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Voip Availablity

January 23, 2005

By Michael Levensohn

In October, Vince Copello of Warwick canceled his phone service and DSL, and pulled the plug on his satellite television feed. Now he has more channels than he can count streaming into his high-definition living room TV.
He has high-speed Internet access that's three times as fast as his old DSL. And he has a phone plan that gives him unlimited long-distance calls.

For all this, he's spending $40 less each month than he used to.

"You know when you're retired, you have to watch your money," Copello says.

In October, Copello and his wife, Sandy, signed up for Cablevision Communication's "triple play" – digital TV, broadband Internet and Internet-based phone service – with an introductory price of about $90 a month, guaranteed for a year.

Across the country, thousands of customers are making the same decision each week, turning their phone service over to Internet-based providers and consolidating their services with a single provider.

They're enjoying services that evolve by the day, all while saving money and helping to revolutionize the way communications companies do business.

CABLEVISION SAYS that customers who sign up for its triple play can save $500 in the first year, and that doesn't count the bottomless bucket of free long-distance.

Since introducing the service in November 2003, Cablevision has signed up more than 250,000 voice customers, making it one of the largest Internet phone companies in the country.

The promotion has bolstered the company's cable business, as well. One in 12 Cablevision customers now uses the company's phone service.

"We have been gaining cable television customers for the majority of 2004," says Patricia Gottesman, Cablevision's executive vice president of product management and marketing. "Unquestionably, the triple play has been an important part of that strategy."

The creation of the triple play was enabled by the refinement of Internet telephone service, known in the industry as Voice over Internet Protocol, or VoIP.

Internet telephone service has been available for years, but wasn't widely used because of its poor voice quality and reliability.

Lawrence Orlick of Scotchtown remembers those days fondly. In the mid-1990s, he accessed a service over his dial-up connection, using a small microphone and his computer's speakers. Orlick's daughter had phone buddies all around the globe, chosen from a list of users. The service was a novelty, and calls were free to anyone else who also used it.

But quality was another matter. In those early days, calls dropped out without warning, a little like making a cellular phone call from Livingston Manor.

"Like with any technology, you've got to start someplace," Orlick says.

A while back, when Vonage began offering Internet calling, Orlick was intrigued.

"The only thing holding me back was that I couldn't get a local phone number," he says.

Then he did a little math and figured out how much he could save. That made the decision a lot easier.

In November, Orlick switched his home phone and fax lines to Vonage. He picked up an adapter at Staples and hooked it up to his phone in 10 minutes.

He said the voice quality with Vonage is as good as it was with his old service, and aside from one minor glitch that was quickly fixed, he's had no problems.

Meanwhile, his phone bill dropped by $65 a month.
"There's nothing to be unhappy about, not when you're saving that kind of money," Orlick says.

Voip WORKS by turning conversations into digital packets of data that are zapped from phone to phone over the Internet. Because of bandwidth requirements, the service is only available to homes and businesses with high-speed Internet connections.

For those homes and businesses, though, the choices are myriad. Voip comes in as many flavors as ice cream, and nearly all of the toppings are free. In most cases, there's no charge for local or domestic long-distance calls, or for add-ons like call waiting, call forwarding, caller ID and three-way calling. Many services offer an enhanced version of voice mail that lets users check their phone messages online.

Both Vonage and Kingston-based allow customers to choose a phone number in another area code, which comes in handy for a family with a child at a distant college, or with relatives in another state.

When Ray Melnik and Marsha Mandel moved from Staten Island to Salisbury Mills in 1999, they left behind a host of family and friends.

With two home phone lines and plenty of long-distance dialing, their phone bill came to about $100 a month. The couple recently added a Vonage line with a Staten Island number. They no longer pay long-distance charges and their relatives on Staten Island can call for free.

Even with three phone lines instead of two, their monthly bill has dropped by about $10.

MELNIK AND MANDEL don't use their Frontier lines much anymore, but they're planning to keep at least one of them.
It's not unusual, industry officials say, for customers to use Voip as a second phone line and for long-distance calls, while keeping their old phone line for incoming calls.

There are several reasons for this:
VoIP's reliability continues to improve, but it still falls short of traditional phone service. Because Voip works through an Internet connection, if a customer loses Internet service or the power goes out, the phone goes out, too. And if the phone goes out, so does E-911 service.

Warwick Valley Telephone, which has lost a couple hundred customers to Cablevision VoIP, is fighting back with a vigorous advertising campaign, titled "Power Failure," that highlights the flaws of VoIP.

Meanwhile, WVT is developing its own Voip product, which should be available in a couple of months.

The irony isn't lost on WVT President and Chief Executive Officer Herb Gareiss, who says the company plans a very different marketing approach for its Voip service, which will be available nationwide.

"We had spent the past few years looking at Voip as a threat, and now we're looking at it as an opportunity," Gareiss says.

Another issue is telephone-number portability. Several Voip providers haven't reached deals with traditional companies that would allow customers to keep their phone numbers when they switch to VoIP. That means customers who give up their old phone lines in favor of Voip often lose their phone numbers.

They're also likely to disappear from phone books and directory assistance, since companies like Vonage and Cablevision don't publish directories.

Old-line phone companies such as WVT have an advantage there, since they can let their own customers who switch to Voip keep their numbers and their directory listings.

