Can DSL handle success?

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eventually wring more profits out of subscribers by selling them higher-speed services or other, more-advanced services such as Internet Protocol TV.

Verizon has already started selling its television service over Fios in several states, including Texas, Florida and Virginia. AT&T is testing its TV service in Texas, and it expects to offer it more widely later this year.

Incapacitated?
But it's a tricky business. The low-priced DSL services have certainly struck a chord with price-sensitive customers--but even without the price cuts, experts say, the growth in the broadband market is still healthy as people drop dial-up for broadband and more-experienced Internet surfers upgrade to faster speeds.

That seems to be borne out by the fact that cable operators, who have marketed their services by emphasizing faster download and upload speeds, have also been adding new subscribers.

Comcast, the largest high-speed Internet provider in the country, reported last week that it added 378,000 new broadband subscribers in the fourth quarter of 2005. In total, it added 1.5 million subscribers in 2005, ending the year with 8.5 million high-speed customers.

That's in spite of the fact that Comcast's services are pricier than its rivals' DSL offerings. Cerney, for example, nabbed an introductory rate of $19.99 a month--but that price lasts for only three months, after which the cost jumps to $42.95.

Comcast and other cable operators say they'd rather compete on the value of their service than strictly on the price. As a result, they tend to bundle multiple services, such as high-speed Internet access, telephony service and TV, all in one package. Plus, Comcast's 6mbps service is much faster than Verizon's 768kbps service.

The bundling strategy has worked well for Comcast. For example, it claims that 98 percent of its new digital voice customers subscribe to a second service with the company.

"What we are finding is that our customers are choosing our service and recommending it to friends and family," said Jeanne Russo, a spokeswoman for Comcast. "We offer a better service than our competition. And we're able to service everyone in our footprint and provide the speeds we promise."

All this could spell trouble for Verizon as it looks to meet demand.

A spokeswoman said the company has been forced to stop taking orders in some parts of the country. Equipment shortages from one of Verizon's key suppliers, which the company has chosen not to name, is part of the problem, she said--coupled with increased demand for Verizon DSL services.

"If we reach capacity at a central office, we have no choice but to stop selling for awhile until we get in additional equipment to serve more customers or until more lines free up," said spokeswoman Bobbi Henson. "The extreme popularity of our new 768K service, in combination with equipment shortages we've had from our vendor, have resulted in some of our offices now reaching capacity."

Henson said the equipment supply issue should be cleared up soon, and that after that, the company shouldn't have problems servicing new customers.

AT&T said it hasn't had any trouble keeping up with demand, hence the recent price cut to $12.99.

Despite any inconveniences or delays, Cerney, the disappointed prospective Verizon customer, said she still hopes to take advantage of the Verizon deal.

"I was just so tired of dial-up, and $14.95 is a great deal," she said. "I really don't want to have to pay $45 a month for Internet, so I'll probably try to switch to Verizon when the Comcast promotion ends."

[Remo_Williams]

Unsurprising.

AT&T always had its networking act together, and SBC was always a leader in the DSL space with respect to offering lower costs and higher speeds. Verizon, as usual, still operates like a monopoly. I predict that Verizon will try to legislate their way into being competiti... oh wait, they're already doing that in NJ.

-R

[telestarnext]

Spell Checker Anyone?

AT& ?

:)

[Remo_Williams]

Unsurprising.

AT&T always had its networking act together, and SBC was always a leader in the DSL space with respect to offering lower costs and higher speeds. Verizon, as usual, still operates like a monopoly. I predict that Verizon will try to legislate their way into being competiti... oh wait, they're already doing that in NJ.

-R

[telestarnext]

Spell Checker Anyone?

AT& ?

