- The Washington Times - Wednesday, May 26, 2004

Comcast Corp. Chief Executive Officer Brian Roberts said yesterday the company plans to make digital phone service available to most of its 21 million cable customers by the end of next year.

Comcast, the nation’s largest cable provider, will become the fifth cable company to sell Internet-based telephone service. Cox Communications Inc., Cablevision Systems Corp., Charter Communications Inc. and Time Warner Cable all sell Internet phone service to U.S. subscribers.

Consumers are expected to embrace it because it is cheaper than standard telephone service.

Cox announced plans last month to sell phone service in the Washington area, but it won’t market Internet-based calling to its customers in Fairfax County.

Comcast’s decision to push Internet calling, called voice-over-Internet protocol, may have a bigger impact than Cox’s because it has nearly 1 million customers in the metropolitan area. Cox has 258,000 subscribers in Fairfax County.

“Comcast is the one everyone was waiting on because they’re so enormous,” said Lindsay Schroth, senior analyst at the Yankee Group, which researches technology.

It is not clear when Washington area consumers will be able to sign up for Comcast’s Internet phone service.

Comcast is testing the service in Philadelphia, Indianapolis and Springfield, Mass., and people there will be able to sign up for it first.

Comcast plans to have the technology in place to support digital phone service in half of its markets by the end of this year. By the end of 2005, Comcast intends to have the technology in place to support the service in 95 percent of its markets. It hasn’t named all the cities where the service will be available this year.

Comcast already has 1.25 million phone customers. But that phone service is delivered over a standard circuit-switched network like the one telephone companies use.

Comcast spokesman Robert F. Smith said the company will continue to market the circuit-switched service in the meantime. But those customers could be among the first to adopt Internet calling if Comcast decides to drop circuit-switched calling and transfer subscribers to its digital system.

Mr. Roberts wants to make Internet calling available so Comcast can scavenge customers from Verizon and other local phone companies.

Phone companies are also developing Internet phone services, but they have been slower to introduce them.

Verizon Communications Corp. plans to market its service as soon as next month, said company spokesman Harry J. Mitchell.

“We’ll be coming to the market at a good time,” he said.

There were an estimated 100,000 Internet phone customers in 2003, and that number is likely to grow to 17.4 million by 2008, according to the Yankee Group. Most of those will subscribe to Internet calling through cable companies, Miss Schroth said.

Not only are cable companies developing Internet calling more quickly than phone companies, they are able to market calling plans with video services in a package of bundled offerings.

When Cox introduced its phone service, it said it would bundle it with digital cable and high-speed Internet at a cost of $125 a month.

Verizon sells local and long-distance calling, high-speed Internet and satellite TV service in Rhode Island, where it first began to market its own bundling option in February, for about $137 a month.

Comcast hasn’t disclosed the cost of its Internet calling or outlined a plan for bundled services.

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