Verizon Spies Daylight Via Voice Over Internet

One more Bell is getting set to ring in the Internet calling age.

Wall Street sources say Verizon (VZ Quote - Cramer on VZ - Stock Picks) has been sharing some of its plans to unveil a voice over Internet protocol, or VoIP, calling strategy between now and April. The New York phone giant will join the other Bells -- Qwest (Q Quote - Cramer on Q - Stock Picks), BellSouth (BLS Quote - Cramer on BLS - Stock Picks) and SBC (SBC Quote - Cramer on SBC - Stock Picks) -- in offering phone service via the Net.

Verizon wouldn't disclose any details of the plan, but a company representative said the April time frame is consistent with comments President Larry Babbio made last month at an investment conference.

Verizon's latest venture, and the assorted plans of its Bell peers, comes in response to cheaper calling plans being rolled out by cable companies and so-called voice-over-Net upstarts. Big companies are paying increasing attention to this issue, as highlighted by Monday's linkup of Time Warner's (TWX Quote - Cramer on TWX - Stock Picks) cable unit with Sprint (FON Quote - Cramer on FON - Stock Picks) and MCI in a VoIP venture.

The Bells' shift highlights the big mainstream telcos' increasing focus on flexibility as the telecom industry continues to change. Stuck with stagnant revenue, these companies have recently turned to cost-cutting to maintain their profits.

But some observers say that the real upshot of the move is less technological than political. Stung by competitive setbacks, the Bells are finally striking pre-emptively -- by painting a painful picture for governments that find their own budgets stretched thin.

It seems that after years of revenue erosion compounded by the loss of customers to email and wireless services, the local phone giants aren't willing to watch another calling technology stomp on their turf without a fight. So this time, by joining their rivals in the VoIP revolution, the Bells look to be taking much of the battle to regulators.

On one side, you have the Bells facing competitors using VoIP technology, which is unregulated and not subject to an array of taxes and fees that apply to typical land-line calls. Meanwhile, on the federal and state side, you have lawmakers pushing for deregulation but not necessarily comfortable with the loss of proceeds from telco taxes and fees.

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