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Callwave takes aim at phone companies

new modem

October 4, 1999
Web posted at: 4:25 p.m. EDT (2025 GMT)

By D. Ian Hopper
CNN Interactive Technology Editor

A Santa Barbara, California, company has targeted the many Internet users forced to buy a second phone line to keep from missing a phone call while online.

Callwave's product, Internet Answering Machine, allows a user to hear incoming calls while browsing via a single phone line. The program is free and requires a bit of tweaking to phone lines.

"We've solved one of the biggest problems of consumers," said Dave Hofstatter, Callwave founder.

While using the Internet Answering Machine, or IAM, callers leave a voice message on Callwave's servers. The message is heard immediately on the user's computer speakers while still on the Internet, letting the user screen incoming calls. The messages are saved in the common wave format on the user's hard drive and can be replayed later.

IAM is a quick download at only 150K. It is also simple to install, a main goal of the company. Instead of configuring your computer, said Hofstatter, the process is designed to seem more like watching television. The company expects to make money through advertisements, which appear on the IAM window during use.

IAM tracks when a user is online, like popular instant messaging programs. When a user is on, incoming calls are automatically forwarded to a Callwave toll-free number, which takes the message. When the user is taking a voice call with call waiting, and the user chooses not to take the call, the Callwave 800 number plays a busy signal tone for callers.

This will require some special requests to a local phone provider on the part of the user, but these features are already used for phone company-provided voice mail. Also, Callwave says it will walk users through the process of asking for those services, as well. The busy/call-forwarding feature typically costs a few dollars extra on a customer's phone bill.

It may seem almost poetic that Callwave is telling users to drop their extra phone line and then using phone company features to make it a viable option. Hofstatter has little sympathy for phone companies, depicting them as monoliths deaf to the needs of consumers.

call wave

"We're living in a world that, despite deregulation of local phone companies, these companies have done very little to offer cost reduction to consumers. They're still a monopoly, there are no alternatives to the local phone company. If we want to create some innovative new alternatives, we still have to work with the phone company. The good news is that these phone companies are compelled to work with us and consumers," Hofstatter said.

He also didn't fear repercussions from telcos. "Those repercussions would be illegal, if they were to block us to offer this service. Phone companies traditionally have not been behaving like computer companies, and they're averse to cannibalizing their second line business. To offer free service would reduce a tremendous windfall in second phone lines at 20-25 dollars a month. If telcos were more like Internet companies, they might offer a similar service. But in fact they take years to react to competition."

IAM is available for Windows 95, 98, NT and 2000 machines and is compatible with all Internet Service Providers, including America Online. The product will be available Tuesday from the company's Web site.

Callwave has lofty goals for their product, which they say will evolve in the future. The company paints itself as the white knight of telecommunications, trying to save the little guy a buck or two.

"Millions of consumers in homes and small offices will find it cheaper to get online. We realized the problem demanded an approach that was free and simple, rather than feature-rich and complex. Voice-over-IP solutions are useful, but they're too large and complex. Callwave will offer advanced features, but later on. Ultimately, Callwave will offer consumers almost the entire functionality of a second phone line without the high cost and hassles of service. We're just looking to save a few million users 20-40 dollars a year."
Agencies are catching on to unified messaging systems
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Internet fax -- What are you waiting for?
August 30, 1999
Microsoft rethinks clustering strategy
September 28, 1999

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