Cable Vs. Telcos: Which Will Dominate American Homes?


Consumer demand is soaring for data, video and voice services. But which is better suited to provide them: cable or telephone companies? On "Morning Call," Katy Bachman, senior editor at Mediaweek magazine, and Blair Levin, telecom and media regulatory analyst at Stifel Nicolaus, took sides in the debate.

Cable vs. Telecom

Bachman said the winner will be the telcos. She asked CNBC's Becky Quick to consider, "How many people really like their cable company?" The editor noted that satellite-TV companies have been taking market share from cable providers in recent years -- proof, she says, of cable's vulnerability.

Bachman said the data and entertainment inroads being made by telcos into family homes -- such as Verizon Communications' new FIOS fiber-optic system -- must be considered "market by market." She points to "Dallas and Tampa" as evidence tha telcos are steadily gaining ground.

Levin, a former chief of staff of the Federal Communications Commission, votes for cable. He conceded that cable firms have a "brand problem" -- but said that "it's a lot easier for cable to enter the telco market," than it is for telephone companies to jump into video services. Levin pointed out that "cable guys have the technology and already built the networks" they'll need to grow.