THE BROADBAND RACE

When SBC and Verizon began drastically dropping the price of their monthly DSL services last year, the broadband marketplace fell into a predictable pattern. Common wisdom was that if the cable companies were competing on speed, the RBOCs would compete on price, offering service as low as half what many of the cable operators were selling. But last week SBC turned that wisdom on its head. It began tiering upward, offering speeds as high as 3 Mb/s for prices that still fell well below $40 per month. DSL probably can't catch up to cable's overall bandwidth lead, but it's starting to get close. The new SBC service is guaranteeing speeds that start at 1.5 Mb/s — much higher than its 384 kb/s standard guarantee — and its 3 Mb/s top speed is getting dangerously close to the 4 Mb/s that most cable operators offer. Cable operators have already dropped prices over the last year to meet upsurge in DSL marketing, but they've never gotten down to that $30 bracket that fueled DSL's growth over the last few quarters. Promises of better customer service and faster connection speeds allowed them to remain semi-aloof. But if SBC's initiative triggers similar announcements from the other RBOCs, cable may lose one of its big marketing advantages. Neither side has really distinguished itself with content, so it's still a game of speed and price — and DSL now appears ready to compete on both.