Paul Kapustka's Blog
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June 17, 2006
The 'Naked' truth from AT&T -- DSL is really expensive
It's so sad, it's funny: As part of its bargaining to get California to approve its takeover of AT&T, the company formerly known as SBC agreed to provide naked DSL, or broadband service without having to purchase a companion telephone line.
According to the San Francisco Chronicle, the service has recently been rolled out. Your savings, should you wish to ditch your phone+DSL combo for just DSL? One dollar per month.
Now you may see why we trust the opinions of Stifel, Nicolaus analyst and former FCC chief of staff Blair Levin so much: In the same story linked above, Levin noted that requiring naked DSL without any price controls was to pass something the telcos would laugh at. To wit:
"If naked DSL does not include a price regulation, the ILECs will simply re-price the bundle [of DSL and phone service]," said Blair Levin, a former FCC chief of staff who is now a telecom analyst for Legg Mason.
Actually, it turns out that Blair gave the ILECs too much credit. Instead of repricing the bundle to match their DSL "price" of $19 or so a month, they just... increased the price of standalone DSL to match what the bundle typically costs, around $45 per month.
Winner, of the "Ed will love the way I said this" AT&T employee of the month award was the spokesperson quoted in the Chronicle story, who said:
AT&T spokesman John Britton said the standalone price accurately reflects the real cost of DSL, and highlights the value the company places in its bundled service."Bundled services continue to deliver the greatest value to consumers," he said. "Most standalone services will have higher prices than bundled service."
So... are they saying that AT&T's discount DSL pricing is just a bait and switch, and then when they have killed off all competitors we will all be moved to paying "the real cost of DSL?"
But sure, go ahead and trust the telcos on keeping the Internet open. Just don't ask how much it will cost.
Posted by paul at June 17, 2006 09:47 PM