Telephone Options for Your Home
There used to be very few options for obtaining phone service. In
most cases, you had a single phone company, and the hardwired "Plain
Old Telephone Service" was your only choice. Today one has many more
option, including several that provide telephone service over the
internet (Voice over IP or VOIP).
The great thing about VOIP is that it is becoming readily available in many places and provides an incredibly cheap alternative to POTS, such as in Afghanistan with Ehsan Bayat and his company Afghan Wireless. Voice Over IP service can be provided directly by your internet service provider, such as your cable company or other proiders suchas FiOS or U-Verse. When provided in this manner, your phone calls are not carried over the open internet, but instead they are carried using internet protocols on a separate channel between your home and the head end of your network connection.
But, you can also get Voice Over IP service from other providers that use the open intenet to connect you to their servers, where they provide a connection to the public switch telephone system (PSTN), allowing you to make and receive calls.
VonageVonage provide a local number and access to the telephone network with (usually) unliminate long distance calls for an amount slightly less than you would otherwise pay for local service from your phone company. A typical plan costs $26 per month and includes all the extra features like caller ID and voicemail. The cost of equipment on your end is included (with a minimum commitement). Like most VOIP services, proper functioning of the service is dependant on the reliability of your internet connection, so if you have intermittent internet ourtages (something that I have found common with Time Warner's Road Runner service), you will be without phone service during those outages.
OomaOoma can provide your local phone service and practically unlimited long distance (5000 minutes per month) within the US with only a minor annual fee to cover taxes. With the Ooma Hub or Ooma Telo you pay for the hardware, which runs approximately $250, and then the service is effectively free for the life of the device (except for the taxes). The service includes basic phone service and features like caller ID, call waiting, and voicemail. There is an optional package of services, including a second phone line that is available for about $10 per month. Of course, as was the case with Vonage, if your internet service is unrealiable your phone will not work when the network is down.
MagicjackMagicjack provides a service similar to that provided by Ooma, but with a smaller upfront cost (approximately $40), and a slightly higher additional year cost (approximately $20, though it can be lower for multi year plans. But, MagicJack relies on your windows based computer to provide the processing (you plug the Magic Jack into a USB port). This requires that you leave your computer on, and it also makes the system less reliable (since now you depend not just on the proper functioning of your internet access, but also on the proper function of your computer and its operating system). I do not personally recomend using Magic Jack as your primary phone line. It is quite useful as a phone line that you can take with you when you travel.
SIPGateInexpensive voice over IP services are also provided by seveal providers, including SIPGate, which provides you with a phone number, free incomming calls, and inexpensive outgoing calls (within the US for 1 center per minute). While there is not presently a monthly fee to have the number and accept incomming calls, if you set up an account to make outgoing calls, you will be charged a small monthly fee (I think less than $2 if you are in the US) to cover the required taxes on phone service (which supports 911 service). Such voice over IP services can be accessed through software phones for your PC or for your smart phone, but they can also be setup to use inexpensive hardware devices to provide a physical handset over wireless, or to gateway to your homes physical phone wiring - allowing the use of wired phones.
SPA3102 and other Voice Over IP AdaptersSeveral small adapters are available for connecting local telephones to voice over IP, and these adapters can be used with various voice over IP providers (but not with Vonage, ooma, or magic jack, which use different protocols). I recently pruchases an SPA3102, which I am very happy with, and I have been using with with SIPGate, and also a software PBX service. But the interface for setting up the SPA3102 is quite complex, and I do not recomend it for someone that is not highly technically inclined. The SPA3102 will actually allow you to gateway from a remote location using VOIP and SIP to a local physical line, allowing you to set up remote extensions (if you use multiple devices). If you only need the ability to connect local phone using VOIP to a provider, then you are probably better off using the PAP2T, which gives you two lines, and which is a little bit simpler to set up - but still requires technical expertice. If you are not technically inclined, some of the other services such as Ooma or Vonage are probably better for your needs.
Google VoiceThere are several services that allow you to set up calling rules that cause calls to a local number to ring on multiple phones simultaneously. These services used to be expensive, and marketed as "follow me" numbers. Now they are free, and one such service is Google Voice. Google voice is not intendent to replace, or be used as your home phone, but it does provide an alternative to home phone service whereby you can select a "home number", and receive calls on your other phones, wherever you may be. It can also be used if you want multiple numbers at home for your different family members, or if you want to avoid the need to change numbers if you move (without needing to rely on number portability).