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SBC gets up to speed

Nation's largest DSL provider tries different tactic to lure new customers--raising upload speeds.

In an attempt to differentiate itself from its cable rivals, SBC Communications on Monday said it has boosted upload speeds for its broadband Internet customers.

Customers of SBC Yahoo DSL Express now get an upload speed of 256kbps, up from 128kbps. For its more expensive DSL Pro tier, SBC has raised uploads to 416kbps from 384kbps. By late fall, SBC says, it will have raised DSL Express and DSL Pro upload speeds further, to 384kbps and 512kbps, respectively.

The move by SBC, the nation's largest DSL provider, is unique--at least in recent years. DSL companies have pursued a price-based strategy rather than the speed-based approach cable providers have marketed. Local phone giants such as SBC and Verizon Communications have cut their monthly DSL fees, while Comcast, Time Warner Cable and other cable providers have nearly doubled their download speeds.


Our reporters' take on what's
happening in broadband.

SBC hopes that raising upload speeds will attract customers who want better performance when sharing photos or playing online games. But there are questions as to how much the millions of Americans considering upgrading to broadband look at upload rates.

"I wouldn't say upload speeds will be a major differentiator for most customers," said Jim Penhune, an analyst at Strategy Analytics. "People understand download speeds are the main event, and that's going to enable most of the compelling applications that people are aware of, like file sharing and downloading music."

SBC's DSL Express package offers download speeds between 384Kbps and 1.5MB per second; DSL Pro promises download rates from 1.5MB to 3.0MB per second.

Regardless of whether upload speed matters, SBC's strategy of aggressive price promotions seems to be working. Last quarter, SBC added 315,000 new DSL lines for a total of 4.3 million subscribers, up from 304,000 added last year. SBC is now the nation's second-largest broadband provider--behind Comcast, which has 6 million subscribers.

SBC and other Baby Bells have reduced their monthly fees in hopes of attracting customers who would otherwise go to cable. SBC offers its DSL Express for $26.95, the lowest among the major players. In contrast, cable providers charge about $45 a month for their service.

Despite the price gap, cable continues to outpace DSL in overall market share. Cable companies have distanced their lead by bundling broadband into their video programming and voice services to create a "triple play" package in one bill. The Bells have also followed suit by striking deals with satellite TV companies and adding mobile-phone deals to their packages.