The acronym VOIP stands for Voice over Internet Protocol.
Despite its name, VOIP doesn't mean the public Internet is used. Instead, it refers to the method of data transmission, or the rules of the road.
A caller's voice is electronically divided into digital information, called packets, for transmission and then reassembled and decoded at the receiving end into sound. Internet protocols are like traffic signals that determine what order packets are sent, where each goes and in which order they should appear when they reach the final destination.
The voice packets can travel in any order and do not depend on a continuous connection between the caller and receiver - this means phone and data services, such as computers and fax machines, can simultaneously use the same lines without interrupting each other.
In fact, if you're calling between two VOIP providers that use dedicated lines or publicize their network's address in the global IP directory, a call might be handled directly between providers without ever touching the Internet or even a legacy telephone line from regional phone companies such as BellSouth Corp.
- Jeremy Heidt