Pike & Fischer survey shows that broadband is flattening. (I wrote a little about this yesterday). This means a couple of things:

One, customer acquisition costs of broadband is going to increase AND margins will shrink, because it also means short term pricing will drop. (Price war coming ... again, just when the Duopoly thought that they could raise rates

Two, more advertising, more contracts, more gimmicks, more dissatisfied customers.  (And likely a move to more cellular broadband than terrestrial).

Like NBC, other Fortune 500 companies are slow to realize that you need to deliver what the customer wants to buy -- not try to force them to buy what you are selling.  The new economy coupled with broadband and mobility is knocking over industries left and right - see music, movie, newspapers for examples. Why would you think that your company is immune?

Let's not forget that both telcos and cablecos have incredible debt. They also have incredible liability on pension and health benefits for retirees (who will get screwed; bet on it). 

But back to flattening broadband signups. 

The stimulus has not produced any winners or shovel ready projects yet. In fact, it has the opposite impact: freezing up most of the network expansion to deliver broadband to unserved areas. So as we watch the signups slow down, what will the Duopoly do to convert all of EarthLink, AOL and NetZero's dial-up users to broadband? Do they even know why dial-up users resist broadband? 

After that, the Duopoly has to figure out how to get people without computers to buy services from them. I can't believe I am saying this, but VZ FiOS TV might be answer for some people with the new FB, Twitter and photo widgets VZ rolled out for IPTV service. No PC necessary.

As more items become wi-fi enabled like your dvd player, maybe folks won't need a computer. Maybe broadband and an X-box will be enough. You get Netflix, Pandora, YouTube - what more do you need? Your cell phone can FaceTweet.  Or maybe the hotel room boxes are all you need - email, simple web-surfing, VOD (video-on-demand).

The key will be penetrating the households without computers. Cable and telco alike need to start brain-storming over that one. (Or hope one of their partners like Cisco come up with the answer for them).