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All on the Line Phone and Cable Companies Compete to Be Your One Source for Voice, Video, Data

Posted on: Tuesday, 12 July 2005, 21:00 CDT

Tim Daro remembers using a rotary telephone when he was younger.

Today, he is 52 and has a Cingular Wireless mobile phone in his hand and Comcast Corp. cable television, AOL Internet service and SBC Communications telephone services at his home in Kildeer.

Merging voice, video and data offers high speed and convenience, regardless if they all come from a cable or telephone line. And the prospect of getting all of those services in one neat source entices him.

"Guess it all comes down to good old-fashioned price, who has the best deal," Daro said.

As information, entertainment and communication services expand and speed up, consumers like Daro are getting more connections with more devices, with all the separate bills often adding up to a sizable monthly sum.

Within the next year or two, consumers like Daro could just subscribe to a "triple play." Maybe even a "home run."

And we're not talking baseball.

Triple play is an industry term for providing voice, video and data services with one so-called pipeline, or source, into your home or business. There is one provider, one bill. The home run, or quadruple play, refers to adding the fourth component: wireless services.

With the emergence of new technologies and the mergers in the communications industry, cable and telephone companies will compete against each other for the first time to offer triple play and home run services.

In the Chicago area, a fierce battle is expected to erupt soon between SBC and Comcast Corp. as they roll out their triple play.

"These companies are gearing up to sell everything to the customer," said Jeff Kagan, an independent telecom industry analyst. "So price and service will attract the customers. But each one of these companies will have fewer customers who would spend more."

Some analysts believe the increased competition will drive down monthly bills overall, possibly by half.

Convergence of voice, video and data also could lead to new applications - more video on demand and other services. It's already laid the foundation for new consumer products, ranging from mobile phones, IP phones and handheld devices to specialized modems and set- top boxes for inside the home.

Forrester Research Inc. said roughly 10 million U.S. households had a home network in 2004. That number is expected to soar to 41 million by 2009, showing how popular the technology will become. Home networking involves piping photos, music, Internet access and Voice over Internet Protocol phone calls over wireless routers to the home network.

On the cable side, Comcast has upgraded about 21 percent of its market to offer triple play, including many of the Northwest and West suburbs. The rollout is expected to continue through mid-2006, said Joseph R. Stackhouse, Comcast senior vice president for the region.

For quadruple play, Comcast has been searching for a wireless partner, said Stackhouse.

"The telephone companies are getting busy now. They're reorganizing and trying to copy us," Stackhouse said. "We've always had the video and data services. But now we're blending all the services. We're blurring the lines of what is video and what is data and what is voice."

The network is the backbone to deliver triple or quadruple play, said Eric Schaefer, Comcast vice president of sales and marketing.

Comcast has 16 High Definition TV channels, standard cable channels, and may not consider the upstart Internet Protocol television. Schaefer said IP TV - television transmitted over the Internet - has limited capacity compared to cable.

"This isn't your father's cable company anymore," he said.

On the telephone side, SBC has the components for quadruple play, but some are being delivered through separate companies and connections.

SBC's triple play offering includes partnerships with Dish satellite TV and SBC Yahoo DSL and dial-up Internet. It also has Cingular Wireless to provide wireless service, the fourth part of the home run, said Carrie Hightman, SBC Illinois president.

"The wireless option will make a big difference to the carrier and to the consumers, because consumers want seamless connectivity and will do it no matter what device they're using," she said.

SBC has been working steadily on blending the different packages to offer seamless mobility. A fiber optics network, called Project Lightspeed, is designed to be expandable for future technology and has been rolling out nationwide, including in Illinois. Last week, the Texas headquarters said completion likely will be delayed for about six months to 2008 due to cost-saving measures.

The $4 billion initiative would deliver IP-based voice, data and video to about 18 million households nationwide. IP TV services and fees, which would be an alternative to satellite or cable, are expected to be announced later.

"Customers don't want to just be able to use it at home, but they want it anywhere, anytime," said Hightman, referring to wireless access. "They're not afraid to use the new technology and will enjoy the quadruple play piece."

When SBC completes its project, it expects to change the nature of services that customers get.

"Will they want it?" she said of consumers. "We know we'll continue to talk with them and constantly evaluate their needs. We believe it depends on the demographics - those with the willingness to change and (who) have the money to buy these services."

Service will be key and SBC will need to differentiate itself from its competition.

"This will then take us from being a communications company to being a communications and entertainment company," Hightman said.

Source: Daily Herald; Arlington Heights, Ill.

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