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SBC Offering Low-Cost DSL

Giant Baby Bell to deliver high-speed Net access, starting at $39 per month.

By Eric Brown, PCWorld   

The announcement arrived just as another fellow Baby Bell, Bell Atlantic, prepared to disclose plans for expanding its own DSL offerings in a deal with America Online.

While other Baby Bells and long-distance providers have moved from DSL trials to limited commercial rollouts in recent months, the SBC introduction is notable for both its unprecedented reach (it will equip 526 central offices within the first year) and its aggressive pricing.

Compared to the $60-per-month DSL service currently offered in select locations by Bell Atlantic and SBC subsidiary Pacific Bell, SBC's new DSL service will start at $39 a month, or $49 including SBC's ISP service for Internet access.

This costs about the same as cable modem access, while offering similar 1.5-mbps downloading and 128-kbps uploading capability. For extra cost, SBC will provide connection speeds at up to 6 mbps downstream and 384 kbps upstream, though at these speeds bandwidth could vary depending on the distance from the central office.

The installations will be split almost equally between Pacific Bell's California territory, where DSL coverage will nearly triple, and SBC's Southwestern Bell home turf, where DSL is debuting.

Appearing Soon in a State Near You?

Later this year, SBC's newly acquired Southern New England Telecommunications subsidiary is expected to launch DSL service in Connecticut. SBC hopes to expand its program into Ameritech's Midwestern territory, should the merger between those two Baby Bells go through.

While services are expected to be available by April, a potential obstacle to further expansion could emerge from the Federal Communications Commission. Within the month, the FCC is expected to rule on a proposal to force Baby Bells to spin off DSL services or else provide competitors with discount rates to resell DSL service. Both the Baby Bells and computer companies such as Compaq, which are introducing DSL-equipped PCs, are contesting the proposal.

Competing With Cable

Whether or not the telcos have to leap regulatory hurdles, it's unlikely they'll back off from the high-bandwidth race.

SBC's competitive pricing (and the new $41.95 DSL service AOL and Bell Atlantic recently announced) shows the phone companies are serious about competing with cable companies for home customers.

Cable has a substantial head start, with cable modems in use in about half a million homes, compared to around 60,000 for DSL. While the $200 installation fee and $40-per-month service fee doesn't begin to pay for the steep investment each DSL customer requires, the telcos have far more funds available than the cable companies to stick it out over the long haul.