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Companies team to provide voice over cable

Net2Phone says that by using Level 3 technology it will be able to offer less-expensive Internet-based phone sevices to cable companies.

Net2Phone, a specialist in voice-over-Internet Protocol technology, and Level 3, a provider of high-speed communications services, plan to work together to market local phone services to cable companies.

Net2Phone already sells wireless VoIP services to cable providers that are based on the Session Initiation Protocol, along with other cable-based phone services via a standard known as PacketCable. But the company says it can lower cable companies' overhead for providing phone services using Level 3's technology.

Under a deal announced Monday, Net2Phone will use Level 3's VoIP-enhanced residential phone offering as an addition to its existing cable phone services.

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Net2Phone said the Level 3 partnership will complement its existing relationship with IDT Solutions, under which the companies sell local and long-distance phone services in U.S. metropolitan markets. Along with the Level 3 package, Net2Phone will also market its own VoIP Enhanced Local bundle, which includes local calling.

"Level 3's residential VoIP service will provide us with enhancements to our current telephony network, enabling us to accelerate and expand the availability of our telephony solutions to cable operators," said a statement from Stephen Greenberg, chief executive at Net2Phone.

Despite existing technological roadblocks, analysts predict that VoIP calls will eventually surpass traditional landline calls, thanks to cost savings of up to 30 percent. Thus far, consumer demand has been encouraging, providers say, and VoIP plans have been announced by all of the major carriers in the United States, as well as by their cable rivals.

The entry of cable providers into the market for VoIP, or Internet-based phone services, is expected to spur rapid growth of the sector.