Cable TV and Satellite TV News Archives

Cox Communication's President, Pat Esser, set a goal for the multisystem operator to offer its customers a minimum of 50 HD channels across all channels by the end of 2007, with planned expansion to 100 by the end of 2009.

To accomplish this high-definition programming roll-out, Cox is utilizing BigBand Networks and Switched Digital Video (SDV) technology in the Northern Virginia market, expecting to eventually expand this technology to additional systems in 2007.

SDV is unique in its capabilities. It allows cable operators to deliver more channels to its subscribers using the same amount of bandwidth, but instead of operating the same as other digital video technologies, SDV sends a specific channel to those who choose to view at that given time. This allows cable programmers such as Cox to offer numerous, additional channels on its customers' TVs without them knowing it. This system works primarily on the theory that not every single channel in an operator's subgroups will be watched simultaneously.

The SDV system should be available in the next 30 days, though Cox is remaining flexible on the type of top-box technology it plans to use to deliver SDV to its customers.

Time Warner Cable will begin offering Look Back in the fall of 2007, a new feature that allows its customers to watch, record, rewind and fast forward their favorite shows at no cost.

Unlike DVR services, Look Back and its sister feature Start Over do not allow consumers to fast forward through commercials, and do not provide a library to store viewed content. But without the hassle of equipment set up, and the convenience and ease of recording a plethora of shows without the viewer having to set reminders, both of these features deliver unique interactive experiences. With Look Back, a Time Warner customer can view certain TV shows later in the day that they air, anytime prior to midnight.

"Many customers do fast-forward through commercials when given the choice, and that is an obvious and undeniable benefit of a digital video recorder," said Peter Stern, executive vice president for new product development at Time Warner Cable. "But the digital video recorder is principally about enabling customers to watch what they want, when they want. It returns control to customers over the television schedule."

Start Over delivers a similar user-friendly, free service to Time Warner customers, and began its test launch in South Carolina in 2005. Operating with more than 100 channels, Start Over automatically creates temporary recordings. If a customer switches to one of these stations in the middle of a show, he or she is able to view it from the beginning. A half-hour show, for instance, can be viewed anytime within 30 minutes of when it started.

Both features function as a basic DVR, but unlike Tivo and other similar technologies, Time Warner is offering both Look Back and Start Over without any monthly obligation or fee. In addition to South Carolina, Start Over is currently available in San Antonio, TX; Greensboro, NC and Rochester, NY, with plans for continued expansion in 2007 and 2008.

Comcast recently celebrated the official grand opening of the company's second call center in Connecticut. By the end of the year, the new 77,000 square foot facility will employ more than 200 customer care representatives, who Comcast says will help meet the growing customer demand for Comcast's cable television, high-speed Internet and phone products.

"We are thrilled that Comcast made the business decision to invest in our state and create over 200 jobs in the process. This new facility underscores the fact that Connecticut is open to business and has the talented workforce to fuel business growth," said Governor M. Jodi Rell, who attended the grand opening ceremony with other state and local officials. "Comcast is a valued member of Connecticut's business community, and their expanded presence in our state will have a positive impact on the local and state economies."

Doug Guthrie, Vice President for Comcast's Connecticut-Western Massachusetts Region, thanked Governor Rell, the Town of Enfield and other state and local officials for their support. Guthrie noted that between the two call centers and 14 service centers located throughout the state, Comcast employs more than 1,100 individuals in Connecticut. He said that the new facility gives Comcast the capacity to add up to approximately 350 positions in the next few years as it continues to grow its business. In addition to the two Connecticut call centers, Comcast operates six other call centers in New England.

"Governor Rell and the Department of Economic and Community Development have been instrumental in Comcast's efforts to expand our operations in the state of Connecticut as we strive to meet the strong customer demand for our innovative products and services," said Guthrie. "Comcast's recipe for success starts with delivering a top-notch customer experience, and that includes locating our call centers in and around communities where our customers live and work."

Prior to the transition to Comcast, Adelphia/Tele-Media customer calls were entirely outsourced to other parts of the country, a trend that Comcast says it has reversed to ensure better service.

