News

• The Good: Easy plug-and-play installation; works well for PC and Mac and with cordless or line phones; price is definitely among the cheapest out there
• The Bad: Local number portability still isn't offered; a second unit may be necessary for travelling, depending on your setup; no call forwarding as of yet; not ideal to replace multiple phones in a household; computer has to be on for you to take calls, or else they go straight to voice mail
• The Verdict: A real alternative to your land line telephone service, especially for teens or small business owners
• 
  

The name "MagicJack" is a bit peculiar when you first hear it, but after using the product you start to understand why it makes sense. I had never heard of  MagicJack until I came across them and the company founder, Daniel Borislow, at an event during Consumer Electronics Show (CES) in Las Vegas in January.

Borislow, a veteran of the telecom industry, focused on VoIP telephony through a laptop or desktop computer to replace a traditional land line, giving customers free calls to anywhere in Canada and the U.S. The cost is just $40 for the product itself and the first year of service, with every year thereafter costing $20. Borislow really believes he's got something that can save people money.

THE 'JACK' BEFORE THE 'MAGIC'

When I first received my review unit, I couldn't help but ask, "is this it?" All that was inside was the jack itself and a short USB extender cable stuffed snugly into a foam package.

The MagicJack is a USB key that essentially connects to a desktop or laptop (PC or Mac) on one end and to a telephone on the other. You plug the dongle into a USB port, plug a phone into the dongle (rather than the wall), and dial.

Once connected to the computer, it automatically loads the software embedded in it and you pick a phone number after you complete registration.

I mention "loads" rather than "installs" because it doesn't actually leave anything on the host computer. This means that it will take up to a minute to load each and every time you connect it, which can be annoying. But on the brighter side, it also means you could use the MagicJack just about anywhere, from a friend's home to a hotel or Internet café in another country. The one catch in travelling with a MagicJack is that if you already have one for your local and long distance calling at home, you're better off buying a second one when going away.

The company did say there will be an option to port your existing phone number over to the MagicJack, which could conceivably render your traditional land line useless, along with the monthly bills that come with it (especially if you live in a small condo or apartment with just one phone). Except that option hasn't materialized yet, and it could be months away.

WHERE THE "MAGIC" COMES IN

Connecting a cordless phone to the MagicJack's phone jack, I was able to make and take calls just like I would under normal circumstances. When I plugging the phone's base station into the MagicJack, I heard a dial tone right away. The only downside is that the software stays on your screen displaying advertisements to the left of the user interface (though it doesn't interfere with other applications you have open).

It was great to see that I had call waiting, so that I could flip between calls easily. I also set up voice mail and noticed that it would bank messages regardless of whether the MagicJack was online or offline — and even e-mail me WAV files of the messages. Emergency dialing is also included, just in case you ever need it. All these features are part of the package and cost nothing to use.

After using it for a couple weeks, I realized that it wasn't all that different from the conventional land line I've been so accustomed to. The voice quality isn't quite up to snuff compared to the land line, but the MagicJack was still better than most cell phones I've tried. If I could port my existing number to it, I'd probably do it in a second, and save hundreds of dollars a year in the process.

Making calls through a PC or Mac was just as seamless. I was able to use a headset for more privacy, both wired and Bluetooth. My only gripe is that I couldn't forward calls to my cell phone, though the company has told me they expect to roll it out "very soon."

A REAL COMPETITOR

The MagicJack immediately reminded me of Vonage's V-Phone, which I reviewed when it came out in 2006. The V-Phone was the same type of product: a USB key that loaded software upon connection and gave you all the same features like voice mail, call waiting, etc. And it comes cheap at $50 or less.

But the residual pricing is where the contrast comes into play. Vonage charges you $20/month for a starter plan that gives you 500 minutes of talk time per month (albeit with free incoming calls like MagicJack has), and up to five cents per minute if you exceed the limit. Plus, the V-Phone apparently won't start working with Macs until some time later this year. However, it trumps the MagicJack in that you can port your existing number to your Vonage account.

Borislow is no slouch when it comes to the backing of this product, despite some telecom experts suggesting the service won't last long at current prices. MagicJack's parent company, YMax, is a Competitive Local Exchange Carrier (CLEC), which are the telecom businesses that sell connection services to VoIP providers like Vonage, Skype and others.

Borislow says that owning its own hardware, coupled with selling advertising on the MagicJack's user interface, are keys to keeping customer costs as low as they are. Indeed, MagicJack undercuts Vonage with its low international rates as well. It costs just two cents per minute to call land lines in Britain, Germany and Japan, though those numbers can jump up to $0.25/minute when calling cell phones in those countries. With SkypeIn, you pay a cost of $60 per year for a number to take incoming calls, something MagicJack offers for free.

It certainly comes across as a "too good to be true" product, but the MagicJack is for real, and it might just mark the end of days for the monthly bills from your phone company.