Unlike the PSTN which utilizes circuit switched technology, the Internet utilizes a packet switched technology. Compared to circuit switched networks, packet switched networks are commonly acknowledged to be far more efficient for the transport of information. The Internet is designed according to the Internet Protocol (IP), which provides detailed specifications for the construction, addressing, and routing of data packets. IP addresses are expressed as a series of digits separated by "dots" (periods). IP addresses provide a similar function on the Internet as telephone numbers provide on the PSTN. A communication with an Internet device can be established by sending a message addressed to the IP address of that device. Every device capable of communicating on the Internet has an IP address assigned to it, either permanently, or dynamically as needed. In an IP network, every packet of information carries all the necessary control information needed to connect the originating device to its destination using only the resources needed. This allows for uncomplicated (less) throttle points, geographic expansion, and transport integration. The Internet involves a variety of dedicated lines, routers and so on between the data source and the destination, where the flow of data is less smooth as the data passes through a larger number of such interventions. The packets travel the IP network, passing through routers, computers that operate like switches by reading the addresses on each packet and assigning them to appropriate transmission lines, to arrive at a gateway that decompresses them and converts the packets back into a voice transmission signal. The gateway then passes the call to the local phone network, which delivers it to the intended party. The Internet is an assemblage of interconnected routers that provide data transport services for server computers and personal computers. The interconnection between routers is provided by private line data circuits, the main lines of which constitute the Internet "backbone". Typical connection procedures across an Internet require configuration of computer hardware with a software routine which allows connection with an Internet service provider, and another software routine which accesses a server configured computer across the Internet via established protocols. Internet service providers (ISPs) provide access to the Internet via dial up telephone lines with modems, or dedicated arrangements such as cable modems, and DSL (digital subscriber line) service.

As the use of IP networks continues to grow, more and more IP-based applications are being developed and deployed. The low cost associated with Internet use has spurred the development of audio applications that allow users to receive and transmit compressed Internet voice messages across the Internet. In order to take advantage of certain efficiencies of the IP network, traditional telephone number based communication services are being implemented over IP networks using IP services. The use of the Internet to carry voice telephony services is becoming more widespread as high capacity links are used and new protocols are employed which support real-time traffic. IP telephony is a technology that allows voice telephone calls to be made over the worldwide packet data communications network known as the Internet without traversing the traditional public switched telephone network (PSTN). Internet telephony services permit an Internet user with a personal computer equipped with a sound card, speaker, microphone and modem to initiate a call from the computer and transmit the call over the Internet to a telephone connected to the public switched telephone network or to another similarly equipped personal computer. Typically, a user at one end of the connection speaks into a microphone attached to a personal computer (PC). The microphone carries the audio voice signal to a processor board in the PC which digitizes the signal and creates a digital voice file. The voice file is compressed and transferred to a selected recipient at a distant point on the Internet. Once received, the voice file is decompressed and converted via digital signal processing to an audible signal intelligible to the human ear. Internet telephony or IP telephony offers significant benefits over traditional telephone service. The main advantage of using the Internet for voice telephony services is that of lower cost. This is due to the fact that the Internet uses packet switching technologies that allow statistical multiplexing, and hence, the shared use of the network. Telephone calls to establish communication with the Internet are only charged usually at local rates between the service user and the service provider. The increased availability of low cost Internet access and inexpensive IP telephony devices make using the Internet for telephone calls particularly attractive for end users. Telecommunications networks are experiencing a drastic technology shift from a circuit-switched architecture to a packet-switched architecture. The capacity of deployed packet-switched networks is rapidly increasing every year while circuit-switched capacity is only increasing at a low annual rate. Telecommunications providers have begun to optimize their networks for the packet-switching technology that is expected to dominate future growth.

An Internet telephone is an audio communication system utilizing the Internet which is a wide area data communication network. In an Internet telephone system, an Internet telephone caller is connected from a telephone line of a public telephone network to an access point of an Internet service provider or Internet connection party (provider), and then speech data is transmitted from this access point via the Internet to another access point where an Internet telephone counter party is present. Speech is sent from the access point of the Internet telephone counter party via the public telephone network to a telephone of this Internet telephone counter party. By utilizing the Internet or other packet switched networks, such products have given rise to convergent voice and data solutions as well as created the potential for commercial applications in the realm of e-commerce. The internet phone in practical use now can be largely classified into PC-to-PC, and PC-to-phone. For a PC to PC call, a personal computer (PC) establishes communications with a second PC using add-on software and hardware to allow the PCs to convey the user's voices via an internet IP connection. For a PC to phone call, a user places a modem telephone call to their internet service provider (ISP) with an internet telephone software equipped PC. An internet link is then established to a second ISP located proximate to the area to which it is desired to place a phone call to. The second ISP/IT gateway is then used by the user to place a phone call using the conventional phone systems to the desired local number. In Internet telephony situations, the microphone and speakers of the end user's terminal device function like a telephone handset. In the Internet telephony system, a VoIP (Voice over Internet Protocol) technology is used for integrating the voice communications with data communications. A Voice over IP system enables the transmission of telephone calls over an IP data network such as the Internet. The VoIP technology is that the voice is converted into a frame at an interval of a short time according to a network layer protocol used in the Internet, and a packet assembled by adding an IP header to the frame is transmitted and received. A VoIP system handles a telephone call over most of the network as just another stream of data. VoIP technology supports audio, video, data, or fax communications using the internet protocol (IP) on the public internet and within private intranets.

An internet telephone service allows a caller to place a telephone call from his/her personal computer (PC) through the internet to another audio communication device, such as a wired or wireless telephone. Using the Internet to make a phone call currently requires the user to initiate the call using a personal computer (PC) in combination with a modem to contact an internet service provider (ISP). After initially contacting the ISP, the user must then go through a complex log-on process to gain access to the Internet. Once logged on, the user must then employ an Internet telephony software package in entering the number to be called. A typical internet telephone communication system includes a voice transmitting part that digitalizes and encodes a voice signal and sends the encoded voice data in forms of voice data packets through an internet network; and a voice receiving part that receives the voice data packets and restores the voice data so that the data can be heard. An analog to digital converter digitalizes the analog voice signal received from the microphone, a voice coder compressively encodes the digitalized voice signal, and a transmitting protocol processor generates voice data packets by processing the compressed voice data in accordance to an internet protocol and sends the voice data packets through an internet network. At the end of the voice receiving part, a receiving protocol processor receives the voice packets transmitted through an internet network and extracts the compressed voice data, a voice decoder then restores the compressed voice data, a digital to analog converter converts the stored data into analog signals, and finally a speaker for outputs the converted analog signals. With IP packet switching, as opposed to circuit switching, network bandwidth usage for each call may be reduced because a dedicated circuit is not created for each call.