TELECOM Digest OnLine - Sorted: Cable Operator to Battle Ma Bell For Downtown Customers

Cable Operator to Battle Ma Bell For Downtown Customers

Indianapolis Business Journal (
Mon, 18 Jul 2005 14:15:54 -0500

Bright House Networks plans a fourth-quarter launch of residential
phone service via its cable television system, bringing new
competition to entrenched SBC Communications and to local exchange
resellers in the heart of the city.

That area includes the downtown business district, where Bright House
already provides cable TV and high-speed Internet. Phone service
tailored for commercial use "is probably a year out," said Doug
Murray, general manager of voice services in Indianapolis for the
St. Petersburg-based company.

Such a product "will be raising the level of sophistication of the
service quite a bit. When you start dealing with mission-critical
needs, you want to make sure it's right."

While phone service initially will be targeted to residential
customers, "We certainly anticipate there will be teleworkers" signing
up this year, said Murray, noting the segment that works part of the
time at home.

Following "very quickly" will be a rollout of phone service to Bright
House's customers in Carmel and Zionsville.

Pricing of the phone product for Bright House's 120,000 customers
hasn't been set, but is to be competitive with other cable systems
offering phone service.

Bright House already offers phone service over its Tampa Bay cable
system, at $49.95 as a stand-alone service and at $39.95 when
purchased with other product offerings, such as cable and Internet.

Locally, cable provider Comcast launched phone service in January at a
stand-alone price of nearly $55, or $39.95 when bundled. It includes
unlimited local and long-distance calls.

Comcast also plans to offer a phone package for businesses down the
road, said Mark Apple, spokesman for the Philadelphia-based company's
local operations. "We're still in the infancy of this product."

For now, Comcast is busy expanding its residential reach for the phone

"Within a month, we will be launching to our customers in Hendricks
County," he said.

Apple won't disclose how many phone customers Comcast has signed up,
only that the number has exceeded expectations. Customer service
agents have been pitching the new phone offering to customers calling
to order cable and Internet products, Apple said.

While it's possible to get basic phone service cheaper from SBC,
Comcast boasts that its cable-based phone offering includes a dozen
premium features that phone companies tend to charge extra for,
including three-way calling and Caller ID.

"There's no question the competition and the cable companies are
aggressively promoting and offering voice services in central
Indiana," said SBC spokesman Mike Marker. "There's going to be more
companies competing for business."

While Comcast and Bright House move onto its turf, SBC is becoming
more like its competitors. Last year it offered satellite TV service,
through a partnership with Dish Network. SBC is planning to supplement
its broadband Internet service with a high-speed Internet product
through Dish. SBC also is updating its existing phone network to be
able to offer video services to residential customers.

Business versions of cable phone service are likely to be much more
advanced. Bright House, for example, is looking at the capability of
nine-way teleconferencing. Also, it would offer local businesses
alternative phone numbers, such as those with the same area code of
customers in distant cities-projecting a local flavor to those
customers and eliminating a toll charge.

Making possible such features is Voice Over Internet Protocol, or
VOIP, a technology that underpins the phone offerings of cable
providers. It digitizes voice into packets, compresses them and sends
the information over the Internet or privately managed data networks.

VOIP allows more than eight times the number of calls on the same line
than traditional switched telephone technology.

VOIP is used in different ways. Firms such as Edison, N.J.based
Vonage, which has heavily advertised its phone product, require
customers to have high-speed Internet service. Customers plug phones
and fax machines into a special adapter.

Customers of Comcast's system, on the other hand, don't need an
Internet connection. The phone service is hard-wired into a customer's
existing phone junction box, so all the existing phone jacks in the
building are enabled.

Whatever the flavor, the number of U.S. subscribers to residential
VOIP services is likely to grow to 27 million by 2010 vs. 3 million
today, according to Framingham, Mass.-based International Data Corp.

VOIP penetration also is growing in business applications. Local phone
service provider SBC, for example, already offers VOIP packages that
are integrated into business's overall communications network. Last
fall, SBC announced it was developing for the University of Notre Dame
a system that includes a single inbox for voice and e-mail messages.
It is also developing a network for Ford Motor Co.

Such systems increasingly are replacing aging Centrex and other phone
systems and merge voice with the functionality, of the Internet. Some
analysts forecast that business VOIP could become a nearly $8 billion
market by 2008.

Copyright IBJ Corporation Jun 13, 2005
Copyright 2005, YellowBrix, Inc.
Copyright)1996-2001 Accenture

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