MCI puts rhythm into DSL strategy

MCI WorldCom filled out its digital subscriber line strategy last week, announcing an agreement with Rhythms NetConnections, the Englewood, Colo.-based DSL aggregator.

Under a multiyear, non-exclusive deal announced at ComNet, Rhythms becomes MCI WorldCom's preferred supplier of DSL-based solutions with the agreement extending to 100,000 lines. Additionally, MCI will purchase 7% of Rhythms for $30 million. Rhythms, which launched service in 11 markets last year, will continue distributing its DSL products through other carriers.

MCI meanwhile will get instant entry to those markets while it continues its own local buildout with other alliances. "We're actually hoping to talk to all the [competitive local exchange carriers]," said Jim Demerlis, vice president of enterprise and data markets for MCI.

Through its Rhythms connection, MCI will be able to target small businesses that might otherwise slip under its normal sales radar. Company officials also hinted that DSL might be an entry into Internet protocol telephony.

"It's getting a lot of play because it's DSL, but for us, it's just another way of expanding our On-Net footprint," said Roberta Myers, director of access product management for MCI.

Covering 11 markets, however, is just scratching the surface, said Claudia Bacco, president of TeleChoice. "This is their first foray into resale. They're probably giving Rhythms more credit than they deserve in that they're going to be in all the markets they want to serve."

* Boston * Chicago * Los Angeles * New York * Oakland, Calif. * Orange County, Calif. * Philadelphia * Sacramento * San Diego * San Francisco * San Jose