I WANT MY DSL TV

The first-quarter subscriber numbers on DSL are trickling in, and things appear positive — particularly for Bell companies trying to catch up with cable operators' lead in residential broadband. SBC reported more than 400,000 net additions, while Verizon chalked up more than 340,000 on the quarter. Even little North Pittsburgh Systems reported a 29% jump in DSL lines over the past 12 months. But behind the positive numbers hides an ugly fact: Average revenue per user, which quickly is becoming a fashionable worry within the wireline world, is falling even with broadband growth. Price cuts and aggressive marketing are a start in getting DSL subscribers. Keeping them, and getting them to pay for premium services, means providing something more than a fast conduit to Yahoo or MSN content. It requires serving up video in competition with cable. The hesitation by large telcos to dive into video is understandable. No large-scale business model has been proved, and significant technological shifts seem to occur quarterly. Signing agreements with the likes of EchoStar and DirecTV are only holding places. Playing footsie with satellite providers, no matter how genuine the back office integration effort, is a dangerous game. While it does get telcos into the video game, it offers little in the way of true revenue enhancement. And given the mercurial heads of the major DBS providers, a scenario in which their partners suddenly leave telcos at the curb isn't far-fetched. If big telcos are serious about holding the line against encroaching cable competition and stabilizing ARPU, current DSL gains must be leveraged.