Phone companies are losing the high-speed Internet game to cable providers.
In the second quarter, the landline phone industry lost broadband subscribers for the first time, as cable companies continued to pile on new households and small businesses, thanks to the higher speeds available 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 United States, say industry watchers. That could mean a lack of choice and higher prices.
Phone lines, designed to carry conversations, are poorly suited to carry Internet signals when compared to the heavily shielded cables. That means it is easier and cheaper for cable companies to provide Internet access than phone companies.
Cable providers now offer download speeds of 100 megabits per second in many areas, about 20 times faster than Digital Subscriber Lines, or DSL.
Cable companies now account for 57 percent of all U.S. homes connected to broadband and phone companies connect the rest.
A tally of reports from the eight largest phone companies in the U.S. by The Associated Press shows they collectively lost 70,000 broadband subscribers in the April to June period. AT&T accounted for the bulk of the loss -- 96,000 subscribers -- while other companies on average added a few thousand subscribers. Meanwhile, the top four public cable companies reported a gain of 290,000 subscribers.