Verizon Drops DSL Fees
Latest deal cuts monthly costs for do-it-yourselfers, and plugs retail partners.Tom Spring, PCWorld.com
Do-it-yourselfers can shave 20 percent off a monthly Verizon Online DSL bill by using a self-installation kit, in the latest round of customer-luring broadband service offers.
Verizon's deal is offered only through participating Best Buy retail stores. Customers buy a $130 DSL self-installation kit and pay Verizon $39.95 a month instead of the regular $49.95 monthly charge for 768-kbps downstream and 128-kbps upstream service.
The deal is available at in-store kiosks at Best Buy stores in Delaware, Massachusetts, Maine, Maryland, New Jersey, New Hampshire, New York, Pennsylvania, Virginia, and the District of Columbia.
Dangling Discounts
Congress continues to ponder the appropriate level of regulation to promote broadband and lower its costs. But Verizon's move is the latest example of the kind of deals providers are experimenting with to lure customers.
Previously, the cheapest Verizon Online DSL do-it-yourself package offered a free DSL modem and a $49.95 monthly service fee. Because the new deal has an up-front charge, takers will pay their Verizon bills for about a year before the reduced fee pays off. For a limited time, though, the deal is sweetened with a $30 mail-in rebate on the DSL modem from manufacturer Westell, and no charge for the first month of DSL service.
The self-install kit contains a Westell WireSpeed DSL modem, filters, and software for home users feeling tech-savvy enough to take on the job. You'll need to provide a network interface card, however.
Analysts say Verizon's pitch is a smart way to deter fly-by-night DSL customers who collect a free modem and quickly cancel the service. It costs DSL providers about $600 to acquire a new customer, according to The Yankee Group. Verizon is cutting those acquisition costs by making customers buy the modem and install the service themselves.
"By getting consumers to buy the modem, you are tying them to the service," says Imran Khan, senior analyst at The Yankee Group.
Promoting Partners
Retail kiosks have become popular with competing broadband providers. Microsoft is marketing its MSN broadband offerings at Radio Shack, and Comcast Communication is pushing its cable modem service in Circuit City stores. In fact, Verizon is joining other broadband providers already marketing their services inside Best Buy stores.
"We want to be a one-stop shop for helping you find out what your broadband options are," says Kris Bowring, Best Buy's senior product manager for Internet services. Best Buy also markets EarthLink, MSN, RoadRunner, and DirecTV DSL service.
"Broadband has become more and more successful for us over the past two years we've started selling service," Bowring says.
Self-installation kits for cable and DSL providers are also a popular way for broadband firms to avoid costly "truck rolls." That's when a technician has to visit your home to install broadband services.
Bell Atlantic, which merged with GTE to create Verizon, was one of the first to offer a do-it-yourself Infospeed DSL kit. It was sold at participating CompUSA stores beginning in 1999. However, early tests found that initial attempt at a self-install kit riddled with problems.
Verizon says it has ironed out most of the kinks of DSL installations and service. The company says 90 percent of its DSL customers say they are now satisfied with Verizon Online DSL service. That's a marked improvement from a year ago, when only 45 percent said they were satisfied, according to Briana Gowing, a Verizon spokesperson.