Sept. 4 (Bloomberg) -- Cablevision Systems Corp. finished the first phase of a $300 million wireless Internet network, a step that could give it an edge over telephone companies invading its territory.

Cablevision, the cable-television company serving metropolitan New York, extended free Wi-Fi service throughout commercial areas of Long Island's Nassau County, parts of adjoining Suffolk County and at all commuter train stops on Long Island, the Bethpage, New York-based company said in a statement.

The project is designed to give Cablevision an edge against Verizon Communications Inc., which sells TV, voice, Internet and mobile-phone service in the same markets. Last quarter Cablevision added 260,000 new subscriptions to its cable, Web and telephone services.

``It's not hard to imagine that a customer would say Cablevision's service, with the same speed but including free wireless, is a better deal,'' Sanford C. Bernstein & Co. analyst Craig Moffett said in an interview. No cable company has tried the free-wireless strategy, said Moffett, who recommends the stock and doesn't own it.

Cablevision will consider free Wi-Fi successful if it reduces customer defections and convinces existing TV customers to add Internet service, spokesman Jim Maiella said. The company has 70 percent to 80 percent of the high-speed Internet customers in its service areas, he said, the highest penetration in the cable industry.

The Wi-Fi network will extend to the rest of Cablevision's territory by 2010, Maiella said.

Cablevision fell $1.28, or 4.1 percent, to $30.26 at 4:03 p.m. in New York Stock Exchange composite trading. The shares have jumped 24 percent this year.

Under pressure from investors, Cablevision is considering plans to sell some assets, spin off businesses and repurchase its shares. On Aug. 15, the company declared its first regular dividend, a 10-cent quarterly payout.

To contact the reporter on this story: Tim Mullaney in New York at Tmullaney1@bloomberg.net

Last Updated: September 4, 2008 16:21 EDT