Verizon details Internet phone plans

Verizon Communications will begin selling Internet telephony services to broadband customers early next year, a company spokesman confirmed Tuesday.

Verizon spokesman Eric Rabe said that by the first quarter of 2004 the company plans to begin offering unlimited dialing between broadband-enabled computers for a flat fee, a feature now included in most voice over Internet Protocol (VoIP) plans. It will later expand its service to provide local, long distance and international calls between computers and traditional phones.

Verizon will also target small and medium-size businesses with more expensive VoIP plans that meet higher quality standards, Rabe said.

Verizon Vice Chairman Lawrence Babbio disclosed his company's plans on Monday at the UBS Global Communications Conference.

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"VoIP for mass market is coming...there's nothing anybody can do to stop it," Babbio said. "Our philosophy has been to play in that environment."

VoIP is a cheaper alternative to traditional telephone dialing because the calls use the Internet and avoid telephone company access fees. About 10 percent of all telephone calls now rely at some point on VoIP, and that percentage is expected to rise dramatically during the next decade.

The impact of Verizon's push into VoIP dialing remains to be seen. For now, the biggest U.S. VoIP proponents are cable companies, which are challenging traditional phone companies by selling local and long distance VoIP telephone services. Other VoIP providers--such as 8x8, Voiceglo and Vonage--are attracting thousands of new customers a week.

Verizon and other traditional phone companies haven't been quick to embrace VoIP, which Babbio described Monday as a "threat" to their core business of selling traditional phone plans. The only other Baby Bell telephone company to announce VoIP plans is Qwest Communications International, which will sell an Internet-based telephone service in Minnesota. A federal judge there recently ruled that existing state phone regulations don't apply to this lower-cost form of dialing.