Some ISPs have given up on the idea of ever providing DSL services for profit. But the fact is that Verizon wouldn't have a million DSL users without wholesale help from local ISPs reselling its services. Somebody must be making some money reselling DSL access—somewhere.

by Jim Wagner of internetnews.com [October 30, 2001]

There was a number overlooked by most analysts after Verizon Communication's mid-month announcement that it had finally attained a broadband milestone—one million digital subscriber (DSL) users.

While reporters and analysts were grilling Verizon Senior Vice President of Advanced Services Keiko Harvey and Veronica Pellizzi, Verizon Internet and data services group president, over the telecom company's attempts to boost its DSL provisioning rate by years end, most overlooked an intriguing number thrown out to the media—lost almost as an aside.

Pellizzi, responding to a question from another analyst, said that between 30 and 40 percent of its one million DSL customers were sold through wholesale contracts.

This means that between 300,000 and 400,000 of Verizon's one million customers are handled by providers that aren't called Verizon Online.

No contest
In spite of Verizon's attempts to undercut DSL pricing on independent ISPs and forgetting about all the delay tactics—missed appointments, faulty billing, inflated tariffs, and lost orders—customers keep provisioning lines through local ISP businesses. Verizon is actually banking on independent ISPs to keep their DSL numbers growing.

This certainly didn't seem to be the way many industry experts thought the competitive landscape would look. Most analysts expected that ISPs and CLECs would give up on the technology, leaving the Bells the uncontested winners in residential DSL services. Many still do.

In fact, many ISPs seemed to have given up on the whole DSL reseller model entirely. While I was attending ISPCON at the beginning of this month, most DSL wholesalers—with the notable exception of Tier 2/Tier 3 market focused New Edge Networks—said interest in providing DSL service is anything but hot. Most of the sessions involving DSL technology were woefully empty at the fall gathering in Las Vegas. Although, to be fair, the sessions for cable ISPs were just as sparsely attended.

Service value
But the Verizon wholesale numbers paint another picture beyond market domination. Just because companies like Verizon and SBC's minions—Pac Bell, Ameritech, and the like—are making it difficult for customers to find rival high-speed providers, many wanna-be DSL users still turn to a local or regional ISP for high-speed access, rather than a big telecom company.

Of course, it's all Baby Bells at the end of the line, isn't it?

For end users, it's a no-brainer. Many don't know or don't care, who is behind the line of their high-speed access. Customers just want someone they can reach—someone to pick-up the phone—they want service. Who better than a local ISP to provide this level of customer interaction?

Even Verizon acknowledges they've given some pretty lousy service when it comes to provisioning DSL services.

"We have made tremendous strides in the areas of provisioning and customers service that are critical to customer satisfaction," Harvey said. "We've come a very long way with DSL in a very short time."

Except it might already be too late.

Perhaps it's time to re-examine your DSL strategy and grab a piece of the local market that's waiting for you. Big Bell's dismal service records just might make reselling DSL access a profitable broadband venue in your service area.

— End