Net2Phone - Cable Telephony Division

Vol. 1, No. 2 • Fall 2005

In This Issue...

CEO Connect
As VoIP evolves, Net2Phone adapts and embraces change.

Customer Spotlight
Bresnan Communications -- Growing VoIP in the West

Educational Technology
Regulatory Roundabout -- Calming E911 concerns

Product Spotlight
VoiceLine...Let it shine!

What's Happening @ Net2Phone?
Links to recent press releases and a list of trade shows and events where Net2Phone is scheduled to appear.

CEO Connect

The VoIP Industry comes with its fair share of challenges. Take regulatory issues for example: it seems that the minute one hurdle is cleared, another is presented. However, once the initial trepidation subsides, it becomes clear that addressing each of the issues head-on can make our industry stronger and more agile. Smart regulation will enable us to develop the dependable products our subscribers expect and deserve from us.

One domestic issue that's been receiving a lot of attention lately are emergency services, such as E911. Accordingly, the FCC demanded all carriers prove that by the end of August they had notified their customers of potential risks. We're proud to say that Net2Phone proactively provisioned systems and procedures designed to ensure compliance, and then followed up with each of our operator-partners to make sure they had all the tools and information necessary to effectively communicate with their subscribers. The results were terrific: as of August 20, nearly all of our partners had fully complied.

In parallel, we have been pressing industry players to make progress. While the FCC has been focused on balancing public safety and the proliferation of new technology, Net2Phone has been working to improve our SIP service by lobbying local exchange carriers (LECs) to broaden coverage for our customers’ target markets.

And, in markets where the LECs aren’t building, we’re working with cable operators to craft flexible business plans to help them drive their own facilities build-outs in local markets. This will make it possible for them to directly connect to Public Service Access Points (PSAP) and support full E911 service.

Net2Phone is also working with new technology providers to offer V911 services. Essentially, this "virtual" emergency service will tap into a central database of information that will route to the local PSAP without the need for dedicated local facilities.

Our industry can seem perplexing and complicated to newcomers. But Net2Phone is committed to sharing our knowledge and expertise with our MSO partners to provide the best, most reliable local telephony service available anywhere. We have been delivering voice services for almost a decade and we’re comfortable with the regulatory and market challenges: we know VoIP.

Until next time...

Liore Alroy
Chief Executive Officer

Customer Spotlight: Bresnan Communications

Net2Phone is proud to call Bresnan Communications -- the nation’s 13th largest MSO -- a client. Since 1984, Bresnan has been providing customers in Colorado, Montana, Wyoming, and Utah with cable service, and have now expanded their offerings to include telephony.

In November of 2004, Bresnan began speaking with Net2Phone about bringing packet-cable managed telephony to their market. By March of 2005, the new system was deployed and active.

Bryan Kahrar, Net2Phone’s manager of Bresnan's initiative says, "Bresnan Communications wanted to offer broadband telephony service that not only had the traditional voice features, but also provided enhanced functionality, advanced features, and reliability for customers." Net2Phone's cable telephony service fit the bill.

Founder William J. Bresnan is a community-minded leader whose company supports his mindset. To that end, when it came to getting the word out about the new cable phone offering, Bresnan Communications launched a variety of marketing initiatives including community events with local celebrities. Mailings, radio ads, television spots, bill stuffers, flyers, and local outreach created such a buzz that people were actually waiting for the product to launch. "They did an excellent job ramping up enthusiasm and support for their new service offering," says Kahrar. "So when it finally arrived, people knew about it." Able to offer a double or triple play to customers, Bresnan introduced promotional pricing packages to entice new users.

Their marketing efforts paid off. Bresnan's new subscriber rate is averaging about 2,000 new customers per month, and that's with only six available markets: Grand Junction and Durango, CO; Cheyenne, WY; and Billings, Butte, and Helena, MT. By year end, Bresnan plans to launch VoIP service in six additional markets.

With over 500,000 homes passed, Bresnan Communications is a local leader committed to bringing the newest and best technology to their loyal customer base. They are known for their excellent customer service and dedication to customer satisfaction. Net2Phone provides the network and softswitch for Bresnan's cable telephony, but our involvement is transparent to customers since the product is marketed as a Bresnan offering. With their top-notch reputation for quality and service, local customers know that if it's called Bresnan, it's a service they can trust.

Regulatory Roundabout: Calming E911 Concerns

When the FCC decided that every VoIP customer needed to be made aware of the safety risks of cable-based telephony, many operators thought the fix was worse than the problem. Yet, operators rallied to make it happen before the August 29 deadline. And VoIP customers are the better for it.

