Local telephone service providers will have national competition by the end of 2006, and possibly sooner, through a deal announced Aug. 25 by Mediacom and Sprint.

Mediacom, the country’s eighth-largest cable operator (and the only current cable provider in Princeton), and Sprint, a global communications provider, announced a multiyear agreement in which Mediacom will offer telephone service to virtually all of its markets, encompassing about 2.7 million homes in 23 states.

The plan involves Mediacom using its fiber-optic digital networks with Sprint’s telecommunications systems to add voice over Internet protocol (VOIP) technology to Mediacom’s current lineup of broadband products and services.

VOIP converts voice signals into data and sends it through the Internet, much like e-mail.

A high-speed Internet (broadband) connection is required. To place a call under a traditional VOIP setup, a caller picks up the phone and dials the number, using an adapter that connects to the caller’s existing broadband connection.

The call is then sent from the local telephone company to the VOIP provider (in this case, Mediacom/Sprint).

The phone call is transmitted through the Internet to the called party’s local telephone company to complete the call.

Callers can also use microphone headsets plugged into their computers and place their calls using their keyboards, with the calls routed through their cable modems.

The upside is that customers with broadband Internet connections could avoid the cost of a separate line just for phone calls.

Some Internet voice services don’t work during power outages, though.

Mediacom plans to launch the phone service to selected markets in the first half of 2005.

“This strategic alliance with Sprint will permit our company to offer our customers a powerful bundle of broadband products in one package, on one bill, from one provider and at a lower cost,” said Mediacom’s Chairman and CEO Rocco B. Commisso.

“Consumers switching to the Mediacom telephone service will be able to keep their existing phone numbers and directory listings, utilize the telephone equipment and wiring already in their homes, and receive more advanced features than traditional telephone service,” he said. “With this agreement in place, we also have the opportunity to explore offering Sprint wireless phone service to our customers.”

Sprint will assist Mediacom by delivering enhanced 911 emergency service (another problem area for standalone VOIP systems), local number portability, and operator and directory services.

Among other features, Mediacom is expected to provide caller ID, call waiting, call forwarding and voice mail.