Cable TV suppliers tune into phones

Connection: Comcast prepares to offer an alternative to Bell Atlantic for local telephone service in the Baltimore area.


Visit Tiffany Dowling's apartment at Briar Cliff East in Cockeysville and look closely at her telephone. Yes, it looks like a phone, rings like a phone, and when she calls her mom, even sounds like a phone.

But there's a difference between her phone and yours: At the end of the month, her bill doesn't come from Bell Atlantic, but from Comcast Corp. For Dowling and 100 or so others around Baltimore, the local cable television company is also the local phone company.

"It's nice to have a choice," she says.

Dowling is part of an experiment the Philadelphia-based company has quietly conducted in two Baltimore County apartment buildings over the past 18 months, paving the way for its move into the local phone business.

This month, Comcast's ambitions to become a local phone company got a big boost, thanks to AT&T's $60 billion acquisition of cable company MediaOne.

As part of the tangled deal, Comcast agreed to offer AT&T phone service in all of the cable company's markets on an "expedited basis." While Comcast officials aren't ready to name a date, analysts say the implications are clear: It won't be long before more of us have a choice of local phone providers. (The choice could extend further if, as expected, Comcast acquires TCI's cable operation in Baltimore City as part of the MediaOne deal.)

Comcast, which provides cable TV service to Baltimore, Howard and Harford counties, isn't the first cable company to deliver dial tone. Cox Communications provides local phone service to 42,000 cable customers, while MediaOne and Cablevision have about 7,000 telephone customers each.

What can you expect when cable telephone service finally arrives?

Lower bills, according cable analyst Michael Harris of Kinetic Strategies Inc. So far, he says, cable operators are undercutting local phone companies' prices by 20 percent to 25 percent and practically giving away popular add-ons such as Call Waiting and Caller ID to entice converts.

"It's all about competition," says Harris. "This is the first legitimate competition local phone companies have had. If they aren't frightened, they ought to be."

Bell Atlantic, like other Baby Bells, has been trying to convince federal regulators that it has loosened its grip on local phone service so it can go into long-distance business. Spokeswoman Sandra Arnette says the company welcomes the cable operators.

"We have nothing to gain by keeping our market closed," she said.

Phone companies are counterattacking on another front, unrolling high-speed Digital Subscriber Line service to compete with the cable firms' residential Internet access offerings.

All of these developments show that cable has come a long way from its start in 1948, when the industry's pioneers in rural Pennsylvania and Oregon began stringing coaxial cable from mountaintop antennas to first-generation couch potatoes who wanted to improve their fuzzy TV pictures. Today, cable service reaches 69 percent of American homes.

But until recently, cable TV has been a one-way street. To pave the way for interactive digital services such as high-speed Internet access and telephony, Comcast and others have spent billions on fiber-optic lines and equipment capable of handling two-way traffic. By year's end, analysts estimate 86 percent of the cable industry's turf will have been rewired.

Phone service poses additional hurdles. Cable operators must construct a separate power supply so that blackouts won't disrupt 911 service and beef up their "back office" systems to handle phone line orders, repair calls and more complicated bills.

"It's not so much an issue of basic technology but scale," says AT&T spokesman Mark Siegel. "The challenge is to provide this service to millions and millions of people."

AT&T, which has been out of the local phone business for 15 years, is wasting no time getting back in. Last week the company announced it would test cable phone service in 10 cities this year, including San Francisco, Dallas and Pittsburgh. The idea, officials said, is to work out the kinks before a nationwide expansion. "This is the year of getting it right," said Siegel.

Cable telephone service, when it arrives here, won't require a special phone or additional wiring inside the home. The only visible evidence will be a small box mounted on the outside of the home called a "network interface unit." About the size of a briefcase, the device connects the copper phone wiring in the home to the company's thick coaxial cable, separating voice from video.

Cable operators will still depend on local phone companies to do much of the work. Cable will carry calls only as far as the phone company central offices, where they'll be routed through the phone company's switches.

Cable companies hope to offer their phone customers even more advanced services as they replace the switched network with the technology that underlies the Internet. This promises to tie voice, video, and data into one seamless digital stream, paving the way for next-generation, Jetsons-like applications.

Imagine adding a second phone line or having your calls forwarded to the neighbors' house for 20 minutes simply by logging on to the cable company's Web site or clicking the TV remote. Video conferencing will be faster and easier, too.

Says Greg Braden of MediaOne: "In the future, a telephone call is probably going to be a lot different than what we define as a telephone call today."

Pub Date: 05/17/99

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.