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Verizon DSL not ready to go 'naked'

Carrier doesn't expect to meet an early 2005 goal of selling broadband without requiring a local phone line.

Ben Charny Staff Writer, CNET News.com
Ben Charny
covers Net telephony and the cellular industry.
Ben Charny
Verizon Communications is backing down from plans to sell early next year high-speed Internet service without requiring a local phone line from the company.

A mass market launch near the start of 2005 seemed plausible last February when the carrier tested standalone DSL. But unspecified technical challenges have stretched that timetable, a Verizon representative said recently.

"It's December, and it's not ready at this time," a Verizon representative said. "We're still working on it."

The apparently mired launch highlights how Verizon and the three other major local phone companies are reeling from defections to cellular and Internet-based phone services. Traditionally, the so-called Bell companies sold DSL as part of a package with local phone service, and customers who switched local phone providers risked losing their DSL service.

As Verizon's example shows, the shift from the old business model is taking place at a glacial pace among the nation's four major local phone companies, known collectively as the regional Bell operating companies. The Bells say the plodding pace of change is mainly due to the increasing importance of service bundles, in which satellite TV, broadband, and cellular and local phone services are dramatically discounted if purchased together.

Consumer groups say without standalone broadband--otherwise known as "naked DSL"--the Bells lock customers into services. The groups hail Cox, Comcast and other major cable operators that already sell standalone broadband for about $10 a month more if it's not purchased in a bundle.

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BellSouth sells naked DSL in Georgia, Kentucky and Florida, but that is not by choice. The operator is under orders from public utility regulators. "At this point, we just don't believe it's the right move for us," a BellSouth representative said in regards to expanding. "We've looked at it, but we have no plans to offer it at this time."

Not all Bells are resistant. Qwest was the first to sell standalone broadband, charging $32 a month. Broadband with a Qwest local phone line is $27 a month. A Qwest representative said naked DSL is a means of doing business with Qwest customers who are dropping phone lines in favor of cell phones. "They need high-speed Internet access," the representative said.