Phone vs. cable battle heats up

NEW YORK – Verizon Communications Inc. sharply cut its prices for unlimited telephone service across the Northeast and Mid-Atlantic on Tuesday, including markets where Cablevision Inc. has just boosted broadband Internet speeds in the battle brewing between the phone and cable TV industries.

The new Verizon plans range from $35 to $40 for unlimited local and domestic long-distance plus call waiting, caller ID and voice mail, or from $30 to $35 for unlimited calling with no extra features. Taxes and surcharges typically add $10 to $20 to the monthly bill.

Those rates are at least $15 cheaper than any of Verizon’s existing packages with unlimited calling, although many of those plans include a larger selection of features and calls to Canada.

The aggressive offers mark another tactical maneuver in the developing showdown between phone and cable companies. The two industries are increasingly venturing into one another’s traditional markets in a bid to win new customers with a one-stop-shop for calling, Internet, TV and wireless services.

Verizon and fellow regional phone provider SBC Communications Inc. are spending billions to replace their copper phone lines with fiber-optic cables that can deliver cable TV, far-speedier Internet connections and new multimedia and interactive services.

Using those new lines, Verizon recently introduced TV in its first market, a suburb of Dallas, and now offers broadband download speeds from 5 to 30 megabits per second in 800 communities in 15 states.

At the same time, Verizon is also competing aggressively on price with its slower DSL service, introducing a $15-a-month plan last month, and now offering unlimited calling at rates almost competitive with the $20 to $30 a month charged by providers of voice over Internet phone services.

SBC has made similar moves in cutting its phone and DSL rates in a bid to keep subscribers from leaving and to attract news ones while it prepares for next year’s launch of TV and speedier broadband connections.

Cable companies, which have already lured away more than 5 million customers for their new phone services, are responding by boosting their broadband speeds and venturing into cellular service.