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September 2004
Time Warner Cable: Ringing in the Future of Telephony
By Susanne Deitzel

Telephony

1. The transmission of sound between distant stations, especially by radio or telephone.

2. The technology and manufacture of telephone equipment.

 

   Several years ago, the future of cable was ushered in by a fleet-footed purple creature announcing its arrival with a “beep-beep.” Little did we anticipate that Road Runner high-speed data (HSD) technology would change another facet of our daily lives as well, the “ring-ring” of our telephone technology.

   Time Warner Cable, the media giant that brought us increased programming, digital video recorders and speedy online access, has almost completed the rollout of perhaps its largest launch to date: residential digital telephone service.

   For non-techies, the verbiage may seem a bit vague, but actually it is a simple concept: instead of a phone signal running over traditional phone lines, the signal is instead sent over Time Warner Cable’s digital cable network, received by a data traffic station and then relayed out to providers such as Sprint or MCI to be transported to its final destination. There is no additional equipment to buy, including phones, and customers can keep their current phone numbers.

   The obvious question is, “Why go to the effort to change my phone service when it works just fine as is?” The answer lies in saving money by bundling services from one provider. Time Warner Cable’s Digital Phone service allows customers to bundle and discount services: Time Warner Cable charges one low, flat fee ($39.95 for digital cable and HSD subscribers, $44.95 for new or traditional cable-only subscribers, and $49.95 for customers who do not want any other cable services) for unlimited local, long distance (domestic U.S.) calls and service options. And, in Time Warner Cable’s case, unlimited really means unlimited – there are no preset minute maximums that can tack on extra fees.

   Once the secret of Internet buffs and industry professionals, high-speed data transfer has heralded digital telephony as an easy, affordable and incredibly appealing product to the average, residential customer.

 

Dialing for Data

   The rollout of Time Warner Cable’s digital phone product is spearheaded in Time Warner Cable’s Charlotte Division by Dorie Climenhage, vice president and general manager of Voice Services. An effervescent blonde with over 25 years in the communications field, Climenhage’s dizzying repertoire of acronyms and tech speak could make even a WIRED editor blush.

   Climenhage cut her teeth in telecom while working for Bell Canada. There, she oversaw the implementation of the largest and newest phone system in Ottawa. Subsequently, she moved to Dallas, Texas, where she went to work outfitting a 72-story office tower with an “intelligent office” communications system. Following Dallas, she went to Miami and became immersed in voice, video and video conferencing technology. Just prior to moving to Charlotte, she was based in New Orleans with media giant, Cox Communications. It was there she oversaw the launch of a new high-speed data and telephony product – Cox’s biggest launch ever.

   Says Climenhage of her experience, “I feel really fortunate to have been on the cutting edge of new products ever since I started in my field. Be it new technology, marketing and sales, or entrepreneurial rollouts, I have seen the evolution of communications. Now I am involved with one of the biggest innovations to date with Time Warner Cable’s Voice Over IP technology.”

   Voice Over IP stands for “Voice Over Internet Protocol,” which is to say voice messages are converted into data packets via a modem or EMA (enhanced media adapter), then channeled with lightning speed over broadband cable networks. In the case of Time Warner Cable’s product, once the message travels the cable lines, it is trafficked by the Time Warner Cable’s regional data plant and then sent to a CLEC (Competitive Local Exchange Carrier), which is a company like MCI or Sprint. From there, the process follows traditional phone lines, arriving at the caller on the other end of the line.

   Explains Climenhage, “Our digital phone service provides several advantages by following this process. The customer can enjoy the speed of our state-of-the-art broadband network, and also retain the benefits of using traditional phone services. For example, because we are partnered with MCI and Sprint, users still have the benefit of using tried and true, reliable phone networks rather than staying on the relatively new public Internet, as well as keeping operator assistance, 411, 611, E911 and similar services.”

 

Calling Out The Competition

   While Time Warner Cable is not the only player in the ever-expanding field of digital telephony, Climenhage cites several advantages to its product over competitors such as Vonage or AT&T. “With some competitive VoIP providers, a phone signal travels over the public Internet for the entire journey of the call. This is problematic for two reasons: the public Internet cannot distinguish between voice data and other data; therefore calls can drop off or result in poor quality. Our product does not travel the public Internet – it travels Time Warner Cable’s private data network and is given priority. Plus, there are simply many untested facets to voice packets over the public Internet, and the customer presently cannot have the same confidence in reliability.”

