WSJ writes about how cable, Internet and wireless are hurting the phone networks and threatening their business model:
The Bells have lost some 28 million local phone lines since the end of 2000 — a drop of more than 18%. This is the first time since the Great Depression that phone companies have seen their lines decline. The Bells are now losing 4% of their residential lines a year.
Cablevision Systems Corp. signed up 115,000 phone subscribers in just over seven months in its New York region. Cox Communications Inc., the Atlanta-based cable company, is already the 12th-largest phone company in the country, with 1.1 million Internet and traditional phone customers. Comcast Corp., the nation’s biggest cable company, plans to offer Internet phone service to 40 million homes by the end of next year. And Internet phone start-ups like Vonage Holdings Corp. and Skype Technologies SA are signing up thousands of customers.
Behind the telephone earthquake is a giant force in business history: Just a few years after the Internet investment bubble spectacularly burst, the Web is now maturing and irrevocably transforming commerce. Today phone calls — just like music, photos, and video — can be turned into digital information and delivered much like e-mail over the Internet.