Net2Phone and Liberty Cablevision Sign Agreement to Launch Phase II of Cable Telephony Pilot

Business Wire, Dec 9, 2002

Business Editors

NEWARK, N.J.--(BUSINESS WIRE)--Dec. 9, 2002

Service highlights include Class 5 features and flexible billing

plans

Net2Phone, Inc. (Nasdaq: NTOP), the leading provider of Voice over IP (VoIP) services, and Liberty Cablevision of Puerto Rico today launched Phase II of their fully managed end-to-end IP telephony service over Liberty Cablevision's HFC cable network.

The local and long distance residential VoIP phone service will be made available to as many as 4,000 Liberty Cablevision subscribers and offers traditional phone service features and applications such as call waiting, caller ID, and directory assistance among others. Regulatory features such as emergency 911 service and CALEA will be tested and deployed in stages during Phase II, which will be available in December 2002 and is scheduled to run through summer 2003.

Liberty Cablevision customers will have the flexibly to select between two billing plans: a variable per minute 'Every Day' plan or a flat monthly rate 'Celebrity' plan. Both options include all available features, as well as unlimited local calling. The 'Celebrity' plan also includes four hours of long distance calling anywhere in Puerto Rico or the US, while 'Every Day' plan customers will be billed a competitive per minute rate for their long distance calling. The offerings will provide key insights into local and long distance residential telephony usage behavior while offering customers a compelling alternative and savings of up to 25% over their current telephone service.

"We are very excited about the launch of the second phase of this proof of concept, as it further validates the viability of the Net2Phone solution, as well as commencing the paid subscriber service. For years, industry experts have been espousing the potential of cable telephony, at Net2Phone we see this as another step towards its proliferation," said Stephen Greenberg, Chief Executive Officer of Net2Phone.

"Liberty Cablevision is pleased to expand our pilot project with Net2Phone," said Jose Alegria, General Manager of Liberty Cablevision Puerto Rico. "The unique benefits of cable telephony are apparent. VoIP, versus the traditional circuit switched cable telephony, is enabling us to provide our customers with a compelling new value-added service on a cost efficient basis."

Calls are routed directly from a cable subscriber's existing telephone plugged into a cable modem with embedded multimedia terminal adapter (eMTA), over the cable Hybrid Fiber Coax (HFC) network to Motorola's cable modem termination system (CMTS). The call is then routed to the Net2Phone managed IP network, which rates, manages, provisions, and bills the call and routes it over a managed IP network to the closest gateway to the recipient before the call is transferred to the public switched telephone network (PSTN).

The end-to-end PacketCable switching solution utilizes Net2Phone's real-time service and network management suite, Cable Voice Operations Support System (CVOSS), which is a fully automated VoIP management suite that incorporates monitoring, diagnosing and troubleshooting elements across the local cable HFC network, Net2Phone's global IP network and the PSTN. The sophisticated CVOSS monitoring system enables the MSO to proactively monitor real-time views of each network segment to identify, diagnose and resolve the root cause of problems before callers become aware of them. Net2Phone also provides 24x7 network operations, technical support and local and long distance bilateral interconnect agreements. The CVOSS and Packet Cable switching platform provides the real-time service assurance necessary to enable the Quality-of-Service (QoS) required to deliver toll-quality voice services to residential and business customers throughout the local HFC network.

Until now, cable telephony services have deployed a hybrid PSTN/IP solution requiring them to allocate fixed, static bandwidth and utilize legacy Class 5E switches and infrastructure to route calls over the cable access network resulting in higher CapEx and operating expenses. Net2Phone's cable voice platform permits cable operators to deploy telephony services easily via a fully outsourced solution, thereby enabling them to offer quality telephony services to their customers, reduce churn, generate incremental revenue and keep CapEx and operating expenses at a minimum.

The cable operator maintains ownership of the customer, service brand, and Tier I customer and technical support, while Net2Phone supports the back office platform, switching and transport, ongoing operations and Tier II technical support to deliver a fully managed QoS IP solution. Net2Phone tracks and monitors voice quality and network performance metrics from start to finish and provides cable operators with a full view into telephone calls routed over their network. Consumers benefit from savings over their current phone service, in addition to receiving a unified bill, aggregating cable TV, high-speed Internet access and telephone services.