Guthrie added that the opening of the new call center coincides with the completed launch of Comcast Digital Voice, the company's residential phone service, which is offered in every Connecticut community in which Comcast provides service, including those previously served by Adelphia/Tele-Media. With phone service offered throughout the state, Comcast says the company's Triple Play bundle of digital cable with ON DEMAND, Comcast high-speed Internet and Comcast Digital Voice will also be available to customers throughout the company's footprint.

For more information on the call center, check out the Comcast press release.

Houston just got a little more Comcastic! Customers throughout Greater Houston will now have a new service provider as Time Warner Cable officially became Comcast today. The transition, affecting more than 750,000 Houston-area cable TV, high-speed Internet and digital phone customers, follows the dissolution of a joint venture between the companies earlier this year.

To mark the switch, Comcast says it will enhance the channel lineup in the City of Houston and the 62 surrounding communities it now serves by launching nearly 20 new channels, including the NFL Network and five High-Definition (HD) networks. Houstonians have already started to notice the branded Comcast trucks, signs and employee uniforms that have been popping up in the service area, which stretches from Galveston to the Woodlands and from Baytown to Katy.

The transition sets the stage for the rollout of Comcast's broadband video, high-speed Internet and phone products, thanks to an investment of more than $200 million in the area this year.

"The transition from Time Warner Cable to Comcast is more than just a change in name on a technician's uniform, on a truck or on a building," said Tony Speller, senior vice president of the Houston region. "It represents a true commitment to innovative products, a focus on improving our customers' experience and an ongoing dedication to the communities where our customers and our 2,700 employees live and work. We will work hard each day to earn the trust and satisfaction of our newest customers."

For more information on the transition, check out the Comcast press release.

Comcast Corporation recently announced that Comcast will purchase from Cablevision's programming subsidiary, Rainbow Media Holdings LLC, its 60 percent interest in FSN Bay Area and its 50 percent interest in FSN New England for $570 million in cash.

Upon completion of the FSN transactions, Comcast will own 100 percent of FSN New England and 60 percent of FSN Bay Area, with the remaining 40 percent still owned by an affiliate of News Corporation. Comcast will operate both networks and completion of these two transactions is subject to certain closing conditions.

For Comcast, the transactions add to its growing regional sports programming operations. The sale of FSN Bay Area and FSN New England allows a divestiture by Cablevision of its only remaining regional sports programming assets located outside of the New York market.

"FSN Bay Area and New England are excellent operating businesses and fit strategically into Comcast's portfolio of sports networks. By growing RSNs in markets where Comcast has existing operations, we have a unique opportunity to reinforce our brand image and capitalize on our local presence," said Jeff Shell, President of Comcast Programming Group.

"We have been honored to have operated FSN New England and FSN Bay Area since their inception and are confident that Comcast will only build on our record of excellence for sports viewers in these two important markets," said Josh Sapan, President and Chief Executive Officer of Rainbow Media Holdings.

For more information, check out the Comcast press release.

As part of its continued growth in the Washington, D.C. area, RCN recently added another sponsorship to its roster. In addition to the company's agreement with the Patriot Center in Fairfax, Virginia, RCN recently announced that it has signed a two-year partnership with Kettler Capitals Iceplex, official training center of the Washington Capitals, has signed a two-year partnership to provide cable services for the team's new headquarters in Arlington, Virginia. RCN is one of the first official sponsors of the recently opened $43.7 million Iceplex.

Home of the Washington Capitals' front offices, team practice rink and training facilities, Kettler Capitals Iceplex is an indoor ice-skating complex that features two NHL regulation-sized rinks with seating for 1,200 and building occupancy of 2,100. Combined, the two rinks offer the public 12,000 hours of ice time annually. In addition to the Capitals, other user groups include Washington Jr. Capitals, Washington Jr. Nationals, Washington Little Capitals and Georgetown University, as well as local adult, college, high school and youth hockey teams.

"Kettler Capitals Iceplex is a state-of-the-art facility that deserves only the best in technology," said Washington Capitals Chairman and Majority Owner Ted Leonsis. "RCN adds cable services and a level of sponsorship that will add to the quality of the building for the community, players, coaches, fans and staff. We are excited to have RCN onboard as a new partner and look forward to the services and technology that they add to our facility."

As part of the deal, RCN will become the exclusive Official Cable Provider to the Kettler Capitals Iceplex, which includes a range of on-site branding opportunities including Web site, TVs, dasherboards, ice-resurfacing machine and in-ice recognition.

