I'm gald to see this happening. Ever since DSL was introduced I've said it was ripoff priced.Bout damned time.
Posted on 05/13/2003 8:30:51 PM PDT by HAL9000
NEW YORK - It may be the best news the high-tech industry has seen all year: This morning Verizon Communications laid out the details of its plan to slash prices, increase speeds and reach more customers with high-speed Internet access--moves which could invigorate the relatively torpid U.S. broadband market.High prices and lagging speeds have been the two primary reasons that America's use of broadband lags well behind global leaders such as Canada and South Korea. Silicon Valley groups such as Technet say the slow U.S. rollout has crippled many bandwith-hungry technologies and left the U.S. telecom industry drowning in excess capacity.
Verizon will cut the price of DSL, its high-speed Internet service, to as little as $30 a month for customers who get the service as part of a package. Non-bundle customers will see prices fall to $35 from between $40 and $50. The cuts put DSL within spitting distance of the $20 to $24 many people pay for dial-up service, and will likely trigger a rash of upgrades. Factoring in the cost of a second phone line that many customers use for dial-up service--but which DSL does not require--and upgrading to Verizon DSL will now actually save many people money.
While just fewer than one in five American homes currently use a broadband connection to the Internet, the potential for price cuts to boost that is dramatically clear. In Canada, where many consumers pay the equivalent of less than $30 per month, penetration rates are roughly double those in the U.S.
Today's moves mark Verizon as the most aggressive of the major broadband providers. SBC Communications, which opened the bidding war with price cuts earlier this year, is a close second. SBC also cut prices to similar levels, but only for new customers--and only those willing to sign a year-long contract.
A BellSouth spokesman said today that the company did not have anything to announce in response. Nor have any of the major cable companies announced an intention to match the price drop. "Verizon indisputably has the best broadband bundle in the business," said Bruce Gordon, president of Verizon's retail markets group.
So far none of the major Bells have turned a profit on selling DSL, though all expect to within the next few years. Verizon Vice-Chairman Lawrence Babbio said his company's aggressive price cuts will actually help the company "get to profitability quicker." His rationale: Because many of the costs of running a DSL network are fixed, adding incremental customers can be more profitable even if they pay lower prices.
Still, since Verizon also plans to keep current customers happy by cutting their bills, it remains to be seen whether the promised economies of scale are enough to offset that drop in revenue.
Regardless, it is an aggressive strategy that Verizon can easily afford to fund, given its huge free cash flow (cash from operating activities less capital expenditures and dividends), which hit $2.3 billion last quarter alone. Its cable competitors, strapped for cash and looking to cut debt, may have a hard time matching the offer. Cable broadband now typically runs $40 to $50 a month.
Verizon also announced it is expanding the reach of its DSL network to 80% of its customers, and bumping up the speeds many customers will receive to 1.5 megabits a second. (By comparison, a recent study found that DSL users typically get closer to one third that speed.) With little fanfare DSL equipment makers have, steadily improved the range and rate of their equipment by using faster chips and smarter software. The Verizon announcement is one sign that those benefits are beginning to flow through to consumers.
Finally, the company laid out the details of its plan to experiment with Wi-Fi service in Manhattan. It has cleverly converted 150 of its New York pay phones into Wi-Fi hotspots by running DSL over the phone wires and then simply attaching a cheap access point to the phone booth. Verizon DSL subscribers will be able to use any of the hotspots, which will ultimately number 1,000, free of charge.
"We want to have an extensive experiment with customers in Manhattan," said Gordon. If things go well the Wi-Fi model will spread, he added. "Our expectation would be to concentrate in major metro areas where we have a high density [of customers]."
I'll take him long before the guy Oceanic Cable has been running. All it is is a scrolling white text on a black backgrounds with an obnoxious voiceover, "My name is Willie Sink, spelled S-I-N-K. I'm a trial lawyer. I fight for the little guy."
There's more, but it's too obnoxious to commit to memory.
I'm gald to see this happening. Ever since DSL was introduced I've said it was ripoff priced.Bout damned time.
You can get prepaid on the AT&T network for as low as $3.33 a month if you don't use it much, with free voicemail. I was paying $6 alone just for voicemail from Bellsouth. You can go to www.pharosint.com for details. A used AT&T phone can be bought on Ebay for about $25. I have no association with them other than being a customer.
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