Comcast dials into phone service

Verizon rival to become available in Md. suburbs tomorrow

December 11, 2005|By STACEY HIRSH | STACEY HIRSH,SUN REPORTER

Comcast Corp.'s move to offer telephone service in suburban Maryland is the latest push by it and other communications giants toward the convergence of phone, wireless, cable, Internet and content into a single set of consumer services.

Comcast Digital Voice introduces to the market a formidable competitor to Verizon Communications Inc., which has been as dominant in regional phone service as Comcast has been in cable television. Comcast plans to announce the new service tomorrow.

Consumers increasingly have more choices when it comes to phone services, from ditching land lines altogether in favor of wireless phones to making calls over the Internet. Now, as Verizon moves aggressively into Comcast's domain with video, ultra-high-speed Internet and even digital TV service, Comcast's move into Verizon's stronghold gives consumers yet another way to talk with one another.

"The big difference is that consumers have an alternative, they have a competitive leverage point they never had before. They have two equivalent providers competing for their affections," said Scott Cleland, telecommunications analyst and chief executive officer of Precursor, a Washington research firm.

Comcast's phone packages, which include unlimited local and long-distance calling, will be priced at $54.95 a month for customers who don't subscribe to any of its other services; $44.95 for those who have either Comcast cable or high-speed Internet service; and $39.95 a month for those who have both.

Verizon offers unlimited local and long distance calling plans starting at $34.95 a month and phone-based Internet service starting at $14.95 a month.

Comcast Digital Voice will be available starting tomorrow in Baltimore, Harford, Howard, Anne Arundel and Montgomery counties and parts of Virginia, the company said. The service is not being introduced yet in Baltimore City, though the company expects it will become available there over the next year.

A technician comes out to the customer's house to install the phone service, the company said, and customers with more than one Comcast service would get everything on one bill.

The offering is indicative of a larger push by cable companies to add more services, experts say. In areas where Time Warner Cable has rolled out telephone services, about 5 percent of subscribers signed up for it, said Donna Jaegers, an analyst who follows the telecom industry for Denver-based investment banking firm Janco Partners Inc.

"What the cable companies in general want to do is build in a lot more services where you could call your telephone and maybe program your [digital video recorder] through it," Jaegers said.

The new technology acts like a regular telephone, offering phone service, caller ID, 3-way calling and other features available through most phone providers. It also allows customers to check their voice mail online.

In the not-so-distant future, though, experts say such technology will also have much greater screening capabilities. Call screening, for instance, could be forwarded to a television set. So a consumer watching a big football game won't have to get up when the phone rings; instead, the caller's name will flash on the TV screen and the viewer can decide if it's worth it to leave the couch for the call.

"Plain old phone service is interesting, but you have to differentiate yourself. You have to offer something new, something different," said William Stofega, a research manager with the Voice Over Internet Protocol (VOIP) Services Program of Framingham, Mass.-based technology-research firm IDC.

This month, Comcast announced a joint venture with Sprint, Time Warner, Cox Communications and Advance/Newhouse Communications that will allow them to bundle video, wireless, cable and Internet services for consumers and develop new technologies together.

And Jaegers said Comcast is working with Sprint to develop a product that would bounce calls made to consumers' cell phones to their home phones when they are home, sparing them from using up wireless minutes unnecessarily. As soon as they leave, the calls would go back to their cell phone.

Other companies are joining the voice battle as well. Vonage offers unlimited calls over the Internet for $24.99 a month. Skype, which has 59 million consumers registered to use its service and was recently acquired by eBay, lets consumers use their computer to make free phone calls. Google, the search giant, has Internet telephony with a service called Google Talk.

"This is exactly what the Bell companies feared: cable companies coming in and picking off their customers," Stofega said.

But Verizon, which has received regulatory approval to acquire long-distance giant MCI, is offering its own new services to heat up the fight. It is rolling out its FiOS Internet service, which the company says is faster than cable broadband and 10 times faster than most speeds available to consumers today.

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