In Washington, D.C., for example, we have yet to see a cable modem offering in my neighborhood, but I am being overwhelmed by door hangers and bill inserts about Bell Atlantic s DSL service. The number of telephone company DSL subscribers is growing at a significantly faster rate than that for cable modem services, according to recent industry analyst reports. A recent press release by U.S. West and GTE s website both tout the advantages of DSL over cable modems. Ironically, the telephone companies only rush to make the necessary investment to bring DSL to a market, or to drop their DSL pricing to attractive levels, when the local cable operator brings in a cable modem Internet service. But the incumbent LECs are, not surprisingly, determined to slow cable down.
Video is a highly competitive market compared with local telephony.
But the ILECs still control all but a tiny sliver of the local telephony market. I am not saying that all cable operators welcome this video competition. But, whether they like it or not, competition is raining down on them from the skies. The same is true of competition for access to the Internet and other data services. Not only are the ILECs competing with cable, but also competitive LECs like RCN and Knology that bundle video, voice and Internet access, DirecPC and other satellite high-speed access services, and numerous terrestrial wireless competitors such as Teligent and CAI Wireless.