:)

AT&T (SBC) what a joke on DSL Price

The Great AT&T (the old SBC) is just a joke when it comes to there DSL pricing the 14.95 a month is only good for the first 6 months as you said but one other thing is that it is only good if you sign up on the internet and only if your in one of the areas that they normally serve. (IE: the area is only served by them as a class A LEC). The area where I have been attempting to get the service for a friend of mine is in a Verizon owned area but the owners of the Apartments where my friend lives have a contract with SBC the NEW AT&T for them to be the only one to provide service for there complex (not sure of the Legal status of this). When attempting to sign up on the net as required there was no issue but they canceled the order 24hours after and then never called to say any thing we waited until we did not receive the modem and called to find out this information that we would have to call and sign up and would cost 29.95 not the 14.95 on the net. What wonderful customer service from the big conglomerate.

[Too Old For IT]

Conduit Rights?

Back about 2001 I ran into this same problem at a historic downtown office building. Great rental rates, awesome aesthetics (marble floors, wainscoting and sweeping marble staircase off the entry way).

Broadband? Our choices were dial-up, DSL ($35 a month) and "maybe you can have 128 k ISDN" ($250 a month + another $1,000 to install). Of course, we could have a T-1, and a rate that was higher than the office space.

The local cable company was stubbed into the building, and "business class" cable was fairly inexpensive, but unavailable due to "conduit rights" the building management had signed with Ameritech.

The building remains about 2/3 empty to this day, and I can't help but think it is the conduit rights issue that is holding it back as prime office space.

AT&T (SBC) what a joke on DSL Price

The Great AT&T (the old SBC) is just a joke when it comes to there DSL pricing the 14.95 a month is only good for the first 6 months as you said but one other thing is that it is only good if you sign up on the internet and only if your in one of the areas that they normally serve. (IE: the area is only served by them as a class A LEC). The area where I have been attempting to get the service for a friend of mine is in a Verizon owned area but the owners of the Apartments where my friend lives have a contract with SBC the NEW AT&T for them to be the only one to provide service for there complex (not sure of the Legal status of this). When attempting to sign up on the net as required there was no issue but they canceled the order 24hours after and then never called to say any thing we waited until we did not receive the modem and called to find out this information that we would have to call and sign up and would cost 29.95 not the 14.95 on the net. What wonderful customer service from the big conglomerate.

[Too Old For IT]

Conduit Rights?

Back about 2001 I ran into this same problem at a historic downtown office building. Great rental rates, awesome aesthetics (marble floors, wainscoting and sweeping marble staircase off the entry way).

Broadband? Our choices were dial-up, DSL ($35 a month) and "maybe you can have 128 k ISDN" ($250 a month + another $1,000 to install). Of course, we could have a T-1, and a rate that was higher than the office space.

The local cable company was stubbed into the building, and "business class" cable was fairly inexpensive, but unavailable due to "conduit rights" the building management had signed with Ameritech.

The building remains about 2/3 empty to this day, and I can't help but think it is the conduit rights issue that is holding it back as prime office space.

[dad071444]

Are they kidding?

Why is it that everyone talks about $12.99 or $14.95, but forget that you MUST have a local telephone line at an additional $30-35 in order to get DSL,then your cost is $45 to $50 per month. I was paying $108 fro 1 line and DSL in Atlanta with Bellsouth! Try Comcast and Voip!

Too bad they aren't kidding...

My total telephone bill maxes out at $97.00/month. That includes 1.5Mbs DSL at $40.00/month, dial tone with unlimited extended local area calls at $13.00/month, long distance at $0.05/minute with a maximum charge of $22.00/month, and government mandated taxes/fees that total up to $20.00/month.

It seems to me that federal, state, and local governments are riding telephone service for all they can get. They're charging almost 26% tax rate for the services offered by the telephone company.

[dad071444]

Are they kidding?

Why is it that everyone talks about $12.99 or $14.95, but forget that you MUST have a local telephone line at an additional $30-35 in order to get DSL,then your cost is $45 to $50 per month. I was paying $108 fro 1 line and DSL in Atlanta with Bellsouth! Try Comcast and Voip!

