HSA Adds IP Telephony to Offerings

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High Speed Access Corp. said it is adding telephony to the
turnkey cable services it offers to small and midsized operators.

The Denver-based company said the product -- using
Internet-protocol-telephony equipment from Clarent Corp. -- is already in limited field
trials with some 50 users in Saint Mary's City, Md., south of Washington, D.C.; La
Grange, Ga., southwest of Atlanta; and Monument, Colo., south of Denver.

After another two or more months of technical testing, the
company will bring other markets online in full commercial-service launches, HSA president
Ron Pitcock said.

"We're very bullish on it. It's a great
product, and we think it's going to be a great revenue stream," he said.
"This is a test of the equipment and the back office, the general concept of: Does it
fit our business model, can we bill it and can we deploy it?"

Much of the hubbub over telephony via cable -- especially
using packet-switched technology -- has centered on the initiatives of the biggest MSOs,
such as AT&T Broadband & Internet Services, Time Warner Cable and MediaOne Group
Inc.

But HSA believes the smaller systems it caters to represent
just as lucrative a market for long-distance and local calling services.

The company provides turnkey high-speed Internet access
over cable systems and, as of this month, it had about 1.8 million homes passed committed
by a variety of operators.

HSA could also get access to another 10.6 million potential
homes passed under agreements with Charter Communications Inc., the Road Runner
cable-online partnership, Classic Cable and Cable Management Associates.

Cable operators so far have not been clamoring for a
telephony component to HSA's product lineup, Pitcock said, but this could change they
realize the scope of the potential revenue stream.

"There's really no competition in these markets,
which creates opportunities for us to provide product in both residential and
commercial," he said. "Nobody's paying attention to these people."

The initial telephony product will be a dedicated
long-distance and international calling service using Clarent's gateway IP equipment
and "Clarent Command Center" intelligent-network-management software.

Callers connect over the existing local loop to the gateway
installed at the cable headend, which connects to the Internet for voice transmission.

Clarent's technology supports not only phone-to-phone
traffic, but also faxing and cable modem-to-phone transmissions. Like its Internet data
products, the setup is installed, operated, managed and marketed by HSA for the individual
cable operators.

Pitcock said the early deployments in Monument (which is
near the U.S. Air Force Academy and other military installations) and Saint Mary's
City (near the nation's capital and Patuxent Naval Air Station) were in areas of big
potential demand for long-distance and overseas calling.

Future plans call for HSA to offer local telephony, as well
as long distance, using its operators' cable plant and cable modems for connecting
customer phones to the Internet.

The company is evaluating equipment from several
manufacturers, such as Cisco Systems Inc. and Lucent Technologies, plus cable modems from
the major standards-based vendors, and it expects to begin field trials by sometime this
fall, Pitcock said.

"If you look at the big guys like AT&T and Sprint
[Communications Co.] that are going for a pure IP-telephony play, they know what the
future looks like, and we'll follow suit," he added.

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