NEW YORK (CNN/Money) - AT&T, which is moving away from providing traditional phone service to residential customers, is teaming with the nation's largest cable operators to offer phone service over the Internet, according to a published report.

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USA Today reported Thursday that AT&T is teaming with the nation's four largest cable operators, Comcast Corp., Time Warner Cable, Cox Communications and Charter Communications, as well as New York cable provider Mediacom, to offer what will be branded CallVantage Internet-phone service.

Together, the five cable operators have about 46 million customers, according to their most recent financial reports, or nearly two-thirds of homes in the nation with cable television service. But they have a relatively small percentage of their customers using them for phone service.

Under the agreement, AT&T will provide what is known as Voice over Internet protocol, or VOIP service. But it customers seeking to sign up for CallVantage will be referred to the appropriate cable partner to have them set up high-speed Internet access over cable lines. VOIP hooks phones into the broadband Internet lines rather than the traditional copper phone line.

AT&T sold its own cable operations to Comcast for $2.9 billion in a deal that closed in 2001. It announced last month that it would no longer make a marketing push to provide traditional long-distance and local phone service to residential customers, a move that is expected to result in its exit from that competitive business in the next few years.

The cable operators have all been pushing to rapidly expand their VOIP, which they see as a high-growth and high-margin part of their business.

Comcast, the nation's largest cable operator, announced it would make VOIP service available to all its service area by the end of 2005. AT&T VOIP service will to some degree compete with the cable company's own offerings in this area. But executives at the cable companies say the partnership with a competitor is worth it to get more of their traditional cable customers to use them for high-speed Internet service.

"It's a good thing for both of us," said Mark Harrad, a spokesman for Time Warner Cable, which like CNN/Money is a unit of Time Warner Inc.