Adelphia partners with Level 3 for VoIP service

Adelphia Communications selected Level 3 Communications as its infrastructure provider for the voice over IP service it plans to launch later this year.

The financially embattled cable company will use (3)VoIP Enhanced Local, a wholesale VoIP offering that enables companies to provide voice service over their existing broadband connections, and provides a full range of services including interconnection to the public switched network and E911 support.

The deal is a significant one because is gives Level 3 an entry point to the major cable operators. Adelphia is the country's fifth largest cable operator but it is also in the process of being sold to one or more of the other large cable companies. Final bids were submitted Jan. 31 and the industry is still awaiting the selection, with the favorite being a consortium between Comcast and Time-Warner.

"Given the success that cable operators are already seeing with broadband voice services, it is a fairly important strategic deal for Level 3," said Myrle McNeal, Level 3 vice president. "Our view is that we will be launching services in fairly new terms, prior to any transaction being complete. Given that what we are doing is fairly technically advanced, we think any acquirer will be interested in what we are doing. I would think so. The underlying service is sufficiently unique, I think, that there is a good chance it could be continued in spite of the [ownership change]."

The Level 3 service is not only SIP-based, which most current cable networks are not, but also benefits from a streamlined operations process developed by Level 3 in partnership with Adelphia and others, McNeal said. The cable industry is currently adding 18,000 VoIP lines weekly, according to Kinetic Strategies.

More importantly, McNeal said, cable's approach to VoIP is in line with how Level 3 sees the service--as a primary voice line replacement, not a cheap second line.

"What we are focused on providing is a set of capabilities that allows a mass market to buy a primary line telephone service," he said. "That is the thing that cable companies have in going into this space--they have technicians that will go out and make sure the phone works the right way."