Covering all bases U S West cuts DSL price, plans Web phone offer

Looking to extend its Internet service to consumers without access and simultaneously defend the high-speed market against cable modems, U S West announced last week that it would begin deploying Web phones and slash the price on its lowest speed digital subscriber line service.

In its most aggressive move yet, the regional Bell operating company will offer Internet service providers its 256 kb/s asymmetrical DSL for $29.95 a month. On the retail side, U S West.net will bundle its access service with DSL for $47.95 a month.

"We've moved out of the early adopter phase and into the early majority phase," said Michael Rouleau, vice president of marketing for U S West !nterprise Networking.

The move establishes U S West as the lowest priced DSL provider among large U.S. telcos (see figure). Others, though, likely will follow.

"In the consumer market, I think the U S West price is about right," said Jeff Bolton, director of GTE's ADSL program.

In a further effort to drive DSL into the consumer market, the company will sell modems in selected Circuit City stores. The carrier will also guarantee that customers will be able to install their own service. In the early stages of rollout, about 90% of MegaBit customers installed service without help.

U S West.net currently aggregates broadband content from several sources but is looking to some applications that would take advantage of DSL's speed and guaranteed bandwidth, said Eric Bozich, vice president of Internet services application development for !nterprise. "We want to be able to provide content for the broadband and always-on environment, and those are two distinct environments."

For those who don't want a PC, the company will roll out Alcatel's WebTouch One Web-Phone this fall. The units include a touch-screen and small keyboard. To access the Internet, users push one button on the touch screen, which can be configured with several brand logos and ads.

"There's a huge population of people that haven't hopped over the Internet wall yet," said John Vieira, senior director of business development for Alcatel's professional and consumer division.

Alcatel's latest Web phone is still in beta testing and isn't intended as a lifeline phone, though such a model will be available soon.