I read a piece this morning that claimed that Comcast is going to kick butt all over the residential VoIP market, largely thanks to their HomePoint WiFi router/hub/base station/DECT phone. In an interview with TMC, Frost and Sullivan Analyst Mike Jude predicted that, unlike Verizon’s failed HUB project, Comcast is going to succeed because HomePoint “blends more easily into the residential communications fabric and has a capability invisible to what is already in use”. I am not sure what this invisible capability is, but it sure sounds cool.

While Mr. Jude is probably more informed on the matter than I am, I still have a hard time believing him, and here is why: Comcast is taking something that people no longer want- home phone service- and repackaging it in a slicker box. Let me give a personal example. I moved a couple weeks ago and needed to transfer my Comcast service. I was a Triple Play customer, and was under the (apparently false) impression that because I had bundled these services, I was somehow getting a good deal. However, in the process of transferring service, I discovered I was paying an outrageous $140 for the combination of standard cable, home phone and pretty decent Internet (let this be a lesson to watch your bill after the introductory sign-up offer expires). Because I, like 87% of Americans, own a cell phone, my first thought was “why do I even need a home phone?” Really all I want are TV and Internet. Now, this is where I could turn the blog into a rant about Comcast’s illogical pricing structure, or discuss the benefits of Direct TV for anyone who does not want to be held hostage by the NFL’s asinine television distribution rules, but I will stay on the topic of why Comcast will not succeed with its VoIP offering.

Comcast is treating home phone service like the free reading light you get when you purchase a Snuggie over the phone. “Hey! We’ll throw in this extra piece of junk to try to convince you that you are getting a great deal!”

But what Comcast isn’t counting on is that people will go elsewhere for their Internet and TV if they have to, and completely abandon the home phone in the process because it holds absolutely no value (did I mention 87% of Americans have cell phones?). At least the HUB looked like it could have done video calls. From what I can tell, HomePoint is just a combination of things Comcast customers already have. There are no additional features that are of any use. I am not sure why I would even want a phone to dock on my wireless router, but maybe if it included a Swiss Army knife it would be more appealing.

PC Magazine has reported that Comcast is facing allegations that it is favoring its own VoIP traffic over competitors, such as Vonage or Skype. On Sunday, the FCC submitted a letter to Comcast, inquiring about the cable provider’s network management practices.

Last week I blogged about Verizon planning to convert its home telephone service to all VoIP by 2012. Though Verizon has since denied having such plans, the latest news about Comcast sheds some light on an increasingly competitive space.  Telcos, cable companies and upstart VoIP providers are all competing for the same residential telephony nickle, driving down prices. Until now, cable companies like Comcast have been able to capture market share by bundling their phone service with television and Internet. However, if these allegations are true, it would seem to indicate that even they are feeling pressure from VoIP providers.

Furthermore, if Comcast is indeed prioritizing its own voice traffic, it could have sweeping implications for the entire industry. As the PC Magazine article explains so well, Comcast claims that its Digital Voiceoffering is a separate IP phone service, which is not subject to its network management techniques. This implies that they are providing a telephone service, which is subject to a completely different set of federal regulations. I am no legal expert, but I would imagine that if other providers are found to be acting in a similar manner, it could mean they would incur the same tax burdens as telcos, as well as be forced to comply with any other service or safety standards. This will certainly be a story to watch, as Comcast may have opened a can of worms that other cable companies wish would stay closed.

It was widely reported yesterday that Verizon will be transitioning its home phone service to all VoIP by 2016. This is great news for the industry and for developers of VoIP and IP video applications. It has been noted that Verizon is facing stiff competition from cable companies offering bundled TV, Internet and phone services, as well as from upstart VoIP providers such as Vonage.

Many have chosen to focus on the diminishing business for telcos (Verizon lost 3.7 million lines between Q3 2007 and Q3 2008) and their need to offer more competitive pricing. This is certainly the case, as the value of home phone service has dropped dramatically with the proliferation of mobile phones and the availability of VoIP. However, I prefer the slightly more hopeful angle that Andy Abramson takes as we look to the possibilities that this path opens up.

If Verizon’s only goal is to compete with Vonage by offering cheap home phone service, they might as well just give up now. No company benefits from that kind of race to the bottom. I personally derive almost no value from having a landline, and would get rid of mine if Comcast didn’t essentially force me to have one by making it more expensive for me to switch from my current ”triple play” package to a cable and Internet-only plan (the phone call in which this was explained to me was a lesson in poor customer service and could be a blog post in and of itself). However, by focusing on next-gen networks, Verizon will be able to provide additional cutting-edge services that go above and beyond what its competitors are offering. This will allow them to maintain a higher price point, while delivering services that people actually want. I know I would be much more likely to sign up for FiOS if they offered PC-based video calling, integrated VoIP and TV applications or a combined mobile and home service. Hopefully this is Verizon’s strategy, as it will benefit VoIP developers and consumers alike.