Some time ago in a informal VUC post-call session Karl Fife brought up Magic Jack as a topic of discussion. He felt at the time that they were very possibly doomed to failure by their business model. I doubt that this is the case, and laid forth the logic of my belief. Well, earlier a recent thread over at BroadbandReports.com hinted at support for my theory.
It helps to start out understanding Magic Jack and their business model. Simply put, you pay $40 in the first year to establish an account and get the Magic Jack device. Thereafter you can make calls over your broadband by plugging a traditional phone into the MJ dongle, and the dongle into your PC.