Voice over Internet Protocol (VoIP) technologies are integral to modern telecommunications because of their advanced features, flexibility, and economic benefits. Internet Service Providers initially promoted these technologies by providing low cost local and international calling. At present, there is also a great deal of interest in using IP-based technologies to replace traditional small and large office telephone systems that use traditional PBXs (Private Branch eXchange). Unfortunately, the large majority of the emerging VoIP based office telephone systems have followed the centralized design of traditional public and private telephone systems in which all the intelligence in the system is at the core, with quite expensive hardware and software components and appropriate redundancy for adequate levels of reliability. In this paper, it is argued that a centralized model for an IP-based telecommunications system fails to exploit the full capabilities of Internet-inspired communications and that, very simple, inexpensive, elegant and flexible solutions are possible by deliberately avoiding the centralized approach. This paper describes the design, philosophy and implementation of a prototype for a fully distributed IP-based Telecommunication System (IPTS) that provides the essential feature set for office and home telecommunications, including IP-based long-distance and local calling, and with the support for video as well as data and text. The prototype system was implemented with an Internet-inspired distributed design using open source software, with appropriate customizations and configurations.