Time Warner, Sprint breaking up

Time Warner Cable apparently understands cable telephony well enough to bring it in-house. For years the MSO has been a staunch supporter--and paid partner--with Sprint in the digital phone service business but that will come to an end, perhaps beginning as early as this year, as the MSO starts to handle things all by itself.

Craig Moffett, a research analyst with Bernstein Research, brought the break-up to light in a research note. A Time Warner spokesman confirmed it and said that the MSO will pull all digital phone operations in-house in a process that "will take several years to complete." A Sprint spokeswoman also conceded that the end is near but the final days shouldn't start until next year.

Moffett suggested that the whole thing will eventually cost Sprint about $250,000 annually as Time Warner's payments shrink to nothing and phone users, who never really knew they were on Sprint anyway, leave the Sprint network. As part of the agreement, Sprint carried long-distance traffic for Time Warner Cable residential customers and provided turnkey telephone services such as 911 services, relay systems and operator services.

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