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Time Warner May Offer Internet Phone Service to Winston-Salem, N.C., Customers

Posted on: Thursday, 17 June 2004, 06:00 CDT

Jun. 18--Time Warner Cable Inc. is considering bringing Internet phone service to local customers, as more and more telephone providers begin to explore broadband Internet phone service.

The service -- which links a customer's phone to a high-speed modem line through a computer -- is projected to grow more than 30 percent in the next three years, although mainly through service offered by Internet companies, according to Mercer Management Consulting, a consulting company.

"This concept is taking over," Tim Thompson, the vice president of Time Warner's digital-phone division in the Triad, said this week. "You have customers out there getting more and more savvy."

The service, called "voice-over Internet protocol", works by converting voice signals from a telephone into a digital signal and sending that signal through the Internet. The digital signal is then converted back into a voice signal for the user on the other end of the phone line.

A customer's phone is attached to a phone adapter, which is then hooked into the high-speed modem. The service works by turning the Internet into a phone line, which companies say could save customers money.

Time Warner's service is still in early tests, Thompson said.

Time Warner is charging its preferred customers -- residential customers who use many of its digital services -- about $39.95 a month for the service, which features unlimited local and domestic long distance service, as well as call waiting. The long distance service includes 12 U.S. territories, including Guam.

Officials said that the company would extend it to its other customers, but refused to say when.

Other Time Warner customers will receive the new service "within a reasonable amount of time," said D.K. McLaughlin, the company's vice president of government and public affairs for the Triad. "We're probably ahead of the curve from where we thought we'd be right now."

For Time Warner, the service could be a move to keep up in a competitive telecommunications industry. BellSouth Corp. announced last week that it was also testing Internet phone service in South Carolina and Florida. AT&T Corp. has its CallVantage voice-over Internet system, although the service is not yet available in North Carolina.

Broadband companies such as Vonage are also competing for telephone customers.

"I think its just another form of competition," said Chuck Greene, BellSouth's area director.

Neither BellSouth nor AT&T said when -- of if -- their Internet phone service would be available in the Triad.

However, "we believe it's now ready for primetime," said Clifton Metcalf, an AT&T spokesman. "It's clear the world is moving to an integrated protocol network."

But roadblocks still exist. The system requires users to have a computer -- and a high-speed broadband modem at that. Broadband hookup is faster than traditional, dial-up modems.

Metcalf estimated that only about 18.7 percent of North Carolina computer users have a broadband hook up, below the roughly 20-percent national average.

"The barrier is broadband," he said.

Some Internet voice customers can find it difficult to place emergency 911 phone calls through the services.

Thompson and McLaughlin said that Time Warner's new service will not have those problems.

The company eventually plans to offer the high-tech service to other customers who don't have broadband capabilities, but those costs will be higher.

"We will continue to expand that as we move along through the rest of the year," Thompson said.

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