• USA Today/AP, Tuesday, July 24, 2007 11:30 AM

A new, by-invitation-only $399 phone that provides free, unlimited domestic phone calls for customers with broadband Internet service hopes to crack the home-based and small-business niches. Engineers are working on a system that forwards calls to cellular phones.

Users plug in the so-called ooma [sic] Hub--a white machine smaller than a macaroni-and-cheese box--to a broadband connection and primary phone. Ooma Scouts, which cost an additional $39 each, connect to every active phone extension--in the office, kitchen or kids' rooms.

Unlike Skype and other Voice over Internet Protocol services, which work best when the caller and recipient talk through their computers, ooma uses standard home phones. Domestic calls are free, even if the recipient does not have the ooma box. Ooma's executives say the 43-person company will have a steady revenue stream from hardware sales and international calls. Ooma's rates start at 1 cent per minute to Europe.

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