Verizon plans to expand Internet service

Long Island Business News, Apr 25, 2003 by Claude Solnik

Already known as one of the nation's biggest providers of phone service, Verizon Communications last week said it's launching its biggest bid to date to grow its business as an Internet service provider.

Citing "an improved regulatory environment," Manhattan-based Verizon last week said it will equip 10 million additional home and business lines for high-speed Internet service within a year, bringing its total of DSL-ready lines to 80 percent. The company already has equipped 63 percent, or 57.5 million of its phone lines, as digital subscriber lines.

The company, which in 1999 first began providing high-speed service through DSL, added the expansion would be "primarily in suburban and rural communities."

Verizon also plans to roll out a co-branded high-speed service later this year with MSN, creating a partnership that could shake the Internet world.

Verizon is making the push after the FCC said in February it would loosen regulations on phone companies' high-speed Internet, putting them on a more level playing field with cable companies whose broadband rates are not regulated.

"The FCC said they're not going to burden broadband technologies with the heavy regulation you associate with telephone service for the last 70 years," said Larry Plum, a Verizon spokesman. "That makes this attractive for us to invest in a growth opportunity."

Verizon is taking on cable companies such as Bethpage-based Cablevision Systems Corp. since cable providers have cornered a 70 percent market share of high-speed data service.

Verizon has about 1.83 million customers in 24 states, though it doesn't break that down by region.

Cablevision, through its Optimum Online high-speed Internet service, ended 2002 with about 770,100 high-speed-data customers in New York, New Jersey and Connecticut, including more than 90,100 added during the fourth quarter.

Cablevision expects to end 2003 with at least 1 million high- speed data customers despite Verizon's plan to pump up its broadband business.

"Our business strategy is to deliver the best broadband product in the marketplace," said Bill Powers, a Cablevision spokesman.

It's unclear whether an increased focus on high-speed Internet by Verizon will ignite price wars.

Cablevision charges cable TV customers $44.95 per month for Optimum Online and $49.95 as a stand-alone service.

Verizon charges $39.95 a month with a one-year commitment. The first month is free.

Cablevision charges $44.95 per additional computer, while Verizon has no additional charge for additional computers.

Delays in installing DSL have been a stumbling block for many companies, including Verizon, though the firm says with self- installation kits, it's now able to install DSL rapidly.

"About a year ago, it took about three weeks to get your DSL service," Bobbi Henson, a Verizon spokeswoman, said. "Today our average delivery time is five days."