"We are proud to have been the first to offer the triple play of video, high-speed data and voice, so we are very excited to now bring a viable, competitive choice to businesses in Arlington County," said RCN President and CEO Peter Aquino. "The Kettler Capitals Iceplex is a very remarkable facility, and we look forward to meeting its cable needs and to the marketing opportunities that this deal provides for us."

According to RCN Senior Vice President, Strategic & External Affairs Richard Ramlall, the company's growing affiliation with local sports teams reflects its determination to have a positive presence in the community.

"Our company was formerly known as Starpower in the Washington, D.C. metropolitan area. With this new partnership, RCN's star power continues to grow," Ramlall said. "In addition to the Kettler Capitals Iceplex, our partnerships allow us to showcase RCN at D.C. United soccer games, Georgetown basketball games and at more than 140 Patriot Center concerts, community events and George Mason basketball games."

Under the terms of the agreement, RCN will provide cable video services for the Kettler Capitals Iceplex. This contract is the first since RCN created a new business unit to focus solely on serving small to medium-sized businesses.

"Our focus is on taking the time to understand the communications needs of each small business we serve. We do that with knowledgeable sales people and experienced customer care teams who are armed with service selections that make sense," said RCN Small Business Vice President John Baker. "In addition to a variety of phone rate plans for example, we offer data speeds up to 20Mbps, while DSL taps out at only 7Mbps and Comcast at 8Mbps."

Baker explained that RCN's focus is good news for small and medium-sized businesses looking for vendor choice. "We realize that choosing the right provider for phone, high-speed Internet and cable TV is critical for small business and we take pride in delivering the services and support our customers can rely on."

For more information, check out the RCN press release.

Cox Television announced recently that it has selected Harris Corporation's OSi-Traffic™ application to manage the traffic, sales, accounting and reporting components of its business. Cox Television owns and operates 15 television stations and one cable news channel, and is a subsidiary of Cox Enterprises, one of the nation's leading media companies.

A longstanding Harris customer, Cox TV will be able to use OSi Traffic™ to seamlessly integrate other Harris products across multiple business lines. For example, Cox can integrate its Harris® ADC™ Playout Automation solution with OSi-Traffic applications. The tight integration between traffic and automation allows Cox to increase revenue by controlling inventory utilization selling, and optimizing available spots closer to airtime.

The relationship between OSi-Traffic™ and Harris applications like Medialine and Repline also creates integrated local and national sales tools for Cox Television. As one of the top national television advertising sales firms, this integration helps Cox Television develop efficient conduits between stations and agencies—increasing efficiency and decreasing errors.

"The team at Cox feels with OSi-Traffic, we're moving to a provider who understands the demands of the television business today and into the future with an emphasis on greater speed and access to information," said Bruce Baker, executive vice president, Cox Television. "The synergy of Harris systems with our stations is unique and gives us confidence that we'll not only operate better, but also more efficiently—all with a focus on better serving our viewing and advertising customers."

Harris also provides Cox with an organized migration path from its previous Harris® BMS traffic system, giving the company an uninterrupted view of historical data. Cox Television will enjoy a smooth and integrated transition process to an economical and efficient centralized traffic system. The centralized architecture also enables Cox to track broadcast revenue streams from disparate locations.

AT&T recently announced that Frost & Sullivan selected AT&T Homezone(SM) service as the 2007 North American Consumer Communication Services Product of the Year.

The Frost & Sullivan Award for Product of the Year recognizes the company that has demonstrated excellence in new products and technologies within its industry. In selecting AT&T for this award, Frost & Sullivan noted, "AT&T has incorporated a coherent product strategy to retain its competitive position in the consumer services space and to provide customers with an integrated home-entertainment experience."

"AT&T's Homezone services builds on the company's reputation as a reliable network provider and a consumer services innovator," said Jeff Weber, vice president, AT&T Product and Strategy. "This award from Frost & Sullivan recognizes the original thinking and careful planning that went into bringing this service to market and that our mission to connect with customers via the three screens they value most—the TV, the PC and the wireless phone—is working."

