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Cablevision to offer commercial VoIP

The company unveils the details of its commercial voice over Internet Protocol service, due to be marketed to customers later this month.

Cablevision unveiled on Thursday the details of its commercial voice over Internet Protocol service, which the cable giant will begin marketing to customers sometime later this month.

The VoIP service, dubbed Optimum Voice, will be offered exclusively to subscribers to Cablevision's Optimum Online high-speed Internet access service, for a flat rate of $34.95 per month. The package offers customers unlimited local and long-distance calling, along with a list of other features such as call waiting, caller ID, call return (*69), three-way calling and call forwarding, according to Cablevision.

VoIP creates telephone service that relies on Internet connectivity rather than phone companies' proprietary networks. As a

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result, Net telephony providers are able to offer unlimited dialing plans at prices well below the rates most traditional telephone companies can offer.

Internet telephony requires a network connection and a PC with a speaker and a microphone to convert analog phone signals into Internet Protocol. Some Internet phone services use existing home or office phones. After years of hype, the technology is finally garnering serious consideration from businesses and consumers, as plans such as Cablevision's arrive on the market.

Cablevision's VoIP service allows customers to plug their phone directly into a cable modem to make local and long distance calls.

A Cablevision representative said Optimum Voice would be available to all of the company's approximately 4.4 million cable customers in the New York tristate region before the end of this year.

Cablevision's decision to offer Internet telephony is another indication that cable providers are America's biggest VoIP proponents. By selling phone services, cable providers have a much coveted "triple play" of services: voice calls, high-speed Web service, plus cable TV. Already, Cox Communications and Comcast have a combined 2.1 million telephone subscribers. Cable's biggest competitors are the major telephone companies, which for now sell voice calling and high-speed Web. Most plan to add video in the future.

Cox and Comcast both use a version of Net telephony that relies on a series of switches to navigate a call through the cable company's fiber-optic network. It's a bandwidth-hogging setup because the switches create a connection between the two phones for the length of the call. With some cable phone services, customers cannot make a call and surf the Web simultaneously.

The switches also can't distinguish between voice and other kinds of data, raising concerns that cable providers won't be able to guarantee a level of performance on par with a traditional phone line.

Cablevision and competitor AOL Time Warner's broadband division sell "pure VoIP," a more modern version of VoIP that solves many of these problems. In pure VoIP, the digital packets containing the voice calls can be prioritized. People can also surf and make phone calls at the same time because voice service doesn't completely lock up bandwidth. And because it uses bandwith more efficiently, more calls can be made at any one time.

AOL Time Warner began trialing a phone service in May, using the same technology as Cablevision. It now has about 4,000 customers, a representative said.

"The numbers (of end users) remain small, but we see significant movement toward wider deployment of VoIP this year," IDC analyst Tom Valovic said.

CNET's Ben Charny contributed to this report.