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Comcast Gears Up For Phone Over Internet

Cedar Point helps the cable company build out the physical plant 10/17/2004 08:00:00 PM Eastern

Comcast, the nation's largest cable operator, has tapped Cedar Point
Communications as a primary vendor for the rollout of its voice-over-IP (VoIP)
phone service.

The deployment of VoIP technology is seen as a big threat to phone
companies and an important part of the cable industry's plan to offer a triple
play of video, broadband and telephone service. VoIP converts an ordinary phone
call into data—specifically, into Internet Protocol (IP) packets—which can
be streamed over the Internet. By using VoIP, cable operators can deploy voice
services over their existing cable infrastructure. Typical costs are about $150
per subscriber as opposed to $300 per for circuit-switched.

Comcast is currently testing VoIP service in the suburbs of
Philadelphia, Indianapolis and Springfield, Mass. Even as those trials
continue, the company is getting its physical plant ready. According to Comcast
spokesman Robert Smith, 50% of the company's headends will be VoIP-enabled by
the end of this year, 95% by the end of next year. "That doesn't necessarily
mean the services will be launched next year," he says.

Cedar Point's customer list now includes Comcast, Charter and Net2Phone
in Puerto Rico as well as operators in Ecuador and Colombia. Cedar Point
President and CEO Andy Paff says his company's Safari C3 technology simplifies VoIP deployments because
it brings multiple components used for distributed soft-switching under control
of a single unit. A soft-switched architecture is IP-based and less expensive
to install than traditional circuit-switched phone services.

The Safari C3 brings together
several diverse components into one unit: the call-management media gateway
(MG), the media-gateway controller (MGC), a signaling gateway (SG), an
announcement record-keeping server (RKS) and a CALEA (communications assistance
for law enforcement) server. "It gets down to cost, and our approach leads to
better scaling costs, not only in terms of capital expenditures but operational
costs as well," he says. Savings can be up to 66% on initial equipment,
engineering, installation and integration costs and as much as 58% on the
operational side.

One of the advantages cable operators will have in the voice-delivery
market, Paff says, is the ability to do multimedia applications like video
telephony and video e-mail. They also have access to more bandwidth, which
improves the quality of the voice service. There are also services that combine
aspects of voice with video and broadband services, such as calling logs on a
PC or caller ID that appears on the television. Many operators, he says, are
starting with simpler services like call waiting or caller ID.

"We understand why they start where they start," he says. "But the
incremental costs to add the more advanced services are very minor. It's a
question of figuring out what the customers really want and then looking at the
unique potential."

Smith, however, says Comcast won't shy away from advanced services. "We
intend to offer a service that is differentiated by features," he says. "Our
competitive advantage will be features, not necessarily price. We don't want
this to be a me-too service."

For now, Comcast is focused on the trials. Smith says that there is no
end date for them and the company is continually learning about the skills
required for VoIP: from provisioning, to installation to customer service. "We
want to provide our customers with an excellent experience when we launch the
service like our video and broadband products," he says. "On the video side, we
built a digital platform and then added HD, VOD and now DVR. On the Internet
side, we built a two-way network, doubled our download speed and added video
e-mail. VoIP will evolve like that."

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