A big price drop for video phones. Bloomberg Boot Camp, a report on today's technology. There are lots of ways to video conference these days…and the experience gets better all of the time. The cheapest way is to use a Web cam with a service like Microsoft instant messenger. But if you want a true video phone experience… 8X8…is now selling a voice over IP video phone for as little as 99 dollars. It's the same model that was selling not long ago for 250 dollars. Customers have to sign a two year contract for Packet8 voice over IP service….at 20 dollars a month. That includes unlimited calling in the U.S. and Canada…and unlimited worldwide video calls. CEO Bryan Martin…

"It's just the 19.95 a month, flat fee. You don't have to worry about where the video phone is your calling. You're going to get high speed video calls and you're going to get your regular phone service, all for 20 dollars a month. You're going to save a lot of money. And the only catch with it is you have to be a high speed Internet subscriber."

The phones work well. But unlike with other voice over IP plans… if you have the video phone…you can't also plug in a cordless system to cover other rooms in the house. Martin says that may change. And about coming competition from rivals such as Vonage, he calls it good news…

"I think to the extent that more and more service providers are offering video services, we have made the pledge to interoperate with those services."

Which is what video phone services using the Internet will need to succeed. Bloomberg Boot Camp, I'm Fred Fishkin.