NCTA-funded study claims $100 billion in savings

A study commissioned by the National Cable and Telecommunications Association is claiming consumers and small businesses could save up to $100 billion over the next five years because they now have a choice for local telephone service.

The study was conducted by Microeconomic Consulting and Research Associates, which compared average rates for digital telephone service from the cable company with those of telephone companies for both consumers and small businesses. The study found consumers could save an average of $135 each year or more by switching to cable telephony, and small businesses could save 70% on their phone bills or nearly $500 each year on average by switching.

Cable operators today don’t reach very deeply into the small to mid-sized business market but have been showing increasing interest in extending the reach of their hybrid fiber/coax networks into businesses that sit close to that cable plant.

The study uses what author Michael Pelcovits, principal at MiCRA, calls “widely accepted economic data sources and forecasting tools” to predict that nearly 24 million Americans are likely to purchase phone service from their cable companies by the year 2011.

One purpose of the study appears to be to convince Congress to make sure interconnection of networks continues to advance to prevent incumbents from in any way devaluing VoIP.

Pelcovits said, in a press release, that while cable telephony services are as low as $34.95 a month, before taxes and fees, comparable services from AT&T and BellSouth cost $50 a month for consumers, before taxes and fees. He compares Cablevision’s Optimum Voice for online business customers at $34.95 for three lines or fewer with Verizon’s comparable small business product at $24 to $66 a month.