AOL: We've Got VOIP

SAN JOSE, Calif. -- Voice on the Net Conference -- The VOIP business got a few steps closer to mainstream today as Time Warner Inc. (NYSE: TWX) CEO Jonathan Miller confirming Light Reading's earlier reports that his company's AOL division would roll out a consumer VOIP application as part of its popular Internet services bundle (see AOL Ambles Into VOIP).

"I am here to announce that within the next month, AOL will launch an Internet phone product, and we believe it will be a truly differentiated product," Miller said. "The initial launch targets specific markets and AOL users."

Actually, the launch date is March 16, according to Light Reading sources (see AOL Marches Toward VOIP Rollout). "Consumers just want something that is reliable and easy to use," said Miller. "Over 60 percent of consumers don’t know what VOIP is or don’t understand what it is, but it is possible they could be sold on it." (See What's VOIP?)

Miller says the VOIP service will be closely integrated with AOL's popular email and IM service to create a sort of "communications dashboard."

"It will become the centerpiece of the way consumers handle their communications online."

Miller says IM sessions naturally turn into phone calls when one of the parties enters the phrase "Can I Call?" At that point, Miller says, the AOL product will "almost instantaneously" switch the communications session to a VOIP call if the user on the other end is "present."

The product is similar on some levels to Microsoft Corp.'s (Nasdaq: MSFT) newly announced Istanbul product and Nortel Networks Ltd.'s (NYSE/Toronto: NT) MCS product, both of which are being demonstrated here.

AOL's venture into the VOIP market will not be undertaken alone. Miller announced a formal partnership with Level 3 Communications Inc. (Nasdaq: LVLT), which will provide the infrastructure needed to comply with federal 911 and number portability requirements; and Sonus Networks Inc. (Nasdaq: SONS), which will provide the softswitching.

Miller also announced a renewed agreement with Time Warner Cable, but was not specific about the cable company's exact role in the rollout of VOIP service.

"So, we think this is the right time for AOL to enter the market. We think we can help in the mass market adoption of VOIP generally, and we are wide-eyed about what it takes to do that, Miller said.

Miller ended with a little humility. Just a little.

"However, we are still very mindful there is a lot we don't know; there are a lot of hurdles and unanswered questions. But we think we can get a good start by leveraging the strengths we traditionally have as a company."

— Mark Sullivan, Reporter, Light Reading

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