Adelphia to sell AT&T Net phone service

AT&T has signed a co-marketing deal with cable operator Adelphia to sell its Net phone service.

Under the agreement, announced Wednesday, Adelphia will market Ma Bell's CallVantage voice over Internet Protocol (VoIP) service together with its broadband connection. When consumers in Adelphia's 30-state territory contact AT&T for the VoIP service, they will be directed to Adelphia for a broadband connection. The companies did not disclose the terms of agreement.

The move follows a string of similar deals that AT&T recently made with other major cable companies, including Comcast, Time Warner Cable and Cox Communications.

AT&T is using these cable channels to distribute direct-marketing pitches for the CallVantage service. Given the growing popularity of Internet phone calling--and the need to have a broadband Internet connection to use it--the partnerships are a way for AT&T and cable companies to skirt their local phone service rivals.

The partnerships underscore the importance of VoIP in AT&T's long-term plans. The phone giant recently said it would stop selling residential voice services over the Baby Bells' copper wire to new customers, due to changes in regulatory law, but added that it would aggressively market less-regulated VoIP services.

The company also recently linked up with retailers Best Buy and Amazon.com.

The hoopla surrounding VoIP stems from its affordability for both companies and consumers. People place VoIP calls using the Internet instead of the heavily regulated and taxed local phone networks.

Many giants in the technology and telecommunications industries are rushing in to offer the service. America Online confirmed on Monday that is has started testing its own Net telephony service, which is slated for release in 2005.