In recent years, cable companies have managed to switch more than eight million homes away from the nation's phone companies by offering cable-based local phone service. Now they're going after business clients in an attempt to accelerate their market share growth. According to an article in today's Wall Street Journal, there are billions of dollars of business waiting for cable providers in the business world, particularly in the small business segment. In 2005, industry analysts estimate that businesses with fewer than 500 employees spent more than $5.5 billion on cable phone services. By 2010, that number is expected to more than double. Part of the appeal for businesses is the ability to bundle both local phone and high-speed Internet. While most can do that now with their telco providers, they're often limited to the lower bandwidth of DSL connections, while the cable companies routinely offer download speeds of five or six megabytes per second.
One way the phone companies are fighting back is with fiber optic service, which both Verizon and AT&T have rolled out this year in selected markets. Eventually, fiber optic TV and Internet service will be available to about half the telco footprints bringing with them download speeds as high as 30 Mbps.
That should be plenty fast for businesses who need to handle heavy duty phone and Internet tasks, as well as watch reruns of The Office during breaks.
