PhoneGnome: The Hot Rod of ATAs

Internet pioneer David Beckemeyer thinks VoIP should be cheap, easy and readily available. And his invention, the PhoneGnome, a souped up version of the Linksys/Sipura SPA3000, takes a bold step in that direction. With its elegant power and no-brainer configuration, the PowerGnome just may be the future of the ATA.

Internet pioneer David Beckemeyer shepherded the growth of Earthlink from a few thousand users to millions of customers. Now, as co-founder and CEO of the Danville, CA-based startup TelEvolution, the former Earthlink CTO hopes to apply that same model of low cost, mass-market service to the world of VoIP with the launch of PhoneGnome.

“I'm an early Internet guy,” says Beckemeyer, who founded his first Internet services company in 1985. “There are a lot of similarities between the Internet in the mid-1990s and VoIP today. Getting up and running on the Internet then, for a lot of people, was a big hassle.”

At a time when services like AOL didn't offer direct access to the Internet, Beckemeyer says the objective of his Earthlink team was “to take the real Internet directly to the masses, to regular people.”

Beckemeyer is betting that he can do the same thing for VoIP with the PhoneGnome hybrid VoIP/PSTN terminal adapter, a Linksys/Sipura SPA3000 that Beckemeyer and his colleagues have extensively modified to extend functionality and simplify installation.

“We want to be a game-changing play,” Beckemeyer says. “The traditional phone system does a few things really well, when the phone 'absolutely, positively' has to work. In a household a phone serves a lot of needs. But why not benefit from the Internet the rest of the time?”

PhoneGnome is designed to be a plug-and-play solution that gives customers the best of VoIP and POTS in a single appliance that configures and registers itself automatically, uses a customer's existing phone number, adds no monthly service charges, and requires no special access codes and no special equipment other than the PhoneGnome terminal adapter.

The “secret sauce” that makes the device consumer-friendly is TelEvolution's patent-pending technology which configures the device and registers the phone number automatically.

This is how it works: A user connects the PhoneGnome via an ethernet cable to his of her home network, and to a PSTN wall jack using a standard telephone cable. When the PhoneGnome powers up, it automatically reports in to a server to let it know it's online and what its PSTN phone number is. That's the entire scope of the basic installation.

Once installed, when the user dials a telephone number, it checks with the server to see if that number belongs to a registered PhoneGnome user. If it does, the call is made directly via the IP network, bypassing all PSTN toll charges. To promote PhoneGnome-to-PhoneGnome calling, the company's marketing offers discounts for purchases of multiple devices as well cash for an unlimited number of customer referrals.

If a PhoneGnome user has an account with a VoIP service provider that allows "Bring Your Own Device" types of connections (such as BroadVoice, VoicePulse Connect and a number of other services), the device can be configured to use the VoIP account for non-local calls if the recipient is not a PhoneGnome user. If the call can't be made through the Internet, the PhoneGnome will route it through the PSTN.

Configuration is done through a simple web page, called the PhoneGnome Web Portal, that allows for the routing domestic and international calls through different providers. The web interface also provides methods by which PhoneGnome users can block certain outgoing calls (to international phone numbers, for example) and to enable basic telemarketing call screening.

PhoneGnome also offers free basic voice mail service and forwards messages via email to the subscriber.

Because of its peer-to-peer-like features, some are comparing PhoneGnome to Skype. Beckemeyer agrees that Skype has its place. “When you want to be at the PC, a product like Skype can be really convenient,” he says.

Like Skype, PhoneGnome has no monthly service charge. However, there are important differences between the two approaches. One is that Skype is a proprietary system, while the PhoneGnome is based on the public SIP protocol. The other is that the PhoneGnome doesn't require a headset, speakers or even a computer.

“We want to offer the benefit of something like Skype without a computer and a lot of specialized hardware and software to set up,” he continues. Beckemeyer's goal is to give customers advanced VoIP features and low-cost calling “that an ordinary person can set up.”

Though the device is manufactured by Linksys/Sipura and physically identical to a SPA 000 ATA, configuration of the PhoneGnome, Beckemeyer stresses, “is nothing like setting up an SPA 3000.”

Even technicians who can manage the complexity of configuring an SPA 3000, “can't make the SPA 3000 do what the PhoneGnome does, Beckemeyer says. “You won't have things like voicemail to e-mail or telemarketer screening.”

The PhoneGnome also offers additional advances over other hybrid devices in the market.

“The big difference is that it's designed to work with ordinary phone numbers” instead of specialized numbers like SIP addresses, according to Beckemeyer. “You don't have to change your [dialing] behavior.”

PhoneGnome also extends features that are standard for VoIP services — caller ID, voicemail to e-mail, telemarketer screening, click-to-dial — to the PSTN line without any additional charges. “You can start trimming down the PSTN phone bill.”

Another way the PhoneGnome trims that PSTN bill is with free calls.

“You can communicate with anybody on a SIP service — Gizmo users, Free World Dialup, SIPphone,” says Beckemeyer. “A lot of universities are getting on SIP. For families with kids going to school, they can get SIP addresses for their kids.”

But because today most phone calls don't go to SIP addresses, PhoneGnome has some not-so-hidden ongoing costs.

Customers need to sign up with a provider for terminating PSTN calls and calls to another provider's VoIP network. They can simply chose to continue to make calls through the same long distance provider they're currently using -— in which case they don't have to do anything.

As an alternative, customers can choose one of the third party VoIP services offered on the PhoneGnome Web site. Beckemeyer says that list will be expanded to include other provider partners in the future.

Local access DID (Direct Inward Dialing) numbers — which let callers make local calls to an IP phone from a PSTN phone — are also planned for a future release.

Currently TelEvolution is selling the PhoneGnome directly through its Web site — $119 for one and $229.00 for a two-pack. The company also has a pilot retail program underway with Staples and Beckemeyer intends to expand PhoneGnome distribution through other retailers as well. “We designed it to be very retail-friendly with a one-time purchase and no service activation,” Beckemeyer says.

The PhoneGnome has been in beta tests with several hundred users since September and sales activity was brisk on the day the product was officially launched. Beckemeyer is banking on fast growth and has designed TelEvolution's system to support millions of users, saying “who knows, we may have them by the end of the day.”