Bright House Networks said Monday it has launched Internet phone service throughout Pinellas and Hillsborough counties, putting the Tampa Bay area's dominant cable company in direct competition with Verizon Communications.
Bright House plans to add phone service in Pasco County by the end of September and in Hernando and Citrus counties by the end of December.
It is the most dramatic local development to date in the burgeoning nationwide battle between phone carriers, which are increasingly offering TV services, and cable companies, which are branching out into phone services.
Bright House's phone launch follows Knology Inc.'s rollout of phone service in Pinellas County, which began in late July. Meanwhile, Verizon is continuing talks with Tampa city officials to hammer out a franchise agreement that would enable the company to offer pay-TV channels via its new fiber-optic network.
For consumers, all of this means more choices, the promise of better rates and the option of getting one consolidated bill for all of their phone, cable TV and high-speed Internet needs.
"People are looking forward to having a land line phone alternative," said Kevin Hyman, president of Bright House Networks Tampa Bay. "I don't think the situation could be any more ripe than it is today."
However, the service will be available only as a package of unlimited local and domestic long distance calls, making it most valuable to those who make lots of long distance calls. Bright House will charge between $39.95 and $49.95 a month for the phone service, which also includes voicemail, call waiting and caller ID.
Internet phone service already is available in the Tampa Bay area through Vonage Holdings Corp., AT&T and other companies, including Verizon. Like those, Bright House phone service can be used with a regular telephone but will stop working in the event of a power outage.
But Bright House's offering also differs from those competing Internet services in key ways. Most importantly, Bright House says that emergency 911 calls made through its phone service will be routed directly to an emergency dispatcher, who will be able to trace the call immediately. Vonage and AT&T route such calls to an intermediary office, which forwards the call to an emergency dispatcher.
In addition, a customer signing up for Bright House's phone service doesn't need to purchase a high-speed broadband connection to use it. Instead, a high-speed modem is included in the price of the service.
Establishing those features was crucial to being able to compete head-to-head with Verizon and other phone carriers, according to Terri McNulty, vice president of high-speed online services for Bright House Tampa Bay.
"We're here to replace your existing phone service, not to be an adjunct to it," McNulty said.
Initially, Bright House won't offer other features available from Vonage and AT&T, such as conference calling and the ability to access voicemail messages via e-mail. McNulty said Bright House plans to add new features to its phone service over the next three to six months.
Bright House's plans to offer Internet phone service date back to early 2002 when part-owner Time Warner Cable first planned a launch. But after Time Warner and Advance/Newhouse Communications restructured their local cable TV partnership later that year giving the latter managerial control, the Tampa Bay division decided to address other priorities first, such as improving customer service and the reliability of its network, Hyman said.
After months of planning, Bright House began a trial run of its phone service in Pinellas County last month, offering it for $19.95 a month to customers willing to participate in focus groups and surveys to gauge satisfaction. Earlier this month, the company began a small-scale marketing campaign, pricing the service at $39.95 a month and pitching it via telemarketing and direct-mail pitches and to new cable TV customers.
Heartened by the early response, the company will now ratchet up its marketing efforts through the same channels, as well as some cable TV advertising.
"There's pent-up demand for an alternative," Hyman said.
The prices of Bright House's cable TV packages varies by county and are sharply lower in Pinellas County, where the company competes with Knology Inc. of West Point, Ga. But for customers signing up for the company's standard cable package, broadband service and phone service, the cost of all three will generally be about $91 above the price of the standard TV package in that area.
Knology offers phone service in Clearwater and Dunedin. The company is in the midst of a gradual rollout to the rest of the county that is expected to be completed by mid-summer 2005.
Verizon spokesman Bob Elek said the challenge from cable carriers has been occurring throughout the country in other parts of its service territory.
"It's bound to have happened," Elek said, adding that, "This just intensifies the battle."
Bright House's phone service is based on a technology called voice over Internet protocol, or VOIP. Phone calls placed over the Internet are sent as compressed digital packets that are converted back to a standard phone signal when they reach their destination.
HOW MUCH WILL IT COST?
Bright House, which sells phone service only as a package of unlimited local and domestic long distance, charges $49.95 a month for phone-only service. The rate can drop as low as $39.95 when purchased with the company's cable TV and high-speed Internet service. Verizon and Knology Inc. both charge $49.95 for comparable packages of unlimited calls. Knology, which currently offers phone service only in Clearwater and Dunedin, plans to offer a $39.95 promotional rate within the next two weeks. The company also offers discounts for phone service bundled with its cable TV and Internet services.
However, because Bright House is an Internet phone service, it is not subject to the monthly federal subscriber line charge of up to $6.50 levied on all traditional phone lines, including Verizon and Knology. The federal fee is in addition to the rates above.