   Climenhage continues, “When we install our EMA (modem), every outlet in the house is ‘lit up,’ simultaneously, whereas competitors who use their ‘box’ converters light up only the jack that box is connected to.”

   Time Warner Cable also voluntarily agreed to comply with FCC and other regulatory commissions regarding fees and service standards regarding the digital telephone product. As an information provider, TW is not yet required to abide by these standards, but wanted to provide the reliability and services of a primary provider. Comments Climenhage, “Some competitors have even been denied access in places like Minnesota for not meeting the standards expected for its residents. We are as easy and as foolproof as any other primary communications provider.”

   One might wonder how Time Warner Cable was able to convince CLECs like MCI and Sprint to partner with them in what has become an increasingly competitive communications environment. But, Climenhage says that in the face of increased competition and declining profit margins, the companies actually embraced the opportunity to provide Time Warner Cable’s product. “Our partners are very excited, and they see it as a huge opportunity. In addition to being able to benefit from our extensive network and technology, they are also receiving a flat fee for every customer that we sign up to the service. This means we are selling it, and they have no marketing or sales costs.”

   Perhaps not as enamored with this arrangement is Bell South. Bell South is an ILEC, or Incumbent Local Exchange Carrier, which owns the local phone lines and charges CLECs like MCI and Sprint to provide long distance service over its network. Says Climenhage, “As the CLECs created more competition in the marketplace for long distance, ILEC’s were forced to reduce their charges for per-minute long distance. To combat this, some ILEC’s raised their charges to CLECs to use their lines. Since this decreased profitability, the CLECs have embraced a sure-fire way to gain incremental business.”

   Climenhage says that in our market area, some incumbent providers have offered win-back programs, but she appears to have little concern about their impact. She is equally dismissive of wireless phones, “If you have ever had to move close to a window to regain your signal in your home, you understand the difference. Cell phone services consistently say that they provide no guarantee of a signal in your home. I expect we will be providing our service to supplement the portable benefits of cell phones.”

 

Listening to The Customer

   Climenhage adds, “Ours is really a very simple formula. We offer reliable networks, great signals, a robust product with great cost savings and services like E911, call waiting, caller ID and voice mail (for a minimal additional cost.) The strength of our product has allowed us to roll out residential Digital Phone Service over all 31 divisions of our company in one year – which is virtually unheard of in this industry.”

   Time Warner Cable began its digital telephony rollout in lower-density Gaston and Cleveland counties, which has been fully completed. The Mecklenburg County rollout is working its way northward from South End by zip code and is scheduled to be fully completed by year’s end.

   Despite what appears to be a cautiously planned rollout schedule, Climenhage says that the timing was really calculated to deal with an intense demand once the system is complete. “We have fully cross-trained our technicians and CSR’s to handle any question or situation with regard to our products. It was very important to us that we not ‘silo’ the phone product. It’s the ultimate one-stop shopping experience. We want every member of our team to be fully versed in every aspect of the technology and service to be of the highest use to our customers.”

   Climenhage says that combining the digital phone service with other cable services also maximizes future innovations for digital telephony. “One of the most salient advantages we offer by virtue of our network is increasing interactivity between products. The integration of all of these services effectively gives people the power to simplify, control and balance their lives.”

   To those who might feel reluctant to let yet another media vehicle into their home, Climenhage explains, “Time Warner Cable is all about providing choices. For the person who works from home, unified messaging might be integral to productivity; for someone looking to stay connected to distant relatives and friends, the unlimited long distance feature of our Digital Phone service will facilitate that reliably and affordably.”

   Charlotte is the fourth city to be outfitted with the new digital phone product behind Portland, Raleigh, and Kansas City. Considering that New York City’s two million-plus residences are scheduled for rollout next quarter, demand for the product and success of the network has instilled considerable confidence.

   Climenhage says with a smile, “We are thrilled to be able to offer Digital Phone service to Charlotte and look forward to what we expect will be a huge demand. Time Warner Cable really cares about our customers, and to be able to provide them with a product of this magnitude is really fulfilling.”

Susanne Deitzel is a Charlotte-based freelance writer.
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