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Article

Title: Cable Firms Woo Business in Fight for Telecom Turf

Author: Grant, Peter Article Type: Product Analysis
Source: Wall Street Journal, v249 n13 pA1(2) Publication Date: Jan 17, 2007
  ISSN: 0193-2241
URL of Publication: http://www.wsj.com

Cable operators are aggressively entering the business services market after having attracted more than eight million residential phone customers. Wall Street wants to know what the new growth engine for cable is, and some cable industry executives forecast billions of dollars of new revenue from support for business clients. The prediction of business client services was one factor that could have had influence in prompting a special committee of Cablevision Systems' board to reject an $8.9 billion privatization planning that was urged by the Dolan family, which controls Cablevision. Such cable operators of Cablevision and Time Warner have used networks first designed for transmission of TV signals to make big pushes into offerings of packaged phone, TV, and high-speed Internet service to small- and mid-sized businesses (SMBs). They often undercut local phone companies prices, and Comcast, the largest cable operator by number of subscribers, reports that offerings of services to SMBs will be its top new priority of 2007 and 2008. Analysts say cable is the first alternative to local phone service to emerge for SMBs after changes to telecommunication law. Telephone companies disagree with Comcast's CEO Brian Roberts that their services do not cater to the smaller company, but cable operators say they can charge less because phone companies have usually marked up their services for business customers more than for residential customers. As cable companies extend network further into business districts, they are repackaging phone and other cable services sold to households and customizing them for SMBs.

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Communications Convergence

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