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Free DSL takes step closer to market

The Broadband Digital Group says it will kick off the trial version of its free digital subscriber line service early next month.

The prospect of free high-speed Internet service is moving a little closer to reality.

The Broadband Digital Group, which made headlines last month by promising to provide free digital subscriber line (DSL) service nationwide, said today it will kick off the trial version of its program early next month.

The company will test out an early version of its service with about 500 people in six major metropolitan markets, said company chief executive Ryan Steelberg. The company has signed agreements with DSL providers in those areas to provide the service, he added.

"We're already about two weeks ahead of schedule across the board," Steelberg said.

The move comes as high-speed Internet prices already are falling, as telephone companies seek to jump-start consumers' use of the service. SBC Communications yesterday dropped its prices to just $39.95 a month for DSL service and waived start-up fees that could range close to $300 per person.

DSL is a technology that allows ordinary telephone lines to handle traditional voice calls and high-speed Internet traffic simultaneously. It's the primary competitor to cable modems, which still have a substantial market lead among consumers.

Steelberg is hoping that his service can take advantage of falling equipment prices and revenue streams from such services as voice-over-DSL and streaming video--along with simple advertising--to support a consumer cost of zero. In return, consumers will have to give up considerable amounts of privacy, letting the service track their actions online in order to provide highly targeted advertising.

Free services have proven extremely popular in the dial-up world, although no free ISP has yet to turn a profit. This has kept some analysts skeptical of Steelberg's business model. He says he's having little trouble attracting financial backers, however. A $20 million round of funding is close to being completed, with a third round of funding on tap for later this year, Steelberg said.

The company said it has had about 425,000 people sign up for the service to date. The initial trial markets will include Atlanta, Boston, Chicago, Dallas, Los Angeles and Seattle.