AT&T;, Adelphia Sign Net Call Deal

A month after it stopped marketing conventional residential service, AT&T; Corp. on Wednesday inked a deal to sell Internet calling over Adelphia Communications Corp.’s cable lines.

The agreement makes Adelphia the preferred high-speed Internet provider to deliver AT&T;’s CallVantage service to Southern California homes. The companies hope the deal will help speed adoption of broadband connections.

Adelphia is the largest cable provider in Los Angeles, serving 1.5 million residents from Ventura County to San Diego County. The Denver-based firm has 5.3 million customers nationwide.

CallVantage is AT&T;’s form of voice over Internet protocol, or VOIP, which sends calls over high-speed lines much like e-mail. The service requires that customers have broadband connections, either a cable modem or a digital subscriber line, or DSL.

“We’re doing everything possible to drive broadband penetration beyond its current levels,” said Cathy Martine, senior vice president of Internet telephony at the nation’s oldest telephone company.

Agreements with cable companies, she said, would help consumers overcome the biggest obstacle to taking VOIP service -- lack of a broadband connection.

The U.S. lags behind other countries in adopting broadband, ranking 10th worldwide with about 28% of its households subscribing to receive high-speed Internet connections.

Martine said many companies would push broadband and VOIP this holiday season, which would help AT&T; gauge the market for CallVantage. The company has said it expects to have 1 million VOIP customers by the end of 2005, a fraction of the 29 million local and long-distance consumers it now serves over copper lines.

AT&T;’s service works on any high-speed line. But the company began aligning itself more with cable companies after losing an eight-year battle to lease local phone lines and equipment at low wholesale rates.

DSL is controlled by regional Bell companies such as SBC Communications Inc., California’s dominant local phone service provider. President Bush, who has called for ubiquitous, affordable broadband, retreated this year from the government’s long effort to break up the Bell monopolies.

For now, cable modem service is the only effective competition.

“We believe there’s an opportunity to increase sales of high-speed Internet service with CallVantage,” said Greg Ellenoff, Adelphia’s voice product director.

Many cable firms already offer or soon will offer their own versions of VOIP. Adelphia, now in bankruptcy protection and sorting out bids to buy the company, plans to introduce its version next year.

At that point, Ellenoff said, Adelphia will promote its own phone service, although customers still could use any VOIP company.