Covad's new VoIP service aims to revitalize local phone competition: line-powered voice access emerges as facilities-based alternative

America's Network, Feb, 2005 by Al Senia

Covad Communications Group Inc. shook up the service provider space recently by launching a new VoIP telephone service that allows partners to offer local and long distance voice service to end-users in direct competition with local telephone carriers.

Trials of the new service are expected to begin this month. Covad intends to utilize DSLAM technology to deliver line-powered voice access to non-Bell telephone companies. Nokia and Zhone Technologies are providing the necessary voice cards and DSLAM technologies.

Trials will be conducted in Atlanta, Denver and San Jose, with full commercial service planned by the second half of this year.

CLEC ALTERNATIVE?

"Line-powered voice access will allow Covad to provide CLECs and their customers around the country a facilities-based alternative to the local phone companies' UNE-P platform for voice services," explained Covad CEO Charles Hoffman when the announcement was made.

Covad, a gutsy industry player that has spent the last two years restructuring itself as a wireless broadband player, was the subject of a Oct. 1, 2004 America's Network cover story in which company executives outlined some of their future business strategies.

Covad has been providing networks for service providers interested in delivering VoIP services to customers. But the latest move offering the ability to provide local telephone service adds an entirely different dimension to the battle for voice customers.

LOCAL EQUIPMENT EXEMPT

By using VoIP, Covad and its partners won't need to lease any local equipment from the four remaining Bell operating companies, except for the actual copper wire that links the central office to a customer's location. The DSLAMS and line cards enable line-powered voice access by taking the analog voice signal from a customer's phone and converting into a digital form at the Covad central office where the DSLAM is located.

The digital signal then travels over Covad's national network backbone and connects to any telephone on either a VoIP network or a PSTN network managed by the regional Bells.

Covad's service is especially timely because it comes just a few months after court and federal rulings essentially freed the Bells from having to lease their networks at a low cost to competitors like AT&T Corp., Sprint and MCI. The rulings caused many national carriers to abandon the local phone market to the Bells, setting the stage for price increases later this year. The local copper lines that Covad and its partners would use, however, were not affected by those rulings.

Covad believes its new service offers a true alternative for service providers interested in providing local phone service.

It's not yet clear how many are interested in the Covad product.