Time Warner Entering VoIP Arena

Time Warner Cable is progressing its plans to offer Voice over Internet Protocol telephone service throughout the U.S. They announced today the creation of a business unit for its residential telephone service called “Digital Phone”.

From Time Warner’s press release:

Time Warner Cable announced the creation of a new business unit today, Time Warner Cable Voice Services, which will be responsible for overseeing the rollout of its residential telephone service, known as Digital Phone.

Time Warner Cable already announced plans to roll out Digital Phone service in most, if not all of its 31 operating divisions, by year-end. The service has been provided to customers in Portland, Maine since last May and a limited number of households are involved in the initial rollout of the service in the company’s Raleigh, Charlotte and Kansas City divisions.

“We see voice as an important complement to video and high speed data in helping make Time Warner Cable the provider of choice for consumers,” said John Billock, Vice Chairman and Chief Operating Officer for Time Warner Cable. “The creation of this new business unit formalizes efforts we have had underway for several years in developing VoIP as a consumer product.”

Carl Rossetti, Executive Vice President of New Business Development, will add the title of President, Time Warner Cable Voice Services, to his responsibilities and oversee the new business unit, reporting to Billock. Gerry Campbell, who led the Company’s voice initiatives since late 2001, will join Rossetti and the new business unit as Senior Vice President of Operations.

The new group also includes: Sam Howe, Senior Vice President of Marketing; Liliane Zreik, Vice President and Telephone Engineer; and Paul Lang, Vice President of Finance. Each of the company’s operating divisions will hire a general manager to oversee the deployment of Digital Phone in their markets.

Time Warner Cable’s Digital Phone service relies on Voice over Internet Protocol (VoIP) technology, which enables the transmission of phone calls over packet-switched, closed Internet networks. This technology is different from the more prevalent circuit switched telephony, now in use by telephone companies and some other cable operators, which relies on an end-to-end circuit that is open for the duration of any phone call.

Time Warner Cable was one of the first cable operators to explore telephony back in 1993, when it experimented with circuit-switched technology in its Rochester, NY division. The Company later changed its approach and decided to pursue VoIP, which makes use of Internet technology and the cable company’s fully rebuilt digital infrastructure and broadband network. Limited technical trials of VoIP were inaugurated in Rochester and Portland, beginning in the year 2000.

Last month, Time Warner Cable announced strategic partnerships with MCI and Sprint, two of the nation’s leading telecommunications companies, for the nationwide deployment of Digital Phone. These multiple-year deals with MCI and Sprint will assist Time Warner Cable in the provisioning of Digital Phone service to its customers, termination of IP voice traffic to the public switched telephone network, delivery of Enhanced “911” service, local number portability and carrying long distance traffic.

Digital Phone includes unlimited, local, in-state and domestic long distance calling for one low monthly price. By leveraging technology on its existing advanced managed network with quality of service standards, Time Warner Cable is able to offer phone service at a flat price and ensure that customers receive the level of quality offered by traditional telephone service.

Consumers switching to Digital Phone can keep their existing phone numbers and retain their directory listings. Standard features of the service include “411” directory assistance, “611” service calls, Enhanced “911” emergency service, operator-assisted calls, call waiting, caller ID and voice mail. Additionally, the residential phone service connects to each telephone jack in the home by utilizing whole-home wiring.

Currently, Time Warner Cable has more than 10,000 Digital Phone customers in Portland, Maine.