An essay by Mark Gimein in BusinessWeek posits that the phone companies are afraid of technology:

Ah. Welcome to Telco Land, a strange country where the biggest players talk more and more about innovation yet approach new ideas with baby steps, build little themselves, and when they think about technology are apt to believe it's a threat they have to fight....

Verizon and AT&T are under great pressure to recast themselves as innovators. They lag behind the cable companies in their efforts to sell high-speed Internet access. Their local telephone monopolies are under attack as those same cable companies' offer to provide phone service at lower rates along with TV and data. Looking ahead, wireless technologies ranging from the familiar Wi-Fi to more powerful wireless standards being advanced by researchers in academia and companies such as Intel pose a whole new set of threats.

In response, AT&T and Verizon are rushing to build networks to deliver TV service and high-speed broadband access. They point to them to make the case that, yes, they are technology companies. Verizon is spending billions to roll out a next-generation phone, data, and video network called FiOS (as in "fiber optic") to give its customers faster Internet service and an alternative to cable. While not matching FiOS' impressive speeds, AT&T promises to do something similar with Lightspeed, which it started marketing in parts of San Antonio under the brand name "U-verse" not long after my visit.