(conti.) Cox will likely become the third major MSO to enter the VoIP market near the end of the year when it begins a soft launch of its new VoIP service in Roanoke, Virg. Marketed under the same Cox Digital Telephone brand that the MSO uses in its circuit-switched phone markets, the commercial VoIP launch will follow the more limited technical trial that Cox has been staging in Roanoke this fall. Pricing hasn't been set yet.
Comcast intends to follow these examples with three fresh large market trials of its new VoIP service in Indianapolis, Springfield, Mass. and Hartford, Conn. next year. The MSO, which also aims to expand its current VoIP field trial in Coatesville, Pa., is shooting to have "tens of thousands" of subscribers by the end of next year, according to a report in the Wall Street Journal last month. Plans call for a broader service rollout in late 2004 or early 2005.
"It has a chance to be a big business," Comcast Cable President Steve Burke said. Speaking at an industry event in Washington, D.C. last month, Burke predicted that IP telephony could be just as big a hit for the cable industry as high-speed data has been.
At the same time, smaller cable operators are moving ahead with their initial VoIP rollouts. Both Advanced Cable Communications and Armstrong Cable, which inked distribution deals with Vonage Holdings Corp. in June, have started selling the Vonage service with co-branded multimedia marketing campaigns.
"We're very pleased on both sides," said Dan Elwell, national accounts manager for Vonage, which now has more than 60,000 customers nationwide. "They're surpassing our expectations."
Elwell declined to reveal just what those expectations were. But he said Vonage executives, encouraged by the early cable results, are pursuing similar deals with other Tier 2 cable operators.
"We will be announcing some deals in the next month or two," Elwell said. "We expect to be on more cable systems by the end of the year."
Another smaller MSO, Liberty Cablevision of Puerto Rico, announced plans late last month to launch VoIP service throughout the island, starting early next year. Liberty Cablevision, which is now concluding a 12-month market trial with Net2Phone in several sections of the island, will offer the service under an expanded outsourcing agreement with Net2Phone. The cable operator has 120,000 basic cable customers and passes 310,000 homes.
Liberty Cablevision, owned by Liberty Media, intends to offer two billing options under its "Liberty Voice Links" brand. One will be a variable, per-minute "Every Day" plan. The other will be a flat, monthly rate "Celebrity" plan.
As other cable operators get into the act, Time Warner is pushing ahead with its VoIP rollout agenda. The MSO, which inaugurated service with a soft launch in Portland, Maine last winter, has now signed up more than 5,500 IP telephony customers in that initial market.
Plans still call for Time Warner to introduce VoIP commercially in three more markets this year --Rochester, N.Y. and two major North Carolina cities (presumably Raleigh and Charlotte). In preparation for these and other market launches, the company has now filed with state public utility commissions in seven states -- Kansas, Maine, Missouri, New York, North Carolina, Ohio and Texas -- for permission to offer cable telephony service.
Things are moving forward for VoIP on the regulatory front too. On the state level, a federal judge granted Vonage a permanent injunction in mid-October against the Minnesota Public Utilities Commission's (PUC's) order that the company meet the regulatory requirements of traditional phone carriers. The judge ruled that under federal law, states could not regulate Internet-delivered voice services such as Vonage's.
As a result, Vonage won't have to gain state certification, file state tariff charges, pay universal service fund fees, provide 911 emergency services and meet the other obligations of conventional phone companies to sign up customers in Minnesota. Although the state PUC may appeal the ruling to a higher federal court, company officials termed it "a very positive decision."
On the federal front, Vonage moved to sidestep the Minnesota PUC even before the federal court's ruling. In late September, the company asked the FCC to pre-empt the Minnesota agency and declare VoIP an information service beyond any state's jurisdiction.
The Commission quickly accepted the challenge. In early October, FCC Chairman Michael Powell said the agency will tackle the issue this fall, beginning a proceeding to come up with the proper national regulatory treatment of VoIP. Agency observers predict that the Republican-controlled Commission, with its strong deregulatory bent, will use the opportunity to pre-empt all state regulations and let the nascent IP telephony business develop on its own. |
