By Khali Henderson

EarthLink Inc. in early June announced it will offer a line-powered VoIP service on a trial basis in three markets beginning this fall. The service, powered by Covad, will enable the Atlanta-based ISP to offer voice services in apples-to-apples competition with the ILECs in those markets.

Earthlink is the first service provider to trial Covad’s line-powered voice access (LPVA) service since it was announced in January. Working together, the two companies in October will offer consumers in Dallas, San Francisco/San Jose and Seattle a bundled package including phone and high-speed Internet access services. Unlike other VoIP services that require an analog telephone adapter between the telephone and the modem, Covad’s LPVA enables voice and Internet using consumers’ existing phones, wiring and computer equipment. As such, EarthLink’s voice services will operate during a power outage, support enhanced 911 calling and offer custom calling features just like traditional phone services.

“We are very excited about this. We think it’s a real winning product,” says Steve Howe, Earthlink’s vice president of voice services. “You get one bill from Earthlink. You don’t have to deal with your phone company anymore. You get award-winning service and support and software, much faster DSL speed, and the price - we are not announcing specifics - but it will be extremely competitive with the current ILEC offering.”

LPVA is made possible by nextgeneration DSLAM technology that incorporates the ATA functionality. While traditional VoIP uses the high-frequency portion of the local loop, with LPVA the signal is converted from digital to analog within the DSLAM. “Once it becomes analog, we can use the base band portion of the loop,” explains Jeff Alquist, Covad’s vice president of product development. “That means you don’t need DSL to send the voice signal because it’s not a traditional IP packet, it’s an analog signal.”

That, says Alquist, means LPVA is not subject to the distance limitations of DSL and, thus, enables a larger service footprint. Additionally, it delivers power through the loop. “So, in the event of a power outage, you can still get dial tone, which is different than traditional voice over IP services wherein if the power goes out the ATA box on the premise doesn’t operate, so you can’t get dial tone,” he says.

Tying the physical address to the line also will aid LPVA providers in complying with new E911 rules announced by the FCC in May (see related story here). “This does support and enable E911 services,” says Alquist. “Our partners will need to bring that functionality to the table, but the architecture is built to support that. This is designed to be a complete replacement to traditional ILEC phone service.”

Calls will be delivered over Covad’s and EarthLink’s managed national networks rather than the public Internet.

“It brings the best of both worlds,” says Alquist. “It’s the old usage model of being able to plug in an analog phone into any phone jack, but with all the feature functionality of voice over IP.”

The DSLAM also enables higher-speed broadband access (or ADSL2+ and G.SHDSL), giving users accustomed to 1.5mbps speeds of 6mbps or 7mbps. LPVA also enables new business-class services, such as metro Ethernet and bonded T1. Covad has been evaluating equipment from Nokia, Samsung and Zhone, but declined to reveal which of the vendors’ wares were being used in the trial.

“It’s a new technology that we think is going to be terrific for consumers,” says Howe. “We are always on the lookout for new technologies that our customers would like to take advantage of. So, we just thought this was a terrific product for consumers, and we wanted to be a part of it.”

EarthLink is funding the trial through a prepayment for future Covad services. EarthLink will provide all sales and marketing support.

Howe says Earthlink has not set a timetable and declined to discuss criteria for evaluating the results of the market trials, but says the ISP will be monitoring its success and is hopeful it will be able to roll out to other markets.

He notes, however, Earthlink’s decision to provide the service is not entirely its own. “We will not be able to offer this service in areas where the state regulatory committees have decided they will set the price too high,” says Howe, noting that LPVA is based on Covad leasing UNE-Ls from the ILEC at rates set by the state utility commissions. “I would hope that once the state regulators see this terrific new form of competition, I would expect them to do the right thing by consumers and take the UNE-L rates and lower them.”

Earthlink says it is not presently lobbying state regulators for pricing concessions, and adds that since Covad is the reseller, it likely will do the heavy lifting. Covad spokesperson Pavel Radda says Covad “continually monitors state regulatory activities to ensure Covad’s interests are represented on all telecom rates and regulatory issues, including UNE-L, and we will continue to do so.”

Howe says Earthlink is committed to growing its voice business and expects to continue to offer its ATA-powered VoIP service, which is available nationwide, even in markets where LPVA is turned up. “Frankly, if I lived in these markets, I’d want to get the ADSL2+ offering, but if somebody wants it, they can get the ATAbased product,” he says.

The company also will be rolling out a free on-net softphone product called Vling at the end of June, Howe says. This will be packaged with the LPVA service, so that users have one account for both. A Web portal will provide a control dashboard for LPVA users to track calls, billing and enable features.

In addition to ISPs like Earthlink, Covad is targeting UNE-P CLECs as resellers of its LPVA product. In December 2004, federal regulators voted to phase out over a year rules governing wholesale access to the incumbent networks controlled by BellSouth Corp., Qwest Communications International Inc., SBC Communications Inc. and Verizon Communications Inc. The rules took effect in March and represent the demise of UNE-P, or the unbundled network element-platform. Local providers leasing the incumbent networks can no longer submit new orders under UNE-P. Competitors also are required to pay the regional Bells an additional $1 per line per month to support their existing residential customers under the old rules.

“We are in ongoing discussions with the UNE-P community out there on using this as a replacement or a migration path,” says Alquist.

Covad charges resellers an upfront setup charge and ongoing monthly recurring charges that Alquist says are comparable to its present access rates.

Alquist says LPVA will be rolled out in conjunction with its partners’ needs. “This is not something that Covad is going to go out and enable all 2,050 of our COs. Depending on partner desire and demand, we will build accordingly,” he says, adding the wholesaler is in conversations with other partners, but declined to name them.

“To be honest, we think this product is very disruptive and we think there will be a lot of demand for it. We don’t see getting partners to help us drive this into the market being a difficult thing to do.”