We finally dumped our last analog phone line, which we had kept around in case we needed to send a fax. We decided to get rid of it because we've been using an efax service. We replaced it with an additional VoIP phone line, and our monthly charges for that phone went from an average of $100/month to $35/month.
With a communitywide broadband network in place, every local business would see similar savings on business phones. And with the right business model and network design, those lower cost services could be provided by the incumbent phone company, so the incumbent does not necessarily lose customers.