Phone companies see first broadband loss

Phone companies are losing the high-speed Internet game. In the second quarter, the landline phone industry lost 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 country, 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 to the heavily shielded cables that carry TV signals. That means cable companies find it much easier and cheaper to provide fast Internet service compared with 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, with 18.7 million subscribers, followed by AT&T, with 16.4 million.