by Richard Slawsky
New Orleans CityBusiness

Although several companies already offer telephone service using Voice Over Internet Protocol, Metairie-based RazorLine wants to take the technology to a new level.

Along the way, the company hopes to strike a blow at traditional telephone service and recreate the traditional office.

VOIP uses the data network that carries Internet traffic instead of the traditional copper wires to carry voice traffic. By converting voice traffic into digital information, one cable can carry hundreds or thousands of times as much information.

“Nationally, this type of service only has about 3 percent market penetration, so we are at the very beginning of the development of this technology,” said RazorLine co-founder Gene Dry. “We are the only ones doing this in New Orleans.”

RazorLine’s success depends on persuading small businesses to switch to the company’s bundled communication services. While VOIP is the latest buzzword in telecommunications, Dry insists RazorLine’s style of VOIP offers an advantage that “old-fashioned” VOIP does not.

Many companies sell VOIP equipment and service, but a Private Branch Exchange is still required to run the system, Dry said. PBX systems usually require a technician to add extensions or move the service to a new location, he said.

RazorLine’s service functions, normally handled by a PBX system, are instead routed by RazorLine computers in an equipment room in downtown New Orleans.

Dry says a business with approximately 70 employees and associated telephone numbers could save between $800 and $1,000 per month by adopting this type of service. The savings would mainly come from lower equipment maintenance costs, he said

“We are targeting companies with between 20 and 100 employees,” Dry said. “For a company that size, there can be some significant cost savings.”

Dry, his brother Jim Dry, and Richard Jaubert founded RazorLine in January as an extension of 6-year-old NewPhone, a Metairie-based company. The trio of Louisiana State University graduates founded NewPhone to sell prepaid telephone service to customers with damaged credit. NewPhone has 30,000 customers in nine states, a staff of 90, and revenues of more than $20 million.

The team hired a sales staff to market RazorLine’s service, which initially will be offered in New Orleans and Baton Rouge. Jaubert and Gene Dry handle the New Orleans office while Jim Dry covers Baton Rouge.

RazorLine’s service differs from traditional telephone service and traditional VOIP service, Jaubert said, through the makeup of the telephones. Unlike traditional VOIP or telephone service, each phone has its own Internet protocol address, the unique identification number used in routing e-mail and identifying the location of Web pages on the Internet.

“The interesting feature of the product is the mobility,” Jaubert said. “You can actually take a phone home with you, plug it into your DSL line, and if someone calls your office number the phone will ring at your house.”

RazorLine installs a T1 data line to its customer’s office and installs a router to channel data traffic between computers or other Internet devices. The router is then connected to the office’s pre-existing data cable system or cable is installed. Data is then routed through RazorLine’s equipment on Poydras Street, then on to the Internet or to the telephone network.

Telephones can also be plugged into a broadband connection outside the office, Jaubert said.

One reason companies such as RazorLine can offer service at lower prices than traditional phone service is they are classified as data services and not subject to the same excise taxes traditional phone companies pay. That gives companies such as RazorLine an unfair advantage, some say.

“BellSouth’s position is that all VOIP providers, regardless of the service they provide or the regulatory classification they are in, should be subject to the same obligations, including contributing to the Universal Service Fund,” said Merlin Villar, regional director with Atlanta-based Bellsouth Inc.

The Universal Service Fund helps provide service in areas where it otherwise wouldn’t be economically feasible. The issue is under consideration by the Federal Communications Commission, Villar said. BellSouth offers VOIP service to business customers who request it, he said, but the company voluntarily assesses a charge for contributions to the Universal Service Fund.”