Comcast Corp. next week plans to roll out Internet phone service in Northern Virginia and suburban Maryland to try to steal customers from Verizon Communications Inc.
U.S. cable and phone companies are increasingly competing directly by trying to lure customers with a "triple play" of phone, high-speed Internet and cable TV service.
Philadelphia-based Comcast, the largest U.S. cable television provider, will sell its Comcast Digital Voice service for $39.95 a month to customers who buy it with cable and high-speed Internet service, $44.95 for those who buy it with either cable or Internet, and $54.95 on its own.
The service, which allows users to hook a regular telephone into Comcast's cable network, offers unlimited local and domestic long-distance calling and a dozen features including voice mail and caller ID. It costs more than a comparable $24.99 offering from Vonage Holdings Corp., the largest voice over Internet protocol (VOIP) provider.
New York-based Verizon, the region's dominant phone provider, offers stand-alone unlimited local and long-distance service for as little as $34.95 a month, albeit without features such as voice mail. Its Verizon Freedom Extra plan, which has features comparable to the Comcast offering, costs $59.95.
"We have better reliability. We have better value and pricing on a stand-alone basis," said Mark W. Adams, a Verizon executive director for regional marketing. "We offer more choice."
Adams also said Verizon offers a "triple play" via its relationship with the DirecTV satellite provider. However, it currently offers its Fios cable TV in only three markets: Herndon; Keller, Tex.; and Temple Terrace, Fla.
Comcast provides traditional, analog phone service to 1.2 million customers around the country. Rather than pushing to expand this, like most cable companies it has preferred to wait for the development of VOIP service, which can be deployed at much lower cost.
Comcast said its new voice service is better than that of VOIP providers such as Vonage because calls travel chiefly over its proprietary network, which it controls, before typically connecting to local phone lines that carry it into homes. Most VOIP providers send their signals over the Internet, rather than their own networks, and have less control over quality of service.
"They [Comcast] control the network, and so there is a service quality that they can ensure. From their perspective, it is worth the premium [price], and arguably it is," said Aditya Kishore, director of the media practice at Boston's Yankee Group Research Inc., a consulting company.
"Vonage's service is innovative because it doesn't need anything more than a normal broadband Internet connection to work perfectly," said Vonage Vice President of Government Affairs Chris Murray. "Our customers prefer our service to normal land-line service."
Comcast plans to announce on Monday that it will offer its new voice service in Alexandria and in Arlington, Anne Arundel, Howard, Montgomery and western Prince William counties. It will also be sold in Reston and in Baltimore and Harford counties. The service will be offered in the District and Prince George's County by the end of 2006.