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Verio to offer DSL in new markets

The ISP and Web hosting firm invests $5.6 million in NorthPoint Communications and will offer the company's digital subscriber line service in eight markets.

Verio, an Internet service provider and Web hosting firm, has invested $5.6 million in NorthPoint Communications and will offer the company's digital subscriber line service in eight markets.

Verio will resell NorthPoint's DSL high-speed Internet service in New York, Boston, Washington, Los Angeles, and the San Francisco Bay Area.

Verio said it also plans to deliver DSL service in Atlanta, Dallas, and Houston by the end of April.

"There's a very good fit between the companies," said Sean Brophy, vice president of corporate development for Verio.

The company plans to bundle NorthPoint's DSL in packages that include Web hosting, domain name registration, email service, and security software and market the offering to small and medium-sized businesses.

DSL is one of the leading broadband connectivity options, although it trails cable modems in number of subscribers. The technology is frequently targeted at corporate users as a low-cost alternative to leased line connections such as T1s and ISDN lines.

Verio will offer symmetric DSL at speeds of 144 kbps for about $125 a month, with 1 mbps speeds going for more than $1,000 a month, Brophy said. The pricing packages will include some Web hosting or other Internet services, he added.

Recently, Baby Bells such as SBC Communications have announced intentions to lower DSL prices to reach the mass-market consumer audience.

Verio company executives said those low-cost offerings are targeted at consumers, not businesses, and are intended to cut into the cable modem market.

"We are putting together a value proposition that meets the needs of the small and medium-sized business user," Brophy said. "We really believe we need to have a set of bundled solutions."

NorthPoint's service, which uses standard copper phone lines to deliver Internet access at speeds up to 1.5 mbps (megabits per second), is available in 10 markets. The company expects to offer DSL in 15 new markets by the third quarter of 1999. Brophy said Verio may also offer service in future NorthPoint markets.

A competitive local exchange carrier, or CLEC, NorthPoint leases copper wires known as "local loops" from the incumbent local phone company in its markets.

In addition to Verio, strategic investors in NorthPoint include Intel and @Work, the business unit of @Home.