One could almost say it was SBC that gave rival Cox Communications its first leg-up into the telephone business — a decision that telco might now regret. In the early 1990s, the two companies were partners in Cable North West, a U.K.-based broadband cable telephony competitor that is now part of Telewest.

“We got so close to SBC, partnering with them in England,” said Patrick Esser, Cox CEO and a 27-year company veteran. “We got a good dose of what we had to do there — we were able to understand how a video network and a telephone network could come together. We brought that learning back to the U.S.”

With the 1996 Telecom Act, Cox decided to make its move into telephony in the U.S., becoming the first major cable player to do so. The company knew what was required, Esser said, and set out to create the network infrastructure and back-office systems required to deliver a high-quality telephone experience.

Ten years later, Cox may be showing up the teacher. This year, the company received the highest honors in J.D. Power and Associates' 2006 Residential All-Distance Telephony Customer Satisfaction Survey in the Northeast, Southwest and Western regions. It was the fourth straight year Cox topped the Western region polling, where it directly duels AT&T — formerly SBC — and Verizon, and the first year it has been included in the other two regions, where its telephone service is newer.

In the Western region, in fact, Cox ranked highest in all six categories for which J.D. Power measures — performance and reliability, customer service, company image, offerings and promotions, billing, and cost of service. In its two initial cable telephony markets, Cox is well-established as a provider. The company has 46% of the phone market in Orange County, Calif., where it competes against both AT&T and Verizon, and although it hasn't released subscriber numbers in Omaha, Neb., it didn't contest Qwest's contention before the FCC that Qwest is no longer the dominant phone company in Omaha and should be freed from regulation.

At year's end, Cox will have launched telephony in all 35 of its markets, with the potential to reach 9.2 million households. The company is also well ahead of its peers in offering commercial voice and data services, so much so that Cox Business Services grew its commercial base by 28% in the third quarter of 2006 and is on track to hit $1 billion in revenue by 2010.

So do customer satisfaction surveys and financial success make Cox the best phone company in the U.S.?

“I don't know that I would say that — as a new entrant you have something of a competitive advantage against an incumbent, particularly if you are entering what has been a monopoly market,” said Adi Kashoor, analyst with the Yankee Group. “But they are distinct from their cable peers, in the telephony market in particular. Not only did they start five years ahead of everybody else, but they made it work from the get-go, figuring out pricing, packaging and customer service — they made a big investment in the back office. Cox did a very good job.”

Elaine Smiles, director of cable marketing for Nortel Networks, which provided first TDM and then Internet telephony network gear for Cox, said that Cox's early success prompted the widespread movement of other cable companies into telephony.

“Their success was significant, and it showed a road map for other cable operators,” Smiles said. “They started sharing the positive impact of telephony service — the impact on churn reduction, the improvement in customer satisfaction. It was really Cox that led the way.”

And along that way, Cox stopped being a cable multiple systems operator, at least according to its CEO.

“We get called a cable company,” Esser said. “But we are a telecom company, both residential and commercially. We all look at ourselves that way. Video is an important part of our bundle and service offering. But if you look at a pie chart of where our revenues and contributions came from in 2000 and a pie chart of where they come from now — you wouldn't know it was the same company.”