Four years ago, unlimited domestic long distance service was a deal for $25 month. My Vonage bill had crept up to $37.50 a month with the extra virtual phone number and taxes, fees, and more fees, so I really wanted to dump them. Why pay that much for telemarketers to bug you during dinner? Vonage also had no good blacklist function.
I started looking at Asterisk. Asterisk has gotten much much better about support and stability and there are several third-party appliances available now. By appliance, I mean the download includes an entire OS, generally CentOS 5.2 these days. To name a few: AsteriskNow, FreePBX, PBXInaFlash, Elastix, and TrixBox.
I chose pbxinaflash, just because I liked the blog over at NerdVittles, and it's still free. (I still needed a modest PC and bought an analog card, the Digium TDM410 with one FXS and one FXO. I needed these to get my internal house telephone line lit and connect my Comcast POTS service into the server during the transition period.)
Then I signed up for basic service over at Vitelity. There are other VOIP/SIP trunk providers, but Vitelity worked and has low rates. Once I got my system up and running on the first Vitelity number, I ported over my Vonage number for $18. It took less than a week, compared to the month it took for my Comcast number. My combined savings from Vonage and Comcast will be $60/month for 1.2 cents-a-minute service from Vitelity for $1.49 /month plus 1.2¢ per minute in and 1.44¢ out.
My new service is metered, and that's just fine, because I don't make that many calls from home. (Math: assume $12.50 for inbound, $12.50 for outbound gives me 1041 minutes inbound and 868 minutes outbound, for a total of about 1900 minutes or 32 hours a month of talk time before I hit Vonage-size bills.)
I can also make my Asterisk box do lots of stupid phone tricks, like blacklisting telemarketing phone numbers and getting weather by voice at home.
If you find setting up a Linux appliance intimidating, or you're just not that much of a control freak, you can also buy a Linksys PAP2T-NA for about $50 and Vitelity will support it.
Vonage tried to keep me with a month of free service, but my number was already ported. Goodbye, Vonage! They also tried to charge me a termination fee of $50, which after four years of service didn't apply. Vonage is definitely getting shadier in its billing practices as they get hit with a bad economy and competition.
Update: I built a mini-ITX (small) server for this based on the Intel Atom CPU/Motherboard combo. It worked great, except that the RealTek NIC drivers weren't quite supported in the stock CentOS 5.2 installer. Some quick kernel updates and another temporary NIC got it fixed quickly, but it's not a procedure for the easily frustrated.
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