Companies developing Voice over Internet Protocol (VOIP) solutions are creeping back into the limelight after falling off a cliff in the 2000 telecom meltdown. Part of the renewed focus is thanks to the Federal Communications Commission (FCC) meetings to debate the future of Internet Telephony (count on government discussion of regulating revolutionary technologies to grab major attention). The FCC wants to examine the issue more closely, as concerns about such things as how the FBI would tap conversations and how E911 calls would be directed properly are unresolved.

The reason for all the regulatory chatter? VOIP technology completely sidetracks the way voice communications are normally done. Traditionally, phone calls are placed on the network of phone lines and switches developed over the last century. But VOIP bypasses this route for calls and directs voice conversations over upgraded data networks. This also means that it bypasses standard methods of levying and taxing voice services.

In the 1990s, the promise of talking cheap (or even free) through a computer led to dramatic rises for stocks such as Net2Phone (NASDAQ:NTOP). But as capital spending evaporated, companies developing advanced switching gear to enable voice and video over data networks cut budgets and workforce drastically. As spending is back into the lexicon again, new speculation has arisen about when, not if, VOIP will take off -- and who will profit.

The major telecom equipment suppliers -- names such as Lucent (NYSE:LU), Nortel Networks (NYSE:NT), Cisco (NASDAQ:CSCO), and Alcatel (NYSE:ALA) -- are playing in the space to some degree. The major carriers have also already announced service packages that include some level of converged voice and data services as well, so it is on the verge of going mainstream. VOIP has already gained traction in the enterprise space -- Verizon Communications (NYSE:VZ) and Alcatel, for instance, announced a huge network deployed in a Las Vegas school district.

Much like the early days of the electronic telegraph and radio, though, speculators abound in the VOIP realm. At this early stage, it's hard to weed out the hype and justify lofty valuations in some players. Several companies deriving significant business in VOIP -- such as 8x8 Inc. (NASDAQ:EGHT) and Sonus Networks (NASDAQ:SONS) -- have already risen severalfold this past year. But there's likely to be another phase of shaking out of an already-crowded space in the near future, so adventurers beware.

Dave Mock thinks the height of Internet Telephony speculation will peak when a company changes its ticker symbol to VOIP. He is the author of Tapping into Wireless, and welcomes your feedback at dave@davemock.com.