There were other problems, too. The $119 PhoneGnome box proved too expensive for many potential customers. Nontechnical buyers were sometimes flustered while setting up the device. Technically advanced users rejected the box as too simplistic and closed to high-tech tinkering.
To escape that rut, the company has launched "PhoneGnome 2.0." The service has ditched its hardware requirement and offers Web accounts and software that include free and low-cost calling features. Beckemeyer hopes the revision will clarify the company's offerings and attract users.
The company now offers a downloadable software phone similar to Skype. Its Web site and marketing have been simplified and expanded, too, all to encourage people to sign up for free accounts and give users a no-risk way to explore the company's offerings.
Here's my take on all this: There are far and away too many VOIP Providers. Many are smoke and mirrors. Far too many don't know what they sell or why.
Virtual NXX, DID's, LNP, and E-911 make it really difficult to provide an FCC compliant voice offering. In rural areas, the only DID's may be with the ILEC. This would require the VOIP Provider to become a CLEC to get phone numbers and 911 access. But it also increases the costs and the required knowledge. (It's one thing to buy everything from a CLEC; it's another kettle to have to figure it all out alone.) In Metro areas (commonly referred to as NFL cities and uncommonly called MSA's), there is little to no distinction among the VOIP providers.
And watching the big guys means that cable MSO's are winning customers in giant numbers; Vonage still is bleeding, even at 2M+ users; and even the originals like Packet8 / 8x8 and VoIP Inc. are stumbling. We certainly live in interesting times.