There is more than one way to skin cable cats. Both Veirzon and SBC continue to crow about residential fiber plans, but those networks are years away from materializing in scale. However, today SBC took a real shot at cable's Achilles heel -- dependency on high-priced cable modem services for revenue and cash flow growth -- in announcing an incredibly aggressive DSL pricing program.
Effective June 1, SBC lowered the price of its SBC Yahoo! DSL Express service, which offers access speeds up to 1.5 Mbps, to only $14.95 per month for new customers who order the service online with a one-year contract. That's one third the price of most cable modem service offerings and even cheaper than the dial-up plans of leading ISPs like America Online and EarthLink.
The promise of saving as much as $30 a month may entice plenty of cable modem subscribers to switch to SBC DSL. And with broadband cheaper than narrowband, dial-up customers may readily make the leap too.
MSOs gripe that SBC's pricing tactics are sheer insanity. Actually, the Bell's moves are completely rational. Stealing customers from cable with DSL discounts is far cheaper than building new fiber networks, and it helps SBC retain phone subscribers in the face of cable's aggressive VoIP rollout.