CLECs punch DSL gas pedal

Sensing that the window of opportunity is open as wide as it ever will be, competitive local exchange carriers are getting aggressive in the digital subscriber line market.

Last week both Covad Communications and Verio Inc. announced product expansions that should open a host of potential new corporate customers to high-speed access services.

Working off its relationships with AT&T and Qwest Communications, Covad launched a service that provides remote DSL interconnections between corporations, remote offices and teleworkers. TeleSpeed Remote's pricing puts it in the market as a cut-rate alternative to ISDN, frame relay and other dedicated line services. Additionally, the company is hoping to make a dent in the dial-up market, which is the method most remote offices use to connect back to headquarters.

"We're trying to make it very affordable for people that might be using other solutions," said Eric Moyer, product manager for Covad. "If you look at the cost of doing a remote connection, even in a dial-up world that local loop is pretty negligible compared with the long-distance portion."

The service, which provides access from 144 kb/s to 1.5 Mb/s, connects users via DSL to a Covad point of presence. Data is then sent across either an AT&T or Qwest backbone and delivered to the Covad network at the new location. Security is handled by remote clients, which use an individual Layer 2 virtual circuit. No encryption, authentication or tunneling hardware or software is required, although customers can implement these independently.

Currently, Covad is rolling the service out in eight markets and anticipates covering 28 million potential users in 22 markets by the end of the year.

In a separate announcement, Verio said that it is expanding its relationship with NorthPoint Communications to launch DSL service in 13 more markets. Additionally, the Englewood, Colo.-based CLEC said it took an additional $4.4 million equity stake in NorthPoint, raising its total investment to $10 million.

"This is phase two of the Northpoint rollout," said Sean Brophy, vice president of corporate development for Verio, noting that while NorthPoint is its preferred provider, the company also has partnership arrangements with other Internet service providers, including RhythmsNet.

With the expanded Northpoint relationship, Verio will be able to offer its bundled package of Web hosting, DSL and e-mail in 41 cities.

"What we're finding is people are looking for a complete solution," said Brophy. "At the same time, if someone already has a Web site or doesn't have a need, we'll sell just the DSL."