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Verizon FiOS Gains Take More from DBS

Verizon Communications Inc. has previously said it had reached 23 percent penetration in Keller, Texas, home to Charter Communications Inc.

But Charter president and chief operating officer Neil Smit told a Bear, Stearns & Co. Inc. analyst conference last week that Charter has only lost �four points� of market share -- not enough to entirely explain Verizon�s 23 percent penetration figure.

The answer, Smit suggested, may be DirecTV Inc. loss, with which Verizon ironically has a marketing relationship. Smit said Charter lowered prices one year before Verizon got to town, in the summer of 2004, because of the competition from direct broadcast satellite (DBS).

He added that DBS� penetration was 32.5 percent in the market, far above the national average. Smit said �connects are strong,� suggesting that Verizon�s gains are coming as much from DBS as they are from Charter.

In a related story, the American Consumer Institute surveyed 883 cable consumers in three markets in Texas where telephone companies have launched video service and found that prices dropped for many homes.

The report found that 22 percent of customers had switcehd from their cable or direct broadcast satellite provider to the telephone company. One in six cable customers reported a drop in their bill, with some saying they have saved more than $26 per month by switching providers.

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