US DSL

Verizon, Yahoo team up on low-cost DSL in US

Agence France-Presse

WASHINGTON -- Verizon Communications and Yahoo said Tuesday they will offer a discounted high-speed Internet service in a bid to convert dial-up customers and, in Verizon's case, to counter cable-industry rivals.

Verizon and Yahoo said Tuesday they plan to sell DSL, or digital subscriber line service, at an introductory rate of 15 dollars a month with a one-year commitment in the Verizon region that includes in 28 states and the District of Columbia.

The plan from Verizon, one of the biggest US telecom providers, closely matches a DSL offer from SBC Communications which also has a partnership with Yahoo. SBC, the leading US supplier of high-speed service over phone lines, cut introductory rates to as low as 15 dollars before the summer began.

SBC's service, however, offers download speeds of 1.5 megabits, compared to just 768 kilobits for Verizon. Verizon offers higher speeds in plans costing from 20 to 35 dollars a month.

Bob Ingalls, president of Verizon's Retail Markets Group, said market research shows that 50 percent of Americans still use slow dialup access and that they are resistant to paying more than 15 dollars a month.

"Our goal is to give people a taste of it," Ingalls said in a conference call.

He predicted that many customers, once they get used to speedy Internet access, would eventually upgrade to faster, more expensive plans.

"Customers that come in at entry level ... we know they look at higher speeds," he said.

Verizon's move comes as cable and independent companies move to encroach on the traditional phone business by offering a full suite of phone services in addition to pay television and high-speed Internet access.

Phone companies lose as much as 70 dollars in monthly revenue each time a customer switches to a cable operator.

Verizon's about-face also reflects a growing awareness on the part of phone companies that DSL is replacing local-phone service as their most important product. Phone customers who also subscribe to high-speed service are least likely to leave, industry executives say.

"DSL is a huge contributor to reducing 'churn' across our entire business," Ingalls said. Churn refers to the percentage of customers who cancel service.

At 15 dollars, basic DSL service is roughly one-third the price of cable high-speed access, though cable companies also offer special introductory deals.

Verizon and Yahoo also plan to launch an additional co-branded service for customers of Verizon's new FiOS fiber-based Internet access service later this year that has among the highest speeds available.