In a related quirk, because of limited availability of phone numbers in certain area codes and exchanges, Voip customers' new numbers often look like they came from a land far, far away. Try trading in 986 for 544 in Warwick, or swapping 626 for 943 in Kerhonkson.

Rochelle Jourdan was assigned a 943 number in July, when she dropped AT&T in favor of Vonage.

"People look at me cross-eyed when I tell them," she says.
The new number has actually worked out well, Jourdan says, since it's a Kingston exchange. That means it's still a local call for her neighbors in Kerhonkson, but it's also local from Poughkeepsie, where her husband works.

The couple's phone bill has gone from $75 or $100 a month with AT&T to $30 or so with Vonage.

"My family is all over the country, and my husband's family is in Germany," Jourdan says. "Three cents a minute to Germany is not too shabby."

While the new exchange worked out for the Jourdans, Vince and Sandy Copello were not so lucky. When they signed on with Cablevision, the couple lost their 986 number – a staple in Warwick – and found themselves with a 544 prefix, which is typically assigned to cell phones.

"The 986 number identified you as a Warwickian," Copello says. "It said you've lived here awhile. Now we have a 544 number. Where does that put us?"

Weeks later, another, more serious problem cropped up.
WVT customers who called the Copellos were being charged long-distance rates for what should have been local calls. A neighbor who had signed on with Cablevision had the same issue.

"We called up Warwick Valley Telephone, and they told us it's Cablevision's problem," Copello says. "We called Cablevision, and they told us it's Warwick Valley Telephone's problem."

Copello even went to state regulators, but since the problem involved VoIP, which isn't regulated at the state level, he had no luck there either.

According to WVT officials, Cablevision had failed to negotiate an interconnection agreement with WVT and install the necessary equipment before rolling out service in its territory. As a result, WVT couldn't route calls from its customers to Cablevision customers without incurring the long-distance charges.

Gareiss says negotiations are under way, and the problem should be solved in the next few weeks.

Cablevision officials initially declined to comment, then issued a brief prepared statement saying that Cablevision shares the frustration of WVT customers and has been working with WVT for several months to connect to its network.

THE SCUFFLE between Cablevision and WVT is part of a broader battle being waged between cable and phone companies.

For the better part of the past half-century, the two industries operated in silos, with virtual monopolies protecting their respective territories. Then the Internet came along and the race for market share was on. Now, with cable and phone companies getting into each other's business, all bets are off.

"What you have here are competitors, one of whom is playing offense in the triple play, while the other is playing defense," says John Galanti, president of broadband provider Hudson Valley DataNet. "It's a house-by-house battle."

The cable companies struck first, but the phone companies are fighting back.

WVT already offers video service in part of its territory, and has a triple play of its own. Soon it will add Voip to the mix – providing another option to customers, while potentially cannibalizing its own business.

"If someone else is going to take it [from me], I'm going to take it myself," says Chris Carey, WVT's director of business planning and development.

Verizon Communications offers a triple play including DirecTV, but is also rolling out a video product of its own. The company is laying down a vast network of fiber-optic cable and securing cable franchises in nine states, including New York.

"When we do launch our video service, we're going to compete head-to-head with the cable providers, and offer people choice, in many cases for the first time," says Verizon spokeswoman Sharon Cohen-Hager.

For customers, the triple play means more choices, and the opportunity to save some money. For the cable and phone industries, it's a matter of survival.

Carey says internal studies have shown that customers who take WVT's triple play are 73 percent less likely to leave than customers who only use the company's phone service.

"If you're going to just stay a traditional phone company, and not step up to the plate on the data side and the video side, you won't be here 10 years from now," he says. "The handwriting's on the wall."

What is VoIP?

Voice over Internet Protocol, or VoIP, is pretty much what it sounds like – a method of transporting conversations over the Internet instead of traditional phone circuits.

The speaker's voice is transformed into digital packets of data that are reassembled on the listener's end.

By operating over the Internet, it avoids the costly toll charges associated with traditional long-distance calling. The service is also free of the regulatory and tax burdens faced by the traditional phone business.

Do I have to pay for equipment or installation of VoIP?
That depends on the provider you choose. Most local companies, such as Cablevision and Verizon, offer free equipment and installation in their promotions. Some third-party providers such as, sell IP-ready phones or adapters. You also need a high-speed Internet connection – either cable or DSL.

How do the quality and reliability of Voip compare to my traditional phone service?

Customers say the voice quality is just as good. While the reliability of Voip has improved dramatically in recent years, it is still more likely to fail than traditional service. Also, because Voip depends on your high-speed Internet connection, if your Internet service or your power goes out, you'll likely lose phone service, as well.

If I switch to VoIP, can I keep my phone number?
Probably not, at least for now. Voip providers need to reach portability agreements with local phone companies before they can move customers' phone numbers. Most Voip companies, including Cablevision, haven't done this yet, although several plan to achieve portability soon. Time Warner Cable says it will offer portability when its service becomes available locally.

Will my phone number be printed in the phone book?
Voip numbers, like cell-phone numbers, are not listed in phone books, although some companies plan to offer customers the chance to "buy" their way into a phone book.

Will E-911 work on my Voip phone?
With most providers, it will, although it won't work the same way as it does on a traditional phone. Depending on your provider, you may have to register your phone number and address online.

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