WSJ: How Phone Firms Lost to Cable

A front page story in The Wall Street Journal analyzes why cable modems have captured nearly 70% of the US consumer broadband market, an early lead so wide that DSL may never catch up. The article places the blame squarely on the RBOCs, arguing that they dawdled on DSL, failed to see a market for online services until the mid-90s, then became content to rent second dial-up lines to residential customers while defending their legacy T1 services for business. Even now, new DSL installations often mean the loss a second telephone line to residential users. The article suggests that the economics of Verizon's DSL business won't be favorable until it has 3.5 million to 4 million customers, a target that the company might not hit until the end of 2005. The cable companies invested heavily in cable plant upgrades on the promise of digital TV services. They view that $60 billion investment as already-spent money from which they can gain additional profits with broadband services.
http://www.wsj.com