Dell Offers DSL Through RBOCs

Under new pacts with BellSouth, SBC, and Verizon, customers ordering a new PC are given incentives to buy broadband service from one of the Bells.

by Colin C. Haley of boston.internet.com [January 9, 2003]

If Dell hadn't traded its surfer spokesguy for a gaggle of interns, one could easily envision this tagline from the Austin computer maker: "Dude, you're getting a Dell with DSL!"

Under new pacts with BellSouth, SBC, and Verizon, customers ordering a new Dell PC, either online or over the phone, can opt for DSL service from one of the telecoms, depending on where they live.

For Dell, which has done well despite an industry-wide slump, it's a add-on that compliments its direct sales model and could ring up new sales. The firm is offering a $50 cash rebate to customers who purchase certain models with DSL. Monthly DSL prices, speeds, and terms of service differ.

For the three Baby Bells, it's a new strategy to close the gap between themselves and their cable broadband competitors. Combined, the companies offer DSL in 38 states under the brand names BellSouth FastAccess DSL, SBC Yahoo! DSL and Verizon Online DSL.

"We want to make ordering DSL as easy as getting a Dell," said John Wimsatt, a vice president with New York's Verizon.

As Internet users transition away from first generation dialup service, competition is fierce as providers seek to capture subscribers seen as more desirable. Providers charge more per month for high-speed access. In addition, they can collect additional revnue from premium services by offering music and video, content that would have clogged up slower dial-up systems.

While DSL is dominant in many parts of the world, cable modems are about twice as common in the United States. Point-Topic, a London IT research firm, theorizes that cable's U.S. dominance comes largely from the fact that cable modem technology was developed here and standardized for U.S. cable networks, while DSL has been left largely in the hands of the Baby Bells.

Better execution, combined with an earlier start and good technical support are largely responsible for cable's continued penetration, the firm said.

But DSL providers are working to close the gap through deals like this with Dell. In the coming year, some will also aggressively tout the technical advantages of DSL, which they say does not slow down when neighboring users go online, like cable can.

— End