Too bad they aren't kidding...

My total telephone bill maxes out at $97.00/month. That includes 1.5Mbs DSL at $40.00/month, dial tone with unlimited extended local area calls at $13.00/month, long distance at $0.05/minute with a maximum charge of $22.00/month, and government mandated taxes/fees that total up to $20.00/month.

It seems to me that federal, state, and local governments are riding telephone service for all they can get. They're charging almost 26% tax rate for the services offered by the telephone company.

Funny thing is...

Comcast claims to be able to service everyone in their footprint area at the speeds they promise (which in the fine print says that they don't guarantee any speeds and that network speeds may be slower than advertised during high local usage).

On the other hand, DSL can deliver the speeds advertised as long as the customer has a DSL capable phone line and as long as the DSL central office has enough equipment and a big enough internet backbone to handle all of the customers at that central office. I would think that as a matter of good business practice, the company that owns the DSL central office would try to keep peak usage below 85-90% of full capacity in areas that are selling well by installing new equipment and pulling bigger wires to the central office as soon as usage edges above 85-90% (of course, as they approach market saturation, the 85-90% figure should increase but not so much that they fall behind incoming orders).

Funny thing is...

Comcast claims to be able to service everyone in their footprint area at the speeds they promise (which in the fine print says that they don't guarantee any speeds and that network speeds may be slower than advertised during high local usage).

On the other hand, DSL can deliver the speeds advertised as long as the customer has a DSL capable phone line and as long as the DSL central office has enough equipment and a big enough internet backbone to handle all of the customers at that central office. I would think that as a matter of good business practice, the company that owns the DSL central office would try to keep peak usage below 85-90% of full capacity in areas that are selling well by installing new equipment and pulling bigger wires to the central office as soon as usage edges above 85-90% (of course, as they approach market saturation, the 85-90% figure should increase but not so much that they fall behind incoming orders).

[Pixelslave]

Wishful thinking

With this kind of customer ("I really don't want to have to pay $45 a month for Internet, so I'll probably try to switch to Verizon when the Comcast promotion ends."), wishing them they will subscribe to higher price (and potentially significantly higher due to the lower margin on the DSL) service is nothing more than wishful thinking from the telco. It's pretty difficult to imagine someone who could stand for dial up for so long could suddenly "wake up" for the need of IPTV when boardcast does everything they want.

[Pixelslave]

Wishful thinking

With this kind of customer ("I really don't want to have to pay $45 a month for Internet, so I'll probably try to switch to Verizon when the Comcast promotion ends."), wishing them they will subscribe to higher price (and potentially significantly higher due to the lower margin on the DSL) service is nothing more than wishful thinking from the telco. It's pretty difficult to imagine someone who could stand for dial up for so long could suddenly "wake up" for the need of IPTV when boardcast does everything they want.

[Knute Rondum]

verizon dsl

I had Comcast broadband for over 19 months and dropped it
bec of monthly cost. I took the 12 month dsl (higher speed offer)
from verizon in Maryland. When taking the second 12 month
contract from verizon this month (FEB), I stepped down to the
$14.95 a month slower dsl speed which has now taken place. I
notice very little difference in connect speed-and the
downloading of urls in comcast (reportedly faster than dsl) the
higher speed verizon dsl and the slower speed verizon dsl.
HOWEVER, I will tell you it is my experience that the verizon dsl
has MANY more drops in connection than the comcast
broadbank. If I can afford comcast next year at verizon renewal
time (FEB 2007), I will change back to Comcast unless verizon
Maryland corrects the problem of dropoff of dsl internet
connections.

