BellSouth Forges DSL Deal With Telocity

Incumbent local exchange carriers can be the good guys, after all. Telocity, a broadband service provider, struck a deal with BellSouth yesterday to sell Digital Subscriber Line services in all of BellSouth's territory.

Incumbent local exchange carriers can be the good guys, after all. Telocity, a broadband service provider, struck a deal with BellSouth yesterday to sell Digital Subscriber Line services in all of BellSouth's territory.

The deal is remarkable because it illustrates that the threshold to enter the broadband services market is not as high as it might seem. Cupertino, Calif.-based Telocity is a good