March 3, 2005 11:32 AM PST

Cable raises its voice

For 130 years, traditional telephone operators have been kings of the home phone castle. But watch out--Ma Cable is making herself heard.

As never before, cable providers, from the giants on down to small operators like Northland Cable TV, are winning the phone wars against local phone giants BellSouth, SBC Communications, Verizon Communications and Qwest Communications International, collectively known as the Bells.

Each week, cable operators are adding hundreds, thousands, even tens of thousands of new local phone subscribers, while significant numbers of the Bells' local phone customers cut their home phone lines.

The result is the "Revenge of the Cable Giants," as organizers of next week's Spring 2005 Voice on the Net Conference & Expo in San Jose, Calif., put it. Once given no chance in the phone business, cable operators are now at the tipping point of becoming a legitimate threat to topple the Bells.

News.context

What's new:
Internet telephony is helping cable companies become a significant challenge to local phone providers.

Bottom line:
Although the local giants still have many millions more customers, their numbers are slowly shrinking as the cable companies steadily rise. Look out, Baby Bells.

More stories on this VoIP

"It's now cable's show," said InfoTech Research analyst Warren Williams. "The cable operators' voice business is starting to blossom. They have everything to gain, while the Bells have to worry about the effects of price cuts or even (offering) their own VoIP services."

VoIP, short for voice over Internet Protocol, allows a phone to be plugged into a broadband data connection, sending calls mostly over the unregulated Internet--which keeps the service cheaper than traditional telephony. A number of companies sell just VoIP services, but lately, the cable companies have been adding the service and offering it to their millions of existing broadband customers.

To be sure, the Bells still dominate the home phone industry; each still has tens of millions of phone lines in service. There are about 3.5 million U.S. cable phone subscribers. But growth rates are heading in the opposite direction. The number of cable phone subscribers is skyrocketing, with Time Warner Cable reporting a 1,000 percent increase last year.

At the same time, homes served by traditional local phone lines are dwindling. Qwest, the smallest of the Bells, lost about 88,000 lines just in the last three months of 2004. As of Dec. 31, BellSouth had 21.4 million access lines in service, down 4.1 percent for the year.

Top-tier cable operators each add between 6,000 and 11,000 new phone subscribers per week; telephone revenue per operator is set to pass $1 billion this year; and subscriber rolls bulge at a rate of 1,000 percent a year. The Bells, on the other hand, each lost up to 5 percent

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4 comments

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Maybe if the bells provided cost-efficient service
I mean really!

79 bucks for unlimited long-distance?

I can get it for 29 from Comcast.

c-ya Verizon!!!
Posted by Lite Rocker (42 comments )
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The big big "IF"......
If the cable companies can prove themselves capable of doing a better job of providing telephone service. I say, more power to them....
Posted by Prndll (382 comments )
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DIE QWEST DIE
Qworst has to be the absolutely WORST telco in America. Anything that slays this monster is a very good thing. And if there are any Qworst reps reading, just go look for complaints regarding crappy EXTREMELY EXPENSIVE ISDN service in Aztec, New Mexico. THATS ME!

I'm taking the first trip off my pots line that becomes available, and I'm not going back.
Posted by (9 comments )
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what are these "complex financial arrangements" attorney fees, attorney fees, permits, trademarks, permits, copyrights, traderights, government, green energy is about as green as a dollar bill.. it costs more to license and trade mark a product than it does to make it. you can have your wind turbines, your solar cells, solar collectors, cow manure, you name it, but it's all geared to one thing - inconsistent, if the wind always blew you wouldn't need batteries, if the sun always shone you would wouldn't need batteries, guess what the sun always shines and you don't need light to collect it, you just need to change the collector which has already been done, and that's not the only one... bottom line there is no way the government nor big business is going to let that one slip by, there's just too much money in conventional fuels and your government doesn't really want you depend!!!
Posted by ta56ilwind (5 comments )
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