In a bid to outdo rivals from the cable industry, Verizon announced this morning a "broadband big bang," in which the communications giant is significantly cutting the price of its DSL-based broadband offerings, doubling DSL download speeds for many customers, and offering Microsoft's MSN 8 service. The changes will affect millions of American consumers and, with any luck, jump-start the adoption of high-speed Internet access. In a related move, Verizon announced that it will activate the first 150 of a planned 1000 Wi-Fi (the 802.11b wireless standard) hotspots nationwide by retrofitting surplus pay phones (put out of commission by the proliferation of cell phones) into Wi-Fi signal boosters. The first Wi-Fi hotspots will be in New York City; the company will roll out similar services in other US cities later this year.
"This new service will enable millions of consumers to take advantage of the benefits of high-speed Internet access from Verizon, with rich services and content from MSN," said Microsoft CEO Steve Balmer. "Verizon Online DSL with MSN 8 will help speed the adoption of broadband by providing consumers with communication and information services that enrich the online experience while addressing important issues like junk email and online safety."
Under the new pricing policy, Verizon DSL access drops from $50 a month to $35 a month, or just $30 monthly for customers who also use the company's long distance and wireless phone services. Additionally, DSL download speeds have increased dramatically, from a maximum of 768Kbps to 1.5Mbps (upload speed remains fixed at 128Kbps). The company says this download transfer rate compares favorably to download speeds that cable Internet providers such as Comcast and RCN offer. Whether these actions will be enough to counter strong sales of cable-based broadband is unclear. Cable is currently outselling DSL by a 2-to-1 margin, and DSL is still hampered by a technological problem that requires its users to live within a certain distance of DSL switching gear. For this reason, more than one-third of Verizon's customers can't even get DSL service.
Additionally, Verizon DSL customers with wireless devices such as notebooks and PDAs will be able to use the company's new Wi-Fi hotspots for free, Verizon notes. Although the company operates more than 350,000 pay phones nationwide, only several thousand of those are suitable candidates for the Wi-Fi conversion, the company says. Still, Verizon hopes that the "anywhere/anytime" wireless access perk will also help convert customers to DSL.