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Time Warner Cable Offers Digital Phone Service in Northeast Ohio

Posted on: Tuesday, 20 April 2004, 06:00 CDT

Apr. 20--Northeast Ohioans calling for cheaper phone bills may finally get the answers they're looking for -- and it won't just be from providers like AT&T and SBC.

Time Warner Cable today started offering a digital phone service for its residential customers. The announcement expands an already crowded market to provide a new technology called voice over Internet protocol, or VoIP. AT&T and SBC are exploring similar services, but Time Warner beat them to the punch locally for residential customers.

VoIP may look difficult to pronounce, but its benefits are clear. No long-distance fees. More features. And digital-quality calls. The only catch is the customer usually needs to have high-speed Internet access.

Time Warner is charging $39.95 a month for customers with digital cable and high-speed Internet access. Subscribers who only have one of those services must pay $44.95 for access to Time Warner's private VoIP network. And that includes long-distance.

"Once you get into the digital world, all bits or bytes, it doesn't matter whether it's local or long-distance," said Bill Jasso, a spokesman for Time Warner Cable's Northeast Ohio Division.

It's the price of VoIP, however, that's pushing its popularity the most. AT&T, SBC and specialty provider Vonage are fighting for market share with the likes of Time Warner, as more and more consumers demand the service to save as much as $20 a month.

By 2009, revenue for all providers from business and residential VoIP customers will increase from $3.5 billion this year to $25.9 billion, according to Juniper Research, a technology research firm.

Among broadband companies alone, the market will become the key revenue generator by that year, contributing to an overall services market of $47 billion. (That's on top of the $43 billion spent on broadband access.)

"This sort of completes the bundle that we want to offer our customers," Jasso said.

VoIP is a way of converting sound into data and transmitting it over a high-speed Internet connection, rather than a phone line.

For instance, when a person says something into a phone on a VoIP network, the words are converted into a data packet, like a computer file, and sent over the Internet to the caller on the other end.

That data packet is then converted back into speech. The whole process is almost instantaneous, and the sound quality is as good as or better than a regular phone call.

Time Warner customers can keep their phone numbers, and use the telephones and wiring they already have in their homes. The only change would be a new cable modem in the basement.

Callers can reach 911, 411 and 611 as they do now, and police can tap their phones as they can now.

The only real downside, Jasso said, is that if the electricity goes out, so does the digital phone service. But in Time Warner's test markets, no one seemed to care, he said.

Mike Pruyn of AT&T agreed the features like call blocking, call waiting, voice mail and caller ID -- all for one low price -- outweigh any disadvantages for consumers.

"It's exploding," he said of the market. "VoIP is going to do for local calling what the DVD did for video." AT&T is launching its residential service, dubbed CallVantage, this year. VoIP service for businesses is already available across the country.

The phone company hopes to sign up 1 million users by the end of 2005. The only stumbling block is only 20 percent of the U.S. population is has high-speed Web access-- a requirement for VoIP.

"We think this will speed that up," Pruyn said of high-speed Internet adoption.

The Federal Communications Commission also hasn't set standards for VoIP technology yet.

For the time being, Time Warner Cable and other companies are operating under the assumption that some changes will be mandated.

The Public Utilities Commission of Ohio has allowed Time Warner to pursue VoIP with that in mind.

"It is definitely a service that we see growing," said Shana Gerber of the PUCO. "It will play a growing role in phone service choices for customers."

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To see more of the Akron Beacon Journal, or to subscribe to the newspaper, go to http://www.ohio.com/bj

(c) 2004, Akron Beacon Journal, Ohio. Distributed by Knight Ridder/Tribune Business News.

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