Tiny Rhode Island may be the most interesting battleground in the boiling war between telecom and cable.

There, Verizon Communications Inc. (VZ) has undertaken a local and costly approach to winning subscribers for its FiOS TV service. While the New York telecom giant has had some success, the local cable operator - privately held Cox Communications Inc. - appears to be doing a better job of defending its turf, thanks to new product packages, new sales channels and marketing messages that stress the company's state roots...

...The competition will only get tougher, however, as regulators in coming months are likely to clear Verizon to sell FiOS TV service to most of the state, including the capital of Providence.

The battle already is proving costly...Cox estimates Verizon is spending up to $2,000 per customer in subscriber acquisition costs. Cox spends roughly $200 to $300 per customer to market its services, but has acknowledged spending more to combat competition in Rhode Island...

...Industry experts say the intensive sales model can't be taken to the national level, and wouldn't even work if expanded to just the suburbanneighborhoods in Verizon's territories. Costs would skyrocket if the company were to remain that consistently aggressive...

...But with cable competition mounting, Verizon has few options other than to keep promoting FiOS..."When you're losing 8% of your lines year over year, you need to be aggressive," said Todd Rosenbluth, an equity analyst at Standard & Poor's...

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