Ford revs up Internet phones

Auto giant Ford Motor plans to install 50,000 VoIP phones at 110 offices in Michigan, in one of the largest installations of the technology to date by any corporation, SBC Communications said Tuesday.

The automobile manufacturer has tapped SBC, the nation's second-largest telephone company, to provide phones and engineering assistance in installing the gear, SBC said. The carrier will manage the service and will use Internet phones from Cisco Systems.

Because of its size and scope, the Ford-SBC contract, which reportedly is worth $100 million, is a watershed moment for the technology known as VoIP, or voice over Internet Protocol, which converts phone calls into data packets that travel over the Internet.

The contract expands on an existing relationship between the Ford and SBC that dates back to at least 1986. A representative for Ford had no immediate comment.

VoIP comes with the promise of much cheaper phone bills because the calls avoid the heavily regulated and taxed traditional phone network. Also, corporations installing VoIP no longer need to maintain separate phone and data networks.

To date, VoIP technology has been adopted mainly by smaller, more financially nimble companies. Meanwhile, larger organizations have been hesitant to embrace Net telephony, with many claiming the technology remains unproven.

"We are very excited to have the opportunity to work with Ford in this groundbreaking IP telephony deployment," Ray Wilkins, group president of SBC marketing and sales, said in a statement.