With AT&T Homezone services, the company became the first national telecommunications provider to offer seamlessly integrated video content and TV entertainment to the "digital living room," through both broadband and traditional satellite networks via a single set-top device.

AT&T Homezone integrates AT&T Yahoo!(R) High-Speed Internet, AT&T | DISH Network satellite television and AT&T Home Networking services. It features digital videorecording, movies on demand, photo and music sharing, storage for both, and remote Web-based access to the system. It will soon also include remote access to the system through wireless devices. The service is available across most of the company's traditional broadband footprint.

"With its Homezone service, AT&T has demonstrated a commitment to delivering consistent growth in the future as it has in the past," said Piyush Arora, Frost & Sullivan analyst. "This service builds on AT&T's existing infrastructure and video delivery strategy to combine satellite TV programming with new levels of integration and on-demand content via broadband. It's a real homerun for consumers and AT&T."

For more information, check out the AT&T press release.

AT&T Inc. and A&E Television Networks today announced a comprehensive multiyear distribution agreement to deliver AETN linear, High Definition (HD) and on-demand programming as part of the AT&T U-verse^SM TV channel lineup.

Under the agreement, AT&T will deliver the following AETN brands to AT&T U-verse customers: A&E Network, The History Channel, The History Channel En Español, The Biography Channel, History International, Crime & Investigation Network and The Military History Channel. AT&T U-verse will also carry A&E Network in HD. The AT&T U-verse video-on-demand (VOD) library will also feature several hours of AETN VOD popular programming each month, including "Dog The Bounty Hunter" and "Intervention" from A&E and "Digging for the Truth" and "Dogfights" from The History Channel.

"AT&T is thrilled to bring AETN's exceptional entertainment and educational programming to our U-verse channel lineup," said Dan York, head of programming, AT&T Operations, Inc. "Customers will experience history and connect with the some of the world's most fascinating people through AETN's compelling programming."

"AETN is pleased to deliver its entire portfolio of high-quality programming over AT&T's advanced video platform," said David Zagin, executive vice president, distribution, AETN. "By adding our innovative and widely viewed networks, including HD and VOD, AT&T is giving its U-verse customers access to some of today's most desirable content."

You can read more in this AT&T press release.

Start-up airline Virgin America recently announced that EchoStar Communications Corporation will be the airline's primary live in-flight satellite entertainment partner. Pending government approval, the airline hopes to introduce domestic U.S. service in Spring 2007.

The agreement will provide Virgin America's guests with an variety of EchoStar's DISH Network satellite TV programming. In addition to live DISH Network satellite TV, the airline will offer customers 'pay-per-view' movies, audio music entertainment that includes the ability to compile individual audio playlists, a selection of popular electronic games, and even meals on-demand.

"Once the Department of Transportation says we can fly, we'll be ready to offer our guests an incredible entertainment experience and DISH Network is a major component of that," said Charles Ogilvie, Virgin America's Director of Inflight Entertainment & Partnerships. "Our interactive entertainment system is more than just a channel line-up in which our guests will immerse themselves. We believe they'll find it to be an exciting, customer-friendly experience overall."

"We are delighted to be part of this innovative airborne entertainment offering," said Charlie Ergen, Chairman and CEO of EchoStar's DISH Network. "DISH Network is focused on securing and delivering exciting, timely and appealing content to Virgin America guests as well as our 13 million-plus subscribers throughout the United States."

For more information on the new partnership, check out the press release Virgin America to Offer EchoStar's DISH Network at Every Seat on Every Flight.

Contemplating life without my TiVo is a scary prospect but the Yankee Group says that might just happen in the near future. The technology research and consulting firm recently announced that their research shows that the standalone DVR product category will cease to exist by 2010, and its dissolution will result in the end of TiVo as we know it.

According to the Yankee Group Report, Technology on Fast Forward: 2006 to 2011 US DVR Forecast, even as DVR growth accelerates, TiVo will struggle to remain relevant in the market. They conclude that TiVo will begin to shed subscribers during the forecast period while service providers will continue to capitalize on the emerging technology and no entry cost hardware to incrementally up-sell subscribers to new services.

"The five year outlook for the DVR in the home is one of unmitigated growth and opportunity. As new technology emerges, it is important that advertisers, service providers and broadcasters remember that taking away [consumer's] ability to skip commercials is not an option," said Joshua Martin, Yankee Group, Consumer analyst. "The answer lies in innovation and evolution to reach the mass and niche markets moving forward because the era of the 30-second spot is fading away for all age groups and demographics."

