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SunRocket fires off new low for Net phone rates

Two former MCI honchos to introduce unlimited domestic calling to any number, plus some international dialing, for about $16 a month.

The cost of using an Internet connection to call any U.S. telephone number has reached a new low: $200 a year, or about $16 a month.

That's what Internet telephony start-up SunRocket now charges customers in Baltimore, Washington, D.C., and Boston for unlimited U.S. calls and up to 100 minutes of international calls a month. On Monday, the company will introduce the $200-a-year plan in New York, Los Angeles and 29 other markets.

It's difficult to find a lower price among the hundreds of carriers that, like SunRocket, sell phone calls that flow over the Internet, thus avoiding inefficient and heavily taxed and regulated home phone networks. SunRocket charges $10 per month less than comparable plans from Net phone industry leaders, including Vonage Holdings. SunRocket even undercuts price extremists like Lingo, which sells unlimited calls domestically and to Western Europe for $20 a month.

Many Internet phone insiders believe the lowest an operator can charge is $20 per month, below which it becomes an unprofitable business. Asked whether SunRocket is actually losing money to offer a cut rate deal to stand out among the hundreds of other Internet phone service providers, SunRocket Chief Marketing Officer Joyce Dorris didn't answer directly.

"Here's an industry in chaos, there's lots of change, it's on the verge of transformation and there's a new technology enabling new things," she answered. "All the sudden, home phone service doesn't need to be annoying, confusing and more complicated. It's possible to put it all together and make it simple."

Dorris and SunRocket co-founder Paul Erickson both left local phone company MCI around 2002 to enter the VoIP market. Dorris led MCI's consumer division, and spearheaded the creation of MCI's first-of-its-kind bundle of unlimited local and long distance called the Neighborhood Built by MCI plan.

"I know from my experience at MCI that there will be hundreds of competitors," Dorris said. "There will just be a few that make it into consumer consideration."