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Phone Cos. Lose Broadband Subscribers For 1st Time

Stocks in this article: CMCSK T VZ

NEW YORK (AP) â¿¿ In an Aug. 13 story about broadband service, The Associated Press reported erroneously that the eight largest phone companies in the U.S. posted their first-ever loss of broadband subscribers in the second quarter of this year. They have collectively lost subscribers once before, in the second quarter of 2010. The loss then was 1,600 subscribers.

A corrected version of the story is below:

Phone cos. lose broadband subscribers

Phone companies lose substantial broadband subscribers for first time, as cable modems thrive

By PETER SVENSSON

AP Technology Writer

NEW YORK (AP) â¿¿ Phone companies are losing the high-speed Internet game. In the second quarter, the landline phone industry lost a substantial number of broadband subscribers for the first time, as cable companies continued to pile on new household and small business customers, thanks to the higher speeds they offer in most areas.

The flow of subscribers from phone companies to cable providers could lead to a de facto monopoly on broadband in many areas of the U.S., say industry watchers. That could mean a lack of choice and higher prices.

Phone lines, designed to carry conversations, and often decades old, are poorly suited to carry Internet signals compared with the heavily shielded cables that carry TV signals. That means cable companies find it much easier and cheaper to provide fast Internet service compared to the digital subscriber lines, or DSL, that phone companies provide in most areas.

Cable providers now offer download speeds of 100 megabits per second in many areas, about 20 times faster than DSL.

The country's largest Internet service provider is cable company Comcast Corp., with 18.7 million, followed by AT&T, with 16.4 million.

Verizon Communications Inc., the country's second-largest phone company, has replaced its phone lines with optical fiber in some areas, letting it compete on speed with cable. But expanding service is expensive, so Verizon has stopped adding new areas to its FiOS build-out.

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