But there are still more issues surrounding E911. Regular 911 service routes calls to a PSAP (Public Service Access Point) where an operator can see the incoming phone number and ask the caller where they are. E911 service takes it to the next level, where the operator can see the caller's phone number and address and can dispatch help even if the caller can't communicate. The problem for VoIP service lies in the fact that though it is not marketed as such, VoIP service can be portable. Therefore, the caller may not actually be where they "should" be according to the information the operator has access to.

To address alternate location issues, the FCC has proposed that cable operators provide users with MTA devices that can automatically transmit a user's location to emergency operators. But, of course, this costs operators money. The American Cable Association (ACA) is lobbying against such proposals, calling them inappropriate for the packet-based VoIP industry which is not intended to be nomadic. Furthermore, they argue that many packet-based cable operators permanently affix the MTA to the subscriber's home or building during installation.

Another point of contention for cable operators is the FCC's requirement that all VoIP operators provide E911 capabilities to customers by late November 2005. This aggressive time table has become a technical challenge for operators and some are appealing it, asking the FCC to clarify and reconsider the requirement.

At Net2Phone we are being proactive. We are constantly analyzing our industry in order to intercept potential problems before they affect our customers. We support the implementation of safety mechanisms that will keep VoIP users safe. We agree with the industry's strides toward developing solutions to those issues that are smart and practical.

As part of our commitment to providers, we often contact our operators to discuss new trends or upcoming regulations. Our July 25 seminar entitled "Solving the Regulatory Puzzle" was a big hit for operators who are sometimes overwhelmed by the complexity of our industry. Our legal experts take time to meet with our operators' legal teams to determine the best approaches to different situations, emphasizing that we're here to serve as a valuable resource.

As upcoming rulings are made on topics such as Communications Assistance for Law Enforcement Act (CALEA), the Universal Service Fund, Free World Dialup, Intercarrier Compensation, and the like, Net2Phone will continue to lead the way for operators to achieve and sustain compliance by keeping ahead of industry changes.

Product Spotlight:
VoiceLine Broadband Phone Service

We’re talking with David Span, SVP of product management, in charge of VoiceLine -- Net2Phone’s SIP-based replacement broadband telephony service.

Q: Is VoiceLine hard to use?
A: No, it’s simple. All a user needs is broadband access. They plug their cable modem into the phone adaptor, which acts as a router. Then, both their phone and computer plug into that adaptor. It’s user-installable, which can save money for cable operators.

Q: With VoiceLine, can users get all the features they’re used to, like call waiting and voicemail?
A: Absolutely. In fact, VoiceLine provides them all standard, including E911. Best of all, users can manage their account and even activate or deactivate features online. So, if you forgot to forward your calls when you leave for vacation, you can log on to our site and turn the feature on remotely.

Q: VoiceLine sounds great for end-users, but what about cable operators? What’s the benefit for them?
A: Net2Phone’s VoiceLine gives cable operators the opportunity to bring voice service to their cable customers, generating incremental revenue, reducing customer churn, and creating a positive client experience. In other words, fewer customers will leave because they’ll be able to get their voice, entertainment, and data service all from one provider. We call it the "Triple Play." End users love it because they get one streamlined bill and have just one point of customer service contact for everything.

Q: Why would a cable operator choose Net2Phone?
A: Net2Phone focuses on providing telephony to cable companies. We don’t focus on selling direct to consumer. That means we don’t compete with our operators, but rather we build tools and support features to help them run efficiently.

Q: Is VoiceLine expensive to roll out? And how long does it usually take?
A: The beauty of VoiceLine is that there’s not a huge capital investment to roll it out. Typically, standard deployment is between 90 and 120 days, which makes it quick to market.

Q: How hard is it for operators to integrate VoiceLine into their system?
A: Actually, Net2Phone makes it extremely easy for operators. Rather than spending a lot of time and money to become compatible with us, operators can link right into our system without changing their own at all.

Q: So Net2Phone sets operators up for success?
A: I think there are three things that make for success in this industry: First: an existing brand and customer base, which most operators have. Second: last-mile access to customers’ homes, which most operators also have. And third: solid telecomm experience, which Net2Phone has, along with a centralized platform that’s been in existence for over a decade. So, together we’re a great team.

What's Happening @ Net2Phone

Click here for a list of recent press releases and company announcements.

Click here for a list of upcoming trade shows and events where Net2Phone is scheduled to appear. At the bottom of the list is an online form for arranging a meeting with a Net2Phone representative.

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