Ameritech takes DSL leap - finally

Ameritech made its move into the digital subscriber line market after months of waiting for the right time, while its incumbent friends have gotten a running start. The company also announced a series of cable tests that takes aim at AT&T's claim that using multiple Internet service providers over the same cable plant is not feasible.

Ameritech's DSL entry strategy is to deploy lines as quickly as possible. The carrier plans to pass 3 million homes by the end of this year, 7 million by the end of 2000 and 8 million by the end of 2001. The Chicago rollout is scheduled for the third quarter.

The company also penned a multiyear deal with the consumer Internet powerhouse America Online, under which AOL will resell Ameritech's asymmetrical DSL lines to its customers, an important agreement for Ameritech.

"We said all along we would provide the service based on demand, and now we have a customer that will aggressively market the product," said Tom Richards, executive vice president of consumer information products.

On the cable side, Ameritech announced tests with AOL in Chicago that aim to disprove AT&T's one system/one ISP theory. "We don't buy the position that it is not technically feasible to offer customers more than one ISP over cable," said Richards.

Such a move may be a bad turn strategically for a company that is just entering the high-speed market, said Laurie Falconer, DSL analyst with TeleChoice. "I have never understood why big companies thumb their noses at each other by spending marketing dollars, when they should be focusing on strategies," she said. "They need to put all their resources into DSL and move forward that way."

While Ameritech struggles to get started, U S West said it has signed 50,000 customers for its MegaBit DSL service, picking up an average of 500 customers per day.