Verizon links Wi-Fi to DSL--for free

Verizon today announced the launch of a free WiFi network in New York City for its consumer and business DSL customers in an effort to lure more people to broadband. The service launched today with 150 hotspots in Manhattan installed in Verizon payphones. The carrier plans to deploy annoy another 350 this summer and end the year with 1000 Wi-Fi hotspots broadcasting on the densely populated island.

Coupled with its new rates below $35 a month, the addition of MSN’s portal and premium content and boosting its basic throughput rates up to 1.5 Mb/s, Verizon said it now offers the most comprehensive broadband package in the industry. Verizon officials said the new initiatives are geared toward driving penetration especially in the face of cable’s dominance in the broadband market. And while the initial Wi-Fi deployment is limited to New York, Verizon plans to use it as a test case in deciding whether to extend that network to its other Verizon Online major metro markets.

“This is a totally new approach that moves us to a next generation broadband strategy,” said Lawrence Babbio, Verizon vice chairman and President of Verizon’s Telecom Group. “We believe broadband is poised and ready to move from its original market of early adopters to the mass market. … We intend to seize this opportunity and the high ground.”

The move represents a complete reversal in the way carriers have thought about broadband. Instead of trying to find a way to make Wi-Fi pay, Verizon is looking to use Wi-Fi to make people pay for DSL. Bruce Gordon, Verizon Online president of retail market groups, said the ISP is approaching Wi-Fi as an enhancement to service not as a service itself. Verizon doesn’t expect to collect any revenue off of the network and has no plans to offer a separate paid service separate from Verizon online DSL. The free Wi-Fi access to all DSL customers will make customers more loyal and in turn reduce churn off of Verizon’s networks. Combined with its national price and content initiatives, free Wi-Fi will provide customers with a lot of incentive to sign up for DSL for the first or leave an existing cable provider.

Verizon’s Wi-Fi network will run separately from sister company Verizon Wireless’s Wi-Fi moble data network though Verizon officials said they would consider roaming agreements between the two if the New York pilot is successful.