The best phone company in America?

COX IS ALSO CONTACTING its customers on a constant basis, as part of ongoing customer survey work to keep tabs on how well the company is performing and to assess what new services and features its customers want.

“We do extensive customer research as it relates to all of our products and all of our future products,” said David Pugliese, vice president of product and marketing management. “We do periodic tracking of our customer base to make sure they are satisfied and identify issues for our work list. And we also do research trying to understand what are the future services. We have a consumer panel — thousands of consumers nationwide that we can go to almost instantly and get information back.”

Using its own online research tool, Cox can use the consumer panel to test new products going forward, Pugliese said. “These folks are our [high-speed Internet] customers, so that's a double opt-in for us, but we've also tried to balance the panel based on length of service so they aren't all customers who are chasing the truck,” he said. “But we are up to three million or so [high-speed Internet] customers, so we are well past the early adopters.”

Because it was well-established in providing TDM-based voice, Cox came later to the VoIP party than many of its brethren but Esser said that was by design. “We watched IP develop — we did not want to be on the cutting edge of IP, we wanted to be there when it was more mainstream,” he said.

“We looked at [IP] for a lot longer than the launch data would indicate,” Bowick added. “We contemplated the switch from circuit-switched to VoIP for a number of years — I wrote white papers several years ago saying VoIP was the service of the future. We waited as we kept evaluating the technology and its capability until we launched Roanoke as the first VoIP market about four years ago. We have been off and running on VoIP in greenfield deployments ever since. Just this past year, we have actually begun the transition in our circuit-switched markets.

Working with switch vendor Nortel, Cox has now implemented a “cap-and-grow” strategy that puts new voice lines onto the VoIP side of a hybrid switch while continuing to support existing TDM customers. The only difference from the customer perspective is the device on the side of the home, Esser said. The company markets its voice service as digital telephony without making any distinction as to the supporting technology.

Cox also wants to ensure it continues to provide all of its voice customers with the same services, Bowick said. The company launched Phone Tools, a Web-based customer portal that allows both VoIP and TDM customers modify their feature sets.

Maintaining seamless service is important, said analyst Lopez. “It makes the technology a non-decision,” she said. “Customers are just buying phone service from Cox — that simplicity and seamlessness is what makes it interesting for customers. They can focus on the value.”

The company offers e-mail notification of voice mails left at their home numbers, Kaish said, and 25% of its customers are using it. “That is amazing to me,” he said. “But people like the fact that they can check their home voice mail while at work.”

Cox will soon roll out caller ID to the TV, called VistaVision, and will include the ability to let customers redirect the incoming calls to voice mail or answer it, as they choose.

As the company rolls out these new services, Kaish added, there is a fundamentally different approach from what he was accustomed to in the telco world.

“In the world I came from, we nickel and dime for everything,” Kaish said. “The concept here with the bundle is that we are going to continue to add features — like Phone Tools and the caller ID on TV service — and customers will not be charged more.”

Having gone early into TDM voice also provided Cox with an easy entry point into the small and medium-sized business market, and the company is continuing to capitalize on that advantage even as other cable companies try to catch up in selling higher-value business services.

“Commercial services happened somewhat organically for us in the beginning,” said Kristine Faulkner, vice president of product development and management for Cox Business Services. “In some of our larger fiber-rich markets, we started delivering transport to larger customers, and from there we started serving regionally based customers like health-care organizations, governments, school districts, etc. Following from that, when the company began delivering broadband to market, we were seeing natural opportunities to extend that to businesses, and then voice services came along.”

Three-fourths of Cox's business customers are small businesses with 20 employees or less, she said, and the other 25% are “regionally based verticals — health care, government, education and hospitality in some markets, along with real estate, financial services and legal business.”

Cox also is reselling last-mile access to other carriers through a wholesale division. Like the residential side, Cox Business trades heavily on having a local organization for sales and support, Faulkner said.

“We are a facilities-based provider, and we are very entrenched in our localism, our responsiveness and the fact that we own and operate the network we serve,” she said. “That distinguishes us from other competitors that may be reselling an incumbent network. Ultimately, we have the full capability of control over the customer experience, and that is extremely critical in the business sector. Businesses are ultimately focused on the reliability of their network. They don't want dropped calls, they don't want phone outages, etc. and our ability to fully manage the network and the infrastructure that is carrying our services is a very attractive benefit to us.”

The “local” angle extends to sales reps as well, Faulkner added. “Our folks are local from the initial call from the sales rep all the way to how the customer is supported,” she said. “Our customers have the sales rep's telephone numbers. We make ourselves extremely available.”

VoIP is producing new opportunities for services on both the residential and commercial side of the operation. “With the evolution of the IP platform, we can provide very robust services that are IP based,” Esser said. “We now have a full suite of converged services. While the bundle has been a very powerful dynamic in the residential market, it is becoming a very powerful dynamic in the business market as well. I don't know that we really appreciated that.”