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MSN continues its move away from DSL

Microsoft is pulling out of efforts to sell broadband Net access to customers in SBC Communications' geographic market, the company's latest move to refocus its broadband strategy.

Microsoft is pulling out of its efforts to sell broadband Internet access to customers in SBC Communications' geographic market, the latest step by the software giant to refocus its broadband strategy.

As of Dec. 12, Microsoft's MSN will no longer offer DSL (digital subscriber line) access to customers in SBC's territory. That means that MSN's DSL subscribers must switch over to SBC's own DSL service, which is co-branded with MSN's Web rival, Yahoo.

MSN subscribers who don't make the switch to SBC Yahoo by the deadline will lose their DSL service, a Microsoft spokeswoman and an SBC spokesman confirmed.

Current members have the option to stick with MSN as a software package for $119 a year, on top of their DSL access fees. The software pack includes e-mail, instant messaging, spam filters and parental controls, among other features.

The switch highlights ongoing changes at MSN. The unit is stepping away from being an Internet service provider and instead trying to convince broadband customers to pay an additional fee for MSN as a software package.

MSN and rival America Online face a similar reality. Both services are watching their dial-up subscriber numbers decline and are trying to keep Internet users on their services. Leasing broadband lines and then reselling them under their own brands offers lower margins than does dial-up. Both companies instead hope that broadband users will find their software packages worth the extra $10 to $15 a month, on top of their broadband bills.

The move comes a month after MSN restructured a similar line-leasing deal with BellSouth that moved its DSL customers to the service the Baby Bell offers. Meanwhile, Microsoft also restructured its deal with Qwest Communications International to no longer run its DSL business but instead to offer its MSN Web software as the default front end for Qwest's DSL subscribers.

MSN has a partnership with Verizon Communications, under which it serves as the default home page for Verizon's DSL subscribers.