Time Warner Cable to Offer Digital Phone Service in San Antonio, other Cities
Dec. 9–Time Warner Cable, San Antonio’s largest cable provider, said it will offer digital phone service in all its markets by linking its network to those of telecommunications companies Sprint Corp. and WorldCom Inc.
Media giant Time Warner Inc.’s cable division will use the long-distance carriers’ lines to sell so-called Voice over Internet Protocol phone service in its 31 markets, including the Alamo City, officials said Monday.
New York-based Time Warner this fall asked Texas regulators to allow it to offer phone service here. Texas Public Utility Commission staffers are considering the request and should make a recommendation to the commission Wednesday.
“We’ve had a plan all along of rolling out this service nationwide,” Time Warner’s Keith Cocozza said. “We want to launch pretty wide in ’04.” Cocozza said he is “hopeful” the PUC will approve Time Warner’s application, but he declined to say how soon the company may launch service here. In the past, the company has rolled out new services in San Antonio earlier than most of its other markets.
Cable companies like Time Warner want to boost sales by “bundling” phone service with cable TV and high-speed Internet access.
Local-service phone companies like San Antonio-based SBC Communications Inc. are partnering with satellite TV operators to offer their own package of phone, video and Web-access services. And Time Warner faces additional competition from Grande Communications Inc., which offers phone, cable and Internet via fiber-optic network.
“This really intensifies the escalating battle between the local phone companies and the cable companies to get into each others’ business,” Jeff Kagan, an independent telecommunications analyst in Atlanta, said in an e-mail.
“Time Warner can avoid the investment in time and money and jump right into the voice business” by partnering with Sprint and WorldCom, he added.
Under Time Warner’s deal, customers make calls over a handset connected to their cable line, and the call eventually is passed to the networks of Sprint and WorldCom. The two phone companies will collect fees based on the volume of calls Time Warner sends over their networks.
Time Warner has more than 8,000 phone customers in Portland, Maine, and is testing the product in Rochester, N.Y., and Raleigh, N.C.
WorldCom, under the MCI name, and Sprint are the second- and third-biggest long-distance providers by sales. AT&T Corp. is the largest.
“This is an entirely new and huge opportunity for Sprint, MCI and AT&T,” Kagan said. “This is the kind of move that shows there is still gold in them thar hills when it comes to the long distance companies.”
Bloomberg News contributed to this report.
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