Qwest decouples DSL from voice

Qwest this week became the first RBOC to offer DSL to customers of its primary line voice competitors, a practice at least one other RBOC has been resisting.

Qwest said it will begin offering a DSL service on Feb. 28 that allows customers to purchase the broadband Internet access service regardless of whether they have a voice phone line with Qwest or not. BellSouth filed a petition with the FCC in order to halt regulators in some states in its territory from forcing it to unbundle DSL from voice for fear of losing primary access line and perhaps VoIP revenue to competitors.

Qwest says it decoupled DSL and voice due to customer demand.

“Some customers prefer to be wireless only but they want high-speed Internet access,” a Qwest spokeswoman says. “So this is simply, we looked at a need and decided to change our product suite so we could provide customers with the services they needed.”

The move may enable it to achieve its goal of one million DSL subscribers by year end. Qwest finished 2003 with 637,000 subscribers.

Up to now, RBOCs have been requiring DSL customers to also be voice customers so the RBOC can retain primary-access-line revenue. DSL is also the broadband connection by which RBOCs will provision VoIP into small business and residences.

Indeed, analyst see Qwest’s move as potentially harmful to its ability to retain primary access lines.

“We believe this increases the risk of primary line substitution and the opportunity for other edge VoIP providers to increase their market shares,” states UBS Warburg Analyst John Hodulik in a bulletin.

Qwest doesn’t see it that way. It claims that its “standalone” DSL offering will complement its plans to extend consumer VoIP into 14 western states by the end of this year by offering the service to Qwest voice and non-voice customers alike.

Qwest currently offers VoIP to DSL residential customers in the Minneapolis/St. Paul, Minn., area.

“We just wanted to provide flexibility and convenience to our customers so they could have the choice in purchasing what they wanted, and only the service they want,” the spokeswoman says.

But Hodulik notes that even if Qwest maintains the customer’s voice connection through VoIP, it loses revenues from the subscriber line charge and enhanced services.

Customers can purchase Qwest Choice DSL Deluxe with MSN Premium without Qwest phone service for $50 per month. Customers who want to select an ISP other than MSN can purchase Qwest Choice DSL Deluxe without phone service for $33/month and then select their ISP of choice.

Download speeds are 1.5M bit/sec while upload speeds are 896K bit/sec, the spokeswoman says.

Qwest is offering $5 discounts to customers who bundle the DSL service with satellite video or wireless. Qwest’s wireless service is handled by Sprint PCS.