However, when placing calls from a PC to Phone, there is usually an access charge incurred. This is because your VoIP service provider now has to pay a local PSTN (Public Switched Telephone Network) for gateway access and to route the calls through their switches and wires (usually via an ILEC - Incumbent Local Exchange Carrier, or CLEC - Competitive Local Exchange Carrier) to the destination phone number. So, the majority of the call is over Internet routes, but it’s the “final leg”, or “last mile” where the biggest cost is incurred for access to a real telephone number. And after all, this really is one of the top reasons we consider VoIP in the first place – to save money on long-distance phone calls.
Now, when making PC to Phone calls, the cost incurred usually is really the cost of making a local phone call, the “local” part being the cost of gateway access through a local PSTN where the call is being terminated. And, as we often think of “local” phone calls as being free, they really are not. After all, I was paying £15.50p a month for the privilege of making “free local calls” in my city of residence.
And this is what VoIP providers do so that we can make calls to other cities anywhere in the world. They purchase or lease lines in each city where they want termination. Then when you place a call to that city, via the Internet, you are charged for the cost to make a “local call” over their leased lines in that city. The price you pay is usually a premium over their costs to make that local call, so they can earn a profit to support their operations.