Net2Phone dials in Puerto Rico cable company

A small cable operator in Puerto Rico is helping Internet phone provider Net2Phone take a big step into new territory.

The operator, Liberty Cablevision, said Thursday that it has hired Net2Phone to provide a VoIP (voice over Internet Protocol) service to

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its customers, beginning early next year. Net2Phone is acting as a "host" for the service by supplying all the gear, day-to-day management and other resources for the cable operator, a Net2Phone representative said.

Liberty Cablevision is the first customer for Net2Phone's new business of selling a hosted version of VoIP dialing to smaller cable operators that don't have the resources to add phone-calling capabilities to their networks. The company is hoping that Liberty will be a stepping-stone to other small cable operators, according to Net2Phone Chief Executive Stephen Greenbergh.

VoIP services rely on Internet connectivity rather than phone companies' proprietary networks. As a result, Net telephony providers are able to sell unlimited dialing plans at prices well below the rates most traditional telephone companies offer.

"The ability to perfect our solution in Puerto Rico has been a key factor to our entering into discussions with other cable operators," Greenbergh said.

Liberty's decision to expand its Internet telephony service is another indication that cable providers are the United States' biggest VoIP supporters. By selling phone services, cable providers have a much coveted "triple play"--voice calls, high-speed Web service and cable TV. Cable's chief competitors are the major telephone companies, which for now sell voice calling and high-speed Web access but plan to add video in the future.

Meanwhile, larger broadband operators that are building their own networks continue to push forward with their own plans for VoIP. Executives at DSL (digital subscriber line) provider Covad said Wednesday that the company plans to sell a VoIP service sometime next year. Time Warner's cable division, which has been testing a VoIP service, this week said it intends to sell VoIP dialing in four cities by year's end.