[Knute Rondum]

verizon dsl

I had Comcast broadband for over 19 months and dropped it
bec of monthly cost. I took the 12 month dsl (higher speed offer)
from verizon in Maryland. When taking the second 12 month
contract from verizon this month (FEB), I stepped down to the
$14.95 a month slower dsl speed which has now taken place. I
notice very little difference in connect speed-and the
downloading of urls in comcast (reportedly faster than dsl) the
higher speed verizon dsl and the slower speed verizon dsl.
HOWEVER, I will tell you it is my experience that the verizon dsl
has MANY more drops in connection than the comcast
broadbank. If I can afford comcast next year at verizon renewal
time (FEB 2007), I will change back to Comcast unless verizon
Maryland corrects the problem of dropoff of dsl internet
connections.

[nyte3k]

BellSouth

Too bad i live in BellSouth region (atlanta, ga). They don't seem
to care if their prices are about the same price or higher than
Comcast and they don't care if their connection speeds are
lower. That's why i'm stuck in the $45/month faster comcast
service.

[bigdawg1988]

Re: BellSouth

The main reason bellsouth isn't lowering prices is comcast isn't delivering hispeed in many atl areas. They've had billboards up for 5 years, but no hispeed in my area. Bump them, they took too long. BS (no pun intended) doesn't have to step up much. Watch what happens when comcast rolls out hispeed throughout the ATL, prices will drop like a hot rock! Come on comcast, i need a dsl discount!

[nyte3k]

BellSouth

Too bad i live in BellSouth region (atlanta, ga). They don't seem
to care if their prices are about the same price or higher than
Comcast and they don't care if their connection speeds are
lower. That's why i'm stuck in the $45/month faster comcast
service.

[bigdawg1988]

Re: BellSouth

The main reason bellsouth isn't lowering prices is comcast isn't delivering hispeed in many atl areas. They've had billboards up for 5 years, but no hispeed in my area. Bump them, they took too long. BS (no pun intended) doesn't have to step up much. Watch what happens when comcast rolls out hispeed throughout the ATL, prices will drop like a hot rock! Come on comcast, i need a dsl discount!

[Steve Jordan]

Verizon DSL same as dial-up in my area.

I tried Verizon DSL, and ditched it after a year... the service eventually performed so badly, I was back to dial-up speeds. If that's the best Verizon can do, I don't care if they charge 5 cents for their DSL... it's not worth it.

[Steve Jordan]

Verizon DSL same as dial-up in my area.

I tried Verizon DSL, and ditched it after a year... the service eventually performed so badly, I was back to dial-up speeds. If that's the best Verizon can do, I don't care if they charge 5 cents for their DSL... it's not worth it.

Good policy

I'm actually pretty happy to hear Verizon is telling customers they'll have to wait. Its better than signing up everyone they can and having everyone have to deal with network outages.

I have no love for Verizon as a company - I think they're scummy and love to nickel and dime you (which I really hate). But I have to say I've had their standard DSL package for two years now, and its been out _maybe_ a couple hours over that entire time.

Good policy

I'm actually pretty happy to hear Verizon is telling customers they'll have to wait. Its better than signing up everyone they can and having everyone have to deal with network outages.

I have no love for Verizon as a company - I think they're scummy and love to nickel and dime you (which I really hate). But I have to say I've had their standard DSL package for two years now, and its been out _maybe_ a couple hours over that entire time.

[lingsun]

DSL customers have to buy equipment

My experience with DSL in Wisconsin is you have to buy the equipment and then sign up for a year at a time. Sounds like a lousy deal to me. I don't want to get stuck for a year with bad service. Cable is month to month and they provide all the equipment for free.

[lingsun]

DSL customers have to buy equipment

My experience with DSL in Wisconsin is you have to buy the equipment and then sign up for a year at a time. Sounds like a lousy deal to me. I don't want to get stuck for a year with bad service. Cable is month to month and they provide all the equipment for free.

[David Stamps]

Verizon - Boo!

