VoIP Phone Services Are Rapidly Coming to Market

Published April 1, 2004

Recently there has been a barrage of announcements by major communications companies that they have begun offering commercial VoIP services or plan to roll them out in the next 6-18 months. All of the following VoIP-related developments have occurred since the beginning of November 2003.

Three of the four regional “Baby Bells” have announced VoIP service rollouts.

On November 17, 2003, Verizon announced that by the end of March 2004 it would offer unlimited, flat-fee VoIP telephone service to its high-speed digital subscriber line (DSL) customers. (Ben Charny, “Verizon Details Internet Phone Plans,” CNET News.com, November 18, 2003.)

On January 7, 2004, Verizon announced a five-year plan for conversion of its nationwide wireline network to the “packet-switching” technology used by VoIP, calling it the “largest ever telecommunications transformation undertaken by a telecommunications company.” (Ben Charny, “Verizon Begins Last Leg of VoIP Journey,” CNET News.com, January 7, 2004.)

On November 20, 2003, SBC Communications began offering VoIP phone service to mid-size businesses in 18 cities and announced plans to offer it in most metropolitan areas in the U.S. by the end of 2004. (Almar Latour, “SBC Telecom Plan Is Set to Take on Regional Bells,” Wall Street Journal, November 20, 2003.)

Qwest began offering VoIP phone service to its Minneapolis-St. Paul DSL customers on December 10, 2003 and announced plans to offer it to additional residential and business customers during the first half of 2004. (Company press release, December 10, 2003.)

The three largest long-distance telephone companies announced plans to offer VoIP telephone service–either themselves, or in partnership with local cable broadband providers.

On December 11, 2003, AT&T announced plans to begin offering VoIP to cable and DSL subscribers in the 100 largest metropolitan areas in the U.S. by the end of the first quarter of 2004. (Margaret Kane and Scott Ard, “AT&T to Offer Internet Calling,” CNET News.com, December 11, 2003.)

On December 8, 2003, Sprint and MCI announced they had signed contracts with Time Warner Cable to provide VoIP service to that company’s high-speed Internet access subscribers in 27 states by the end of 2004. (Peter Grant and Shawn Young, “Time Warner Cable Expands Net-Phone Plan,” Wall Street Journal, December 9, 2003.)

Two of the largest local cable TV companies announced plans to offer VoIP to their cable modem Internet access customers in some or all of their market areas. Time Warner Cable announced plans to expand a trial of residential VoIP in Portland, Maine to all of its service areas by the end of 2004.

On December 15, 2003, Cox Communications launched a trial of VoIP telephone service for residential customers in Roanoke, Virginia. (Ben Charny, “Cox Communications Dives into VoIP,” CNET News.com, December 15, 2003.)

Excerpt from A Permanent Ban on Internet Access Taxation Risks Serious Erosion of State and Local Telephone Tax Revenue as Phone Calls Migrate to the Internet, by Michael Mazerov ([email protected]), Center on Budget and Policy Priorities, February 11, 2004.