During the forecast period, DVRs will become commoditized, resulting in the end of TiVo. However, according to Martin, "TiVo has incredible brand value that resonates with customers and it will be an asset to any service provider, increasing the likelihood of an acquisition."

For more information, check out the press release.

According to a new Nickelodeon research study titled "The Digital Family," families today rely on modern technology to function more than ever before, rendering former household staples such as road maps and dictionaries obsolete, as well as reducing the importance of spelling skills. Key findings of the study also indicated that kids and parents place a higher premium on "downtime," and that TV has become their medium of choice to relax. And, contrary to popular belief, parents are embracing technologies just as much as kids, and view cell phones as essential part of managing their lives, while also providing kids more freedom.

"The Digital Family" research incorporates findings from Nickelodeon's "Living in a Digital World" research project (2006), which explores technologies including: the Internet, television, cell phones, mp3 players and more. "The Digital Family" offers insights from kids 8-14 and parents of kids 0-14, and references several findings from Nickelodeon commissioned studies (Multicultural Kids Study 2006 and Nickelodeon Wireless Study 2006).

"In today's modern family, parents and kids identify technology as a homework helper, virtual babysitter, time-keeper and a center piece of a lot of family time," said Cyma Zarghami, President of Nickelodeon and the MTVN Kids and Family Group. "We found that technology has brought the need for new skills while seemingly lessening the need for others. What is very apparent is the critical role technology is playing in helping modern families functions."

The survey found that tech devices like computers and the Internet have become essential tools in daily living, making kids and parents much more productive and self sufficient. In some instances, the Internet has almost become part of the family. More than half of parents (59 percent) strongly agree that it helps them get things done and 68 percent surveyed believe it makes them more efficient and self sufficient.  As one parent from the study said, "I just didn't realize how much the internet was part of my family."

The majority of kids said the Internet helps them do better in school (85 percent) and helped them learn things (93 percent). Kids also said they believed it helps them to be more creative and makes them feel like they've accomplished something.

Verizon announced earlier this month that it will launch local television channels in selected markets in 2007, starting with the Washington, D.C., metropolitan area in the first quarter.

Michelle Webb, a former ABC News producer, will produce and manage the project. The announcements were made at the Consumer Electronics Show in Las Vegas. Verizon will offer the local channels, to be called FiOS1, on its Verizon FiOS TV service.

FiOS1 will include round-the-clock traffic and weather, local news and community sports. Verizon will partner with professional news organizations to deliver some of the content. It will also televise original features shot and produced by citizen journalists using high-definition camcorders and provide a platform for local user-generated content. Verizon says it plans to announce more details as the launch date approaches.

Webb joined Verizon last spring as executive producer and general manager, FiOS1 local channels. Prior to her current position, she served for four years as a producer of the ABC News program "Primetime Live," where she did preproduction planning, research and storyline development for features and segments presented on the network's television-magazine shows.

Cox Communications recently announced that it has added ESPN2 HD to its high-definition cable lineup. This high-definition simulcast of the ESPN2 will be now be available on all Cox systems. As part of the new programming agreement, more than 1 million Cox customers will also now have access to ESPNU, a 24-hour sports network that features programming focused on college sports, including approximately 300 live events each year.

In most markets, Cox also carries HBO HD, Showtime HD, Discovery HD Theater, INHD, MHD, ESPN HD, Universal HD and local channels in high definition. ESPN 2 HD has been available for more than a year on other satellite and cable services.

For more information, check out the article Cox Boosts Availability of ESPN2 HD, ESPNU.

SCI FI Channel recently announced that it has partnered with DIRECTV for a comprehensive sponsorship package that will give DIRECTV a presence everywhere Battlestar Galactica is available. The first deal of its kind for the Channel, this "360-degree" cross-platform partnership will put DIRECTV alongside SCI FI's most critically-acclaimed series on-air, online and in print.

