Vishesh Kumar

With the recession squeezing ad budgets, cable companies are redoubling their efforts to mimic Internet advertising, in part by offering a way to target ads at selected groups of consumers.

In the marketing battle between telephone and cable companies, both sides have found a surprisingly simple weapon: local-television offerings such as community news, traffic alerts and weather. Both cable and phone companies are vigorously marketing features such as super-fast Web access and on-demand movies.

A number of savvy customers are realizing that while times are tough for consumers, they are also tough for cable and phone companies. Under intense pressure from Wall Street to keep subscribers as the economy sags and competition intensifies, many carriers are bent on retaining customers even if it means offering big price breaks.

Google Inc. has approached major cable and phone companies that carry Internet traffic with a proposal to create a fast lane for its own content. At risk is a principle known as network neutrality.

The Federal Communications Commission is investigating why some cable-television subscribers are paying the same amount of money even as they are losing channels. The Commission recently sent letters of inquiry to 11 cable companies and Verizon asking about pricing and changes they have made to their tiers of service, including details about channels that have been moved to digital service.

Reeling from a stock-market crash and a looming recession, consumers may finally be putting the brakes on the purchase of pricey luxury items like high-definition televisions. Spending in the electronics category fell by 14% year-over-year in September, following modest declines of 3% and 6% in the previous months.

As the battle continues over carriage fees between Time Warner Cable and local broadcaster LIN TV, the cable operator is gearing up for what analysts expect to be its next major squabble.

Comcast, the country's largest cable operator by subscribers, formally submitted plans to the Federal Communications Commission late Friday detailing how the company plans to manage its broadband network. Rather than target specific types of bandwidth-intensive applications like peer-to-peer file sharing, the company will instead slow Internet speeds for its heaviest users at peak times when its network is congested.

The battle between cable and phone companies to sign up new customers for high-speed Internet service is heating up, creating fresh opportunities for consumers to cut their bills. While the most generous offers are coming from the phone companies, some analysts expect cable companies will also become more aggressive in their own promotions as they compete to retain customers.

As Verizon gears up to offer pay-TV service in New York City, Time Warner Cable is making a series of moves to compete more aggressively with the phone titan for one of its most prized markets.