Now that Comcast's
The relatively new technology allows for the transmission of voice communications over broadband Internet lines. Internet telephony is less expensive than traditional circuit-switch technology, and represents a distinct threat to Baby Bells such as BellSouth
Comcast inherited 1.2 million traditional residential phone customers with the acquisition of AT&T Broadband in 2002, but has been slow to leverage that segment of the business. Rival Time Warner
Comcast also announced plans to incorporate digital video recorder (DVR) functions into set-top boxes by year-end. The company test-marketed Tivo
Not only will the new telephony service be an earnings driver (the incremental costs of adding services to existing cable lines is small), but it should also slow the defections of cable subscribers to satellite providers such as DirecTV
With 21 million subscribers and a presence in 17 of the nation's top 20 markets, Comcast is the clear-cut leading cable operator, double the size of closest competitor Time Warner. The company's size and established base should be an asset going forward. Cross-marketing emergent new services to markets already penetrated will become vital, given the maturity and stagnant growth of the core cable industry. Yesterday's decision to finally move ahead with advanced services such as VoIP and DVR comes not a moment too soon.
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Fool contributor Nathan Slaughter owns none of the companies mentioned.