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To: djane who wrote (47069)	5/18/1998 1:30:00 AM
From: djane	Read Replies (1) \| Respond to of 61433

IBM also disagrees with Grubman 5/18/98 NY Times. IBM Teams Up With Internet Phone Service By SETH SCHIESEL, May 18, 1998 nytimes.com Throwing its weight behind the nascent business of Internet telephone calls, IBM has agreed to promote the cyberspace phone service of IDT Corp., according to executives close to the negotiations. The companies plan to announce the marketing agreement this week, the executives said. The IDT service will be offered on IBM's growing Internet access network. The support of IBM represents a big vote of confidence for new technologies that transmit phone conversations over the Internet rather than over traditional telecommunications networks. Although calls over the Internet sometimes have a poorer sound quality than conventional phone calls, differences in technology and regulation mean that Internet phone providers can typically offer lower prices than can traditional long-distance companies. IDT, a small Internet access provider in its own right, with 80,000 subscribers, already offers the voice service, called Net2Phone, to its own Internet customers -- and to anyone else who cares to use it with any other Internet provider. IDT, which is based in Hackensack, N.J., also markets its voice service through Singnet, an Internet service provider in Singapore. But the deal with IBM would be the first Internet phone pact with a major international service provider. Under the terms of the agreement, the Net2Phone software will be included with IBM's standard Internet access kit. IDT's program allows users to place long-distance calls to normal telephones from computers equipped with a microphone. IBM will also place a button on its Web site at www.ibm.net enabling users to download IDT's software. IBM's Internet service has about 750,000 customers. Calls they make using IDT's service will travel over IBM's extensive international network. Neither company will pay the other an upfront sum as part of the deal, executives close to the companies said. Instead, the two companies will share revenue generated by IBM customers who begin to use IDT's service. America Online Inc. charged Tel-Save Holdings Inc. $100 million last year for the right to sell long-distance service to America Online's customers. But that was basically a joint-marketing deal for conventional phone service -- not Internet calls. Though small and few in number, companies that use Internet technology to carry long-distance calls have been shaking up the telecommunications industry with prices as low as 4.9 cents a minute for calls to anywhere in the United States at any time. Government rules that are meant to promote the development of cyberspace allow Internet phone companies to price their offerings below those of traditional carriers, primarily by waiving the fees that most long-distance carriers must pay for connecting to local phone networks. The Federal Communications Commission has taken the first steps toward closing that loophole. Even so, transmitting calls with Internet technology is more efficient than traditional telephone networks, which means lower costs. In fact, some experts predict that Internet-style phone calls may one day replace most conventional telephone calls. Perhaps the best sign that Internet phone companies are emerging as a new force in the industry is that established long-distance companies are beginning to try the technology for themselves. Last week, AT&T Corp., the No. 1 long-distance carrier, began offering Internet calls on a trial basis in Boston. Related Sites Following are links to the external Web sites mentioned in this article. These sites are not part of The New York Times on the Web, and The Times has no control over their content or availability. When you have finished visiting any of these sites, you will be able to return to this page by clicking on your Web browser's "Back" button or icon until this page reappears. IDT Corp. Singnet IBM AOL AT&T Corp. Home \| Sections \| Contents \| Search \| Forums \| Help Copyright 1998 The New York Times Company