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A VoIP phone uses a technology known as voice over internet protocol to connect to other phones through a standard internet connection, bypassing traditional telephone companies and analog protocols completely. Originally, VoIP phones were just headsets or a speaker and microphone setup on computers that used software to manage the data that constituted a call. As VoIP became more popular and more widely used in business and commercial applications, phones that were similar to standard analog telephones came into existence with the intrinsic ability to use VoIP.

One inexpensive and very simple option that can be used to create a VoIP phone is to use a small USB device in conjunction with a computer. By attaching the USB device to the computer, giving it access to an internet connection, and then connecting a standard analog telephone to the modem on the computer, a VoIP phone can be established. This is a convenient method in instances where an internet connection is carried through some means, such as a cable modem, that uses connections that cannot be hooked into a standard phone.

When the internet is carried across standard phone lines, as is the case with DSL, then a regular telephone can be converted into a VoIP phone independently of a computer with a device called an analog telephone adapter. The adapter plugs into the phone line, instantly translating the analog sounds from the phone into a compressed digital signal, and then performing the opposite function to receive calls from the VoIP line. Adapters can sometimes be expensive and can potentially prevent standard analog calls from being received.

More commonly, especially in a professional setting, a VoIP phone is a specially designed telephone that looks and functions like an analog phone. These phones are plugged directly into an internet line and can be managed remotely from software installed on a network. In almost all cases, a VoIP phone usually requires some type of third-party service in order to make calls to standard analog lines. Occasionally, the compression and decompression time, as well as network traffic, can cause degradation in the quality of the sound during a call, or can cause a noticeable lag or echo during a conversation.

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