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Has Verizon Made Its Last DSL Boost?

With relatively low investment dollars, Verizon offers DSL customers download speeds of up to 15 Mbit/s, but is this the last upgrade?

August 30, 2010

3 Min Read
Has Verizon Made Its Last DSL Boost?

For some 4 million households that can't get FiOS, Verizon Communications Inc. (NYSE: VZ) is now offering the option of Internet access speeds of 10 to 15 Mbit/s. This new service doesn't represent a new investment by Verizon is its copper plant, just an incremental improvement.

The faster access services are being offered to customers served by Verizon Central Offices already equipped with either Alcatel-Lucent (NYSE: ALU) or Adtran Inc. (Nasdaq: ADTN) ATM Subscriber Access Multiplexers that can support ADSL 2+, says John Schommer, director of broadband product development for Verizon. In some cases, the new service won't even require a new modem on the customer end.

"If we knew we had the proper type of equipment to support higher speeds, we turned it up," Schommer says. "Through the end of the year, we are investing a little bit in some preferred locations. But compared to the investment in FiOS, this is a very small amount of money being spent on DSL."

The boxes being used are Alcatel 7300 ASAMs and Adtran Total Access 5000 ASAMs. If a consumer has an older DSL modem, that may also need replacing, Schommer says, but newer ones can support ADSL2+.

Verizon will not be deploying VDSL technology, because the costs of building out fiber nodes closer to the customer to deliver VDSL aren't favorable versus a complete fiber build. But Verizon does want to offer the highest possible speed to those who can't get FiOS, to facilitate video streaming, telework, and other applications, Schommer says.

This could be the last copper upgrade, unless something new comes along, he adds.

"You never say never," Schommer says. "Every time before, when we thought we were at the end of the road, we found something else."

Verizon is claiming its new downstream service is more reliably fast than similar cable offerings, because ADSL2+ bandwidth is dedicated, versus the shared bandwidth of cable modems. The other advantage of ADSL2+, Verizon claims, is that it's better at handling line impairments such as bridged taps, reducing the need for line reconditioning.

Because of their limited availability, Verizon isn't likely to do any major media advertising of the new speeds, which cost as little as $50 a month for consumers who also buy voice service, and as much as $100 a month for businesses that don't want a term contract. But mail and phone solicitations will be going out to the appropriate addresses.

"If a customer can get FiOS, we are pushing FiOS," Schommer says. "If they say no, they'd rather stick with DSL, then we'll offer them this option. It's sort of a backup plan."

Many of those likely to be attracted to the offering live in neighborhoods not touched by FiOS and not likely to be, as Verizon winds down its fiber-to-the-premises buildout.

"Our business case is pretty conservative, but I think we are going to see pretty solid results with this," Schommer says. "We anticipate several thousand sales even the first month."

— Carol Wilson, Chief Editor, Events, Light Reading

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