DIRECTV will sponsor every episode of SCI FI's hit original series Battlestar Galactica including yesterday's mid-season premiere with on-air ads and through a customized promo highlighting the satellite provider as well as online throughout the SCIFI.COM site. In addition to being represented in the Battlestar Galactica iTunes page, Ronald D. Moore's podcasts, David Eick's blogs and in the Webisodes page, they will be a sponsor of Battlestar's weekly episodic recaps on SCI FI's 'Pulse' broadband channel via DIRECTV. SCIFI.COM will also house a sweepstakes for a chance to win a flat screen television and a year's subscription to the satellite service. In print, there will be a customized DIRECTV ad prominently featured in SCI FI Magazine. DIRECTV will also sponsor the SMS mobile alerts sent by the Channel to Battlestar viewers with updates on upcoming episodes and have a presence in Battlestar Galactica's upcoming third season home video release.

Mark Miller, Senior Vice President of Sales for the SCI FI Channel notes, "The partnership between Battlestar Galactica and DIRECTV is an exciting opportunity for both brands. With one of the most active and engaged audiences in television, SCI FI viewers are constantly looking for new ways to connect with the brand, and DIRECTV is taking advantage of the power of the SCI FI audience."

"We are constantly on the lookout for media partners that are forward looking and willing to integrate our messaging across all their platforms," added Jon Gieselman, DIRECTV Senior Vice President of Advertising and Public Relations. "There is nothing better than enjoying Battlestar Galactica with the best picture on TV, except later this year when we rule the airwaves with 100 channels in HD."

Last week, CBS Research revealed new data showing that as the public at large becomes more connected to digital media, the more engaged they become in primetime television programming. Additionally, as more TV viewers become aware of the 2009 deadline for broadcasters to switch to full digital transmissions, the likelihood of them investing in new digital TV sets increases by 40 percent.

Those are just two of the major findings revealed today by a comprehensive study CBS Research has conducted examining consumers' attitudes towards digital media, and the role television will play in the near future. The project was led by David F. Poltrack, Chief Research Officer, CBS Corporation, President of CBS Vision.

Researchers found that 56 percent of those surveyed were aware that you could watch network television programs by streaming them over the Internet. Of those aware of this streaming option, 46 percent have already streamed at least one program. Of those not aware of this streaming option, when told which programs were available for streaming, 62 percent selected at least one of the 33 available programs that they probably would watch via streaming over the in the future. Analysts say it is clear that the potential for network program distribution over the Internet is just beginning to be tapped.

In addition, the research shows that people are gradually moving up to higher levels of connectivity. The segment of the population with both a broadband and a digital television connection at home has grown from 22 percent in the fall of 2005 to more than 30 percent in the fall of 2006. The same segment is most likely to watch the top broadcast network programs. In addition, this segment visits network television web sites and is increasingly likely to stream clips and full episodes of network television programs on the  Internet. Members of this upscale, better-educated "fully connected" segment are today the most engaged with the popular network programs.

"This data clearly show a correlation between connectivity and primetime television viewing," said Poltrack. "Consumers who embrace the new media are the heaviest viewers of the top network primetime programs, and this sector of the audience is growing. By offering them new ways to connect to their favorite shows- whether it's Web sites, podcasts, ringtones or other mobile features- we've been able to deepen the bond these fully connected viewers have with our programming. The research also illustrates that as viewers learn about the 2009 deadline for digital transmissions their attitudes towards investing in technology, like advanced home entertainment centers, to watch their favorite shows, changes radically. These findings really demonstrate the potential the broadcast networks have to further engage the public with our content as new technology expands our distribution options."

To read more about this new research, check out the CBS press release.

Knology announced recently that it will pay $255 million to buy PrairieWave Communications, a voice, video and high-speed Internet broadband services provider in South Dakota.

Operating in South Dakota and in portions of Minnesota and Iowa, PrairieWave has more than 56,000 residential and 7,100 business customers, with most in areas around Sioux Falls and Rapid City, South Dakota.

"PrairieWave is a highly successful, customer-focused business that will expand Knology's footprint by adding meaningful scale to our existing operations," said Rodger L. Johnson, president and CEO of Knology. "PrairieWave has achieved excellent bundled penetration and attractive EBITDA and free cash flow margins, and we believe this acquisition will complement our continued focus on organic growth in the existing Knology markets."

For more information, check out the Black Hills Pioneer article PrairieWave Communications announces merger with Knology Inc..

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