Verizon recasts DSL

Verizon this week revamped its residential and small business DSL services with a price reduction, increased speed, bundled content and wireless access.

Verizon hopes the reworked service will spur demand and increase its share of DSL Internet access lines. Among the RBOCs, Verizon, with 1.8 million lines, is currently the No. 2 provider of DSL behind SBC, which has 2.2 million lines in service.

Verizon plans to extend broadband capacity to 80% of its 57.5 million access lines by the end of this year, and its new DSL packaging and pricing is intended to drive that, company executives say. The increased penetration should help Verizon achieve profitability from its DSL service faster, the executives say.

Analysts agree, while noting other competitive benefits.

"We expect the lower price to reduce churn in the DSL base, a prime contributor to lower margins in DSL," says John Hodulik of UBS Warburg. "Deeper penetration of DSL should also lower (access) line losses over time as these competitors have yet to formulate a workable consumer broadband strategy. Longer term, this offer is clearly focused on the large cable MSOs [multiservice operators] in an effort to take back market share in high speed data and head off competition from cable telephony down the road."

Specifically, Verizon is rolling out Wi-Fi based wireless broadband Internet access across 1,000 pay phones in New York City. This will enable Verizon's Online DSL customers who have laptop computers, PDAs or pocket PCs to gain free wireless Internet access if they are within 300 feet of a Wi-Fi enabled pay phone -- or "hot spot."

Verizon has already turned up 150 such hot spots. Some 350 will be turned up this summer, and 1,000 by the end of the year, Verizon officials say.

Verizon decreased the monthly entry fee from $49.95 to $34.95 for consumers, and by $10.00 to $59.95 and $89.95 for small businesses. Verizon has also upped the downstream speed from 768k bit/sec to 1.5M bit/sec.

Residential users who purchase DSL as part of Verizon's Freedom local/long-distance bundled service can get it for $29.95 per month instead of $34.95, the carrier says. Verizon Freedom for Business packages now offer a 20% discount on the monthly recurring charge for any business DSL package, the carrier says.

The new lower rates will become effective for existing Verizon Online DSL customers on May 21.  Customers will begin seeing the new price on their June and July bills, Verizon says.

The RBOC has also bundled the recast DSL service with Microsoft's MSN 8.0 software, which includes shared browsing technology, advanced parental controls, e-mail virus protection and spam filters, research and learning tools from MSN Encarta Plus, financial management software, and photo posting and editing.

The new service also will soon feature Verizon's Digital Companion service that is currently under development.  Digital Companion will allow customers to integrate calendars, address books and to-do lists with caller ID tracking, call dialing, and call forwarding, the carrier says. 

Verizon and Microsoft entered into a broadband content delivery relationship last June. SBC has a similar relationship with Yahoo! and the two unveiled their service last September.

New customers will receive MSN 8.0 with their Verizon Online DSL installation CD, and existing customers can order the CD free of charge.

This story, "Verizon recasts DSL" was originally published by The Edge.

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