' Fox said. ``We are looking at it as something worthy of considering long-term.''

Denise Myers, one of the inventors of NetPhone, conceded that voice transmissions across the Internet lose quality when the network is busy. But her partner in the three-person software company pointed to the main advantage:

``NetPhone is good because it lets you make international calls at the local rate'' and there is nobody asking for a toll, said Andrew Green, a British citizen.

The only charge for a long-distance call using this new software is the monthly fee for an Internet account, about $20 to $30 for 50 or 60 hours in most cases. The Internet Phone software for PCs is selling at an introductory $49 until the end of this month, when it will double. NetPhone sells for $85 for two copies.

But there are drawbacks. Sound quality at its best is similar to that of a speakerphone; at its worst, there's a lot of crackling noise. Also, a person can only call someone else if both people are signed onto their computers at the time of the call.

And the technology is called half-duplex, which means one person has to talk, transmit the sound, then clear the line for the other person to talk back. It works like a CB radio or walkie-talkie.

Stephen Angell, a reporter from London who wrote an article for Harney's computer newsletter, summed up Internet Phone - known on the Internet as IPhone - in an electronic-mail message.

``At the moment, IPhone has taken off in the hobbyist arena,'' Angell said. ``So, as with Ham Radio, most calls will be of the `Wow, this is really cool, talking to folks miles away for the cost of my Internet connection' sort.

``Main pros . . . cheap cost, hip technology,'' wrote Angell, in the choppy manner of much e-mail communication. ``Main cons. . . not like telephone. You have to be logged in to be called, or to call, sometimes not as good quality as the telephone.''

Harney demonstrated the pros of Internet Phone a few days ago. From her apartment in Norfolk, she rang Park View Junior High School in Cranston, R.I.

``I grew up in Cranston, Rhode Island, that's why I picked this,'' she said while making the connection. ``I probably blew their minds. I just had a great talk with Rome.''

Rob Labanca answered the ring while showing his ninth-grade class the capabilities of the Internet. The next step at Park View Junior High is to apply students' use of the Internet to help them learn about the world, he said.

``We were talking earlier with Malaysia,'' Labanca said. ``The kids were very interested in learning about another culture.''

Thursday morning, as Harney was getting calls through her computer from Montgomery County, Md., France, Israel, Rome and anywhere else, she admitted that even heavy Internet users are sometimes amazed at how fast new technologies are being created.

``This has all happened in the last six months,'' she said of the voice and video conferencing tools. ``It's just crazy.'' by CNB