Verizon captial spending in 2004 was almost four times that of Comcast. SBC capital spending in 2004 almost twice that of Comcast. Many customers in the Detroit Metro market are itching for a viable option to Comcast, and they don't want an ugly satellite dish nailed to their roof or garage.
"Many customers in the Detroit Metro market are itching for a viable option to Comcast..." ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ We have one here in Oakland County, namely Brighthouse Networks. I also see that they have an office in Redford. This service simply blows away the garbage that I had with Commie when I lived in Wayne County. My speed is now in the low to mid 4's, compared to when Commie came in and took over my service from MediaOne and promptly capped it at 1.4 (where it had been reliably in the 3's with mediaOne). I've been very happy with Brighthouse for the entire time that I've had them, something that I could NEVER say as a former hostage of Commie's.
The problem with your reasoning is that VZ and SBC are experiencing a significant decline in their landline business which allows them to generate the significant cash flows to spend on expansion into cable. If this hemorage continues they will no longer be able to spend at their current pace. The cable companies don't really have this problem. I think CMCSA is the clear winner in all of this.
VZ and SBC are not experiencing "significant" declines in landline, only about 1% a year. Hardly alarming. There is even still some natural growth in landlines. Every time a new office building or store is built, what do you see inside? More telephones with wires, just like 50 years ago. Your reasoning is flawed about spending on network expansion and upgrades - "The cable companies don't really have this problem". Oh, really. Where are the cable companies going to get the money for upgrading their networks, while simultaneously being attacked by and losing customers to both the dish companies and the telephone companies? This is a zero-sum game, and since the cable companies start out with a monopoly and 100% share in many markets, they obviously have the most to lose.