A VoIP call signaling method including a codec selection mechanism that measures the effective data transmission rate and other network characteristics. In some embodiments, a proxy performs a network test between itself and both end terminals to quantify the quality of the link before notifying both of the endpoints the optimal codec they should use for a peer-to-peer call. In alternative embodiments, the proxy informs the endpoints of the network characteristics and allows the endpoints to negotiate the codec selection. The network test preferably identifies delay, bandwidth, jitter and packet loss rates.