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Week in review: VoIP connects

The nascent market for voice over Internet Protocol gets a number of big endorsements, with leading phone companies and a big-time cable provider unveiling plans for Internet telephone services.

The nascent market for voice over Internet Protocol got a number of big endorsements this week, with leading phone companies and a big-time cable provider unveiling plans for Internet telephone services.

Time Warner Cable, one of the biggest U.S. cable TV operators, kicked off the action with a deal that involves Sprint Communications and MCI. The telecommunications giants will provide Time Warner with technology to flesh out the company's new digital phone service, allowing cable customers in 27 cities to make Internet-based calls to regular telephone users.

Analysts hailed the deal as a sign of significant interest in VoIP among cable providers, who are looking at telephone services as a way to draw new revenue from expensive infrastructure upgrades. "This is one of the main products that drove cable companies to spend $75 billion over five years to upgrade their networks to digital capacity," said David Joyce, an analyst with investment firm Guzman.

Next came Qwest Communications International, which launched its first VoIP service, offering Internet telephone service to a few hundred customers in Minnesota.

AT&T got into the act with broad plans to offer Internet calling. The long-distance giant said it will have consumer VoIP services available in its top 100 markets by the first quarter of 2004.

The announcements signal a major turnaround in VoIP attitudes among phone service providers, who initially worried that all-you-can-eat pricing for Internet calls would undercut traditional long-distance service. Competitor Verizon Communications has said it plans to begin Internet phone services in early 2004, while SBC Communications is still conducting tests.

Microsoft moves
Microsoft gave IT administrators something new to worry about with its announcement that it would retire several older products to comply with a court order restricting the way Microsoft uses Sun's Java software. The company will stop distributing Windows 98, SQL Server 7, Office XP Developer and a number of Office 2000-related tools and patches. It will continue to provide support for some of the retired programs, but Windows 98 users will soon be on their own. Microsoft also said it would remove the disputed Java software from Office XP Professional, Windows NT 4.0 and Small Business Server 2000.

In addition, the software giant snagged a puzzling new patent covering HTML applications and expanded its trademark battle with Linux seller Lindows. In enterprise software, Microsoft overhauled its main customer relationship management product and revealed a new willingness to scrap with rivals such as SAP and PeopleSoft.

Grab that patch
Security issues continued to bedevil the software maker. A leading security researcher warned that a recently patched flaw in a Microsoft product could enable another worm attack similar to the Slammer outbreak that wreaked widespread havoc earlier this year. "We believe these new attack vectors make the vulnerability even more dangerous and critical as the proposed workarounds are not sufficient to close them and particularly because they outline a very plausible scenario for a highly efficient worm," said Ivan Arce, chief technology officer for security software maker Core Security Technologies. Microsoft urged customers to promptly apply the patch.

Microsoft was also looking into a reported flaw in its Internet Explorer Web browser that could allow malicious users to create convincing spoof Web sites, which can be used to steal credit card information and other sensitive data.

Finally, what was supposed to an uneventful December turned strange when a rogue security patch started downloading itself to Windows PCs.

Also of note
Hewlett-Packard CEO Carly Fiorina touted the company's recent wins in IT services, but analysts wondered how the company will stand up to competition from Dell and IBM...Research firm IDC predicted significant gains in PC sales this year and next...John Chambers, head of networking equipment giant Cisco Systems, also gave an upbeat forecast for overall IT spending...Intel reorganized its networking and communications chip businesses...Sales of portable music players are expected to continue to show strong growth...And Microsoft paved the way for the next major update for Windows XP.