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BellSouth hangs up DSL phone service

The carrier, one of the first to dabble in broadband dialing, says it is ending a trial of its DSL Talking service for residential customers next week.

BellSouth will stop offering residential customers its DSL Talking service next week, ending one of the first attempts in the United States to sell phone service over digital subscriber lines.

The carrier said it will stop reselling the DSL calling plans from on Feb. 5. Any customers who signed up can continue the service, but will have to deal with Vonage directly, Bellsouth told DSL Talking customers.

The trial BellSouth is winding down was among the first to test whether DSL customers would use a high-speed Web connection to make phone calls. Nearly all cable companies that also sell high-speed Web access have been offering so-called voice over IP (VoIP) plans for several years.

Laura A. Reid, a BellSouth marketing director, sent a letter to DSL Talking customers over the last few weeks that offered little indication why Bellsouth was pulling the plug.

"We sometimes find it necessary to discontinue offering a BellSouth brand of a particular service in one market until we can find a better overall service solution that addresses the needs of all BellSouth customers," she wrote. "This allows us to offer the best services across all customer market segments."

The Atlanta area trial, which began in summer 2002, attracted less than 1,000 households, said Eric Schwartz, assistant vice president at BellSouth. The trial tested the quality of the DSL Talking service but left in question whether it met the quality BellSouth expected.

"It's definitely a complex service to operate and develop," he said. BellSouth isn't ruling out another trial or even launching a broad commercial service, according to Schwartz.

VoIP technology allows people to make phone calls that travel over the Internet rather than solely across wires owned by long-distance phone companies. Such calls can be made from telephone systems that tap into the Internet and from PCs. Regardless of what type of high-speed connection is involved, VoIP plans are generally cheaper than traditional calling plans. This is because the calls use the Web to avoid the long-distance networks owned by major telephone companies.

Worldwide, there were around 2.93 million cable telephony subscribers in 2001, more than the 2.5 million most analysts were predicting, according to a study last year by Allied Business Intelligence, an Oyster Bay, N.Y.-based research firm. That number was expected to almost double by the end of 2002, reaching 5.2 million subscribers, the study predicted.

By contrast, only a handful of companies sell computer telephone service in the United States, with fewer than 100,000 people now using broadband connections to make phone calls. The leading computer phone provider is Edison, N.J.-based Vonage, which has about 10,000 customers.