All through the magic of voice over IP (aka VoIP). Basically, you use your broadband connection to make your telephone calls.
The people providing the service are:
[url]www.vonage.com[/url]
[url]http://www.time.com/time/magazine/article/0,9171,1101020415-227531,00.html[/url]
So if you've got cable or dsl, you sign up with these guys. They send you a grey box that you plug into your router, and then you plug a phone into the box. It functions just like a normal phone, except that you can't use it to call 911 (probably due to some issues with trying to identify the location of the call).
Quality is supposed to be alright, and the price sounds right if you do a lot of long distance calling. I can't personally justify the cost of it right now, but it sounds perfect for my parents, so I've tipped them off to it. If they get it soon I'll review the service for myself.
The phone companies must HATE this, but so far there's nothing they can do about it.
Viper Out
*Disclaimer: I am in no way affiliated with Vonage, I just wanted to tip you guys off to a possible good bargain.*