Qwest was the first Baby Bell to roll out stand-alone DSL – also known as “naked DSL” – in response to a growing number of consumers who wanted high-speed Internet access without paying for phone service from Qwest.
Now naked DSL is becoming a hurdle for Verizon and SBC, the two titans of the U.S. phone industry.
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New York State Attorney General Eliot Spitzer this week urged the Federal Communications Commission to require naked DSL as a condition for the proposed Verizon-MCI and SBC-AT&T mergers.
“By selling DSL with its monopoly phone service, Verizon discourages its customers from using (Internet phone service) competitors,” Spitzer told the FCC.
Verizon and SBC say that technological hurdles prevent them from rolling out stand- alone DSL. But analysts say the Bells don’t want to lose phone customers.
“When Qwest (launched naked DSL in February 2004) it made it clear that it wasn’t an impossibility for a Bell,” said Scott Cleland, chief executive of Washington-based Precursor Group. “It was not a question of possibility, it was a question of will and want.
“(Qwest chief executive) Richard Notebaert wisely understood that Qwest could not fight technology,” Cleland said. “The other larger Bells have the luxury of trying to protect their legacy monopoly positions.”
Overall, Qwest claims 1.1 million DSL (digital subscriber line) customers in its 14-state region. Most of the 28,000 consumers who have signed up for Qwest’s naked DSL are Internet users who use wireless, cable or Internet technology for phone service.
Naked DSL is popular with young, middle-income consumers who are technologically savvy and looking to save money on their phone bills, according to Scott Russell, Qwest’s director of DSL product management.
Qwest charges $50 a month for naked DSL, including an Internet service provider. The price drops to $45 if the customer also signs up for Qwest wireless service.
SBC and Verizon have recently indicated they will begin offering naked DSL later this year, although none of the Bells are likely to promote the service eagerly.
“All the Bells want to appear pro-competitive and pro-technology with naked DSL,” said Donna Jaegers of Denver- based Janco Partners. “But they don’t really push it.”
Staff writer Ross Wehner can be reached at 303-820-1503 or rwehner@denverpost.com.
