Doupoly competition begins in the small biz market

The truce between cable and the telcos is beginning to erode and there are signs of competition in the small business market. The real catalyst in this arena is the continued enforcement of local loop unbundling in the the last mile to business properties. This has allowed upstarts like Speakeasy who has been aggressively competing for the telco’s T-1 class business. The disruption has forced telcos to compete with similar services, and the highly profitable segment also attracted the cable guys.

Today competition between cable and telephone companies for business broadband customers is red-hot. As of 2006, more small businesses had DSL (35 percent) than cable (25 percent), but that balance is shifting as cable companies ramp up the speed of their service and push business-oriented broadband/phone packages at compete very attractive prices.

According to Brian Washburn, network services research director for Current Analysis, business DSL plans used to be more attractive because they “bundled in a voice line, unlimited local/long-distance plans and wireless options, while cable was broadband Internet and not much else.” Now, however, “cable bundles [for small businesses] are starting to look like the long-established T1 integrated voice/data services from the telco side.” (PC World)

We hgold high hopes that new broadband offerings from Clearwire and potential overbuilds by Verizon outside of their traditional territory may loosen the grip the non competitive US broadband market.