HISTORY of VOIP - Late 1990's

Late 1990's

VoIP service relied on advertising sponsorship to subsidize costs, as opposed to charging customers for calls.

The gradual introduction of broadband Ethernet service allowed for greater call clarity and reduced latency, (calls still had static or there was difficulty making connections between the Internet and PSTN (public telephone networks). Startup VoIP companies were able to offer free calling service to customers from special locations.

VoIP hardware less computer dependent (breakthrough in VoIP history). Cisco Systems and Nortel (hardware manufacturers) started producing VoIP equipment that was capable of switching, therefore functions that previously had to be handled by a computer's CPU, such as "switching" a voice data packet into something that could be read by the PSTN (and vice versa) could now be done by another device

Larger companies were able to implement VoIP on their internal IP networks, and long distance providers even began routing some of the calls on their networks over the Internet, now that hardware started becoming more affordable