The people of Apple-ton, Wis., have long been open to new technology. The city of 76,000, about 100 miles north of Milwaukee, was home to the nation's first hydroelectric power plant in 1882 and the first successful electric-cable-car company in 1886. So perhaps it shouldn't surprise anyone that Apple-ton is a pioneer in telephone technology. About 18 months ago, the city's schools replaced their regular phone network with an optical-fiber system based on Internet technology. Combining voice and data on a single high-speed wire, the school district has reduced telecom expenses by 30% a year. "I can't think of moving back," says Jim Hawbaker, the district's director of technology. Now, the rest of the country is beginning to catch on. As consumers and businesses look for lower costs and more innovative services, the phone world is turning to Internet technology. Called IP telephony because it uses Internet protocols, or standards, the technology has started to move into homes, offices, and classrooms.
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