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http://www.mercurynews.com/mld/mercurynews/business/14899525.htm
Stand-alone DSL gains favor over bundle with phone line
By Jessie Seyfer
Mercury News
Is your home phone gathering dust? Thinking of ditching it? For AT&T DSL Internet access customers in California, getting rid of that home-phone line just got easier.
This month, AT&T quietly dropped its requirement that DSL customers must also pay for phone service. State regulators forced the company to make the change as a condition of its merger last year with SBC.
However, the savings from dropping a home phone line don't amount to much: AT&T is charging almost as much for its stand-alone, or ``naked'' DSL service as it does for DSL and a basic phone line. Naked DSL costs $44.99 a month, and a basic phone line and DSL together costs $47.99.
Yet analysts say this separation of phone line and DSL service signals a turning point in the unprecedented transformation occurring in the telecommunications world.
More and more people are using cell phones as their main phone, or are exploring Internet-based phone services such as Vonage and eBay's Skype.
Meanwhile, the number of home-phone lines is diminishing. Industry research firm In-Stat predicts that phone companies' revenue from home phone-line sales will drop by 3.3 percent, or several billion dollars, annually over the next three years.
The phone companies' hold on long-distance service has weakened, too, another reason the dusty home phone is becoming a paperweight for many.
``Long-distance revenues are increasingly becoming irrelevant as `any distance' calling plans for wire-line and wireless services take hold,'' said In-Stat analyst David Lemelin.
It's no surprise, then, that AT&T isn't offering huge savings to those who want to drop the phone lines that were once the company's bread and butter, said Mindy Spatt, a spokeswoman for The Utilities Reform Network, a consumer group based in San Francisco.
``The choice for the customer is whether you want to pay AT&T $45 or $45,'' she said. ``I don't think the goal for AT&T is to give people a reasonable choice, it's to monopolize.''
But AT&T says setting that price is a way to let customers know that buying several services at the same time is always the best value, according to AT&T spokesman John Britton. The company is exploring offering its DSL service bundled with its own Internet phone-calling service in the future, and now offers customers of Cingular Wireless, which AT&T will fully own once its merger with BellSouth is complete, a $5 discount on stand-alone DSL service.
AT&T rival Comcast charges $54.95 for stand-alone Internet service, or service that does not include cable TV. However, Comcast's lowest-level Internet service provides roughly four times faster download speeds than AT&T's.
Other phone carriers, including Verizon and Qwest, have started offering naked DSL as well, according to Jan Dawson, an analyst with Ovum industry research.
Despite the fact that carriers are charging as much for naked DSL as they do for phone and DSL together, Dawson expects more and more people will be checking into stand-alone service.
``Anecdotal evidence suggests there is considerable pent-up demand for naked DSL,'' Dawson wrote on his blog recently. ``Now that the news has got out, many of these customers could rush to drop their . . . voice lines in favor of, say, Vonage.''
Bryan Martin, chief executive of Santa Clara Internet phone service company 8x8, said naked DSL is good news for his business. Most 8x8 customers get their Internet access from a cable company, and DSL customers have shied away because they've been required to keep a phone line, he said.
``We're hoping that this will enable us to get more DSL customers,'' he said.
http://www.mercurynews.com/mld/mercurynews/business/14899525.htm
Stand-alone DSL gains favor over bundle with phone line
By Jessie Seyfer
Mercury News
Is your home phone gathering dust? Thinking of ditching it? For AT&T DSL Internet access customers in California, getting rid of that home-phone line just got easier.
This month, AT&T quietly dropped its requirement that DSL customers must also pay for phone service. State regulators forced the company to make the change as a condition of its merger last year with SBC.
However, the savings from dropping a home phone line don't amount to much: AT&T is charging almost as much for its stand-alone, or ``naked'' DSL service as it does for DSL and a basic phone line. Naked DSL costs $44.99 a month, and a basic phone line and DSL together costs $47.99.
Yet analysts say this separation of phone line and DSL service signals a turning point in the unprecedented transformation occurring in the telecommunications world.
More and more people are using cell phones as their main phone, or are exploring Internet-based phone services such as Vonage and eBay's Skype.
Meanwhile, the number of home-phone lines is diminishing. Industry research firm In-Stat predicts that phone companies' revenue from home phone-line sales will drop by 3.3 percent, or several billion dollars, annually over the next three years.
The phone companies' hold on long-distance service has weakened, too, another reason the dusty home phone is becoming a paperweight for many.
``Long-distance revenues are increasingly becoming irrelevant as `any distance' calling plans for wire-line and wireless services take hold,'' said In-Stat analyst David Lemelin.
It's no surprise, then, that AT&T isn't offering huge savings to those who want to drop the phone lines that were once the company's bread and butter, said Mindy Spatt, a spokeswoman for The Utilities Reform Network, a consumer group based in San Francisco.
``The choice for the customer is whether you want to pay AT&T $45 or $45,'' she said. ``I don't think the goal for AT&T is to give people a reasonable choice, it's to monopolize.''
But AT&T says setting that price is a way to let customers know that buying several services at the same time is always the best value, according to AT&T spokesman John Britton. The company is exploring offering its DSL service bundled with its own Internet phone-calling service in the future, and now offers customers of Cingular Wireless, which AT&T will fully own once its merger with BellSouth is complete, a $5 discount on stand-alone DSL service.
AT&T rival Comcast charges $54.95 for stand-alone Internet service, or service that does not include cable TV. However, Comcast's lowest-level Internet service provides roughly four times faster download speeds than AT&T's.
Other phone carriers, including Verizon and Qwest, have started offering naked DSL as well, according to Jan Dawson, an analyst with Ovum industry research.
Despite the fact that carriers are charging as much for naked DSL as they do for phone and DSL together, Dawson expects more and more people will be checking into stand-alone service.
``Anecdotal evidence suggests there is considerable pent-up demand for naked DSL,'' Dawson wrote on his blog recently. ``Now that the news has got out, many of these customers could rush to drop their . . . voice lines in favor of, say, Vonage.''
Bryan Martin, chief executive of Santa Clara Internet phone service company 8x8, said naked DSL is good news for his business. Most 8x8 customers get their Internet access from a cable company, and DSL customers have shied away because they've been required to keep a phone line, he said.
``We're hoping that this will enable us to get more DSL customers,'' he said.
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