I had a very high speed Verizon DSL for two years and found their customer service a joke. They started off by assuming the customer is an idiot and trying to blame the customer for the problem. They refused to answer the simplest question like is the internet down or is an internal problem. It is worse than calling the IRS. After one frustrating call, they told me that in 48 hours I might or might not be told that the interest was or wasn't down.
As a consultant I have set up numerous local accounts for small businesses over the years. I noticed that with the local cable company, I could also find a real tech to talk to in a matter of minutes and he would stay with me to resolve the problem.
When the local cable company started offering 2 MBS speeds at the same price as Verizon I switched and have never looked back.

[David Stamps]

Verizon - Boo!

I had a very high speed Verizon DSL for two years and found their customer service a joke. They started off by assuming the customer is an idiot and trying to blame the customer for the problem. They refused to answer the simplest question like is the internet down or is an internal problem. It is worse than calling the IRS. After one frustrating call, they told me that in 48 hours I might or might not be told that the interest was or wasn't down.
As a consultant I have set up numerous local accounts for small businesses over the years. I noticed that with the local cable company, I could also find a real tech to talk to in a matter of minutes and he would stay with me to resolve the problem.
When the local cable company started offering 2 MBS speeds at the same price as Verizon I switched and have never looked back.

[kitcar]

Ah, my old friend Verizon

After having ISDN from Verizon and "attempting" to switch to their DSL and telling them to forget it after four (4) months of no phone and no internet and after talking to the ISDN people who aren't allowed to talk to the phone people who aren't allowed to talk to the DSL people who are in Florida and can't talk to the ISDN or phone people in Texas who can talk to the local exchange people who don't know how the heck to hook up DSL since the DSL people are from a different company that Verizon people can't talk to who it turns out is owned and employed by Verizon, I told them to forget it, I'm getting cable. 3 hours later I had cable internet.

Verizon is still sending me bills for $849.32 for this experience. They did send me 7 DSL modems in one day. And charged me $99.00 each for them which was a very nice gesture since they never sent me the return labels for them that I requested after I was told in no uncertain terms that "these units have to be returned within 30 days or you will be charged $99.00 for your modem". They were unable to explain if I had to pay for the 7 modems that I didn't request that I never got the return labels for.

Recently they offered to settle the account for $21.00.

[kitcar]

Ah, my old friend Verizon

After having ISDN from Verizon and "attempting" to switch to their DSL and telling them to forget it after four (4) months of no phone and no internet and after talking to the ISDN people who aren't allowed to talk to the phone people who aren't allowed to talk to the DSL people who are in Florida and can't talk to the ISDN or phone people in Texas who can talk to the local exchange people who don't know how the heck to hook up DSL since the DSL people are from a different company that Verizon people can't talk to who it turns out is owned and employed by Verizon, I told them to forget it, I'm getting cable. 3 hours later I had cable internet.

Verizon is still sending me bills for $849.32 for this experience. They did send me 7 DSL modems in one day. And charged me $99.00 each for them which was a very nice gesture since they never sent me the return labels for them that I requested after I was told in no uncertain terms that "these units have to be returned within 30 days or you will be charged $99.00 for your modem". They were unable to explain if I had to pay for the 7 modems that I didn't request that I never got the return labels for.

Recently they offered to settle the account for $21.00.

[SimonMackay]

The double-edged sword that a service-provider faces

I was thinking over this issue about what an Internet service provider has to face up to when it sells a desirable Internet service for "a dime a dozen".

They have to think of what way they have to go to meet the demand. If the service is like cable or FTTH, it will also mean having to work out how many trucks that are available to roll out the technology to subscribers.

It may mean that the company may have to go into further debt to raise cash in order to provide the service. It would be an asset if the service is purely standards-based because they may have to have a second supplier "on call" to provide "infrastructure" equipment to meet the demand even if the regular vendor can't satisfy the demand quickly enough.

Thinking of a "waiting-list" scenario may have customers walking out of the special deal and in to the hands of competing service providers because they want it noe.

A good thing for the providers to do is to be able to have demand-satisfaction contingencies in place before they run that rock-bottom deal.

With regards,

Simon Mackay