Level 3 to cancel 3Tone Net phone service

Networking specialist Level 3 Communications said that by June, it will phase out its 3Tone Internet phone service, following complaints from resellers. Level 3 said it is developing a new service for 3Tone's approximately 100 customers, which mostly consist of small to midsize businesses. The 3Tone service is network-based, making it a less expensive way for corporations to adopt voice over Internet Protocol, or VoIP, a technology that lets Internet connections double as telephone lines.

Level 3's move is a sign of the intensifying battle to sell VoIP to small- and medium-size businesses, a crucial market that's typically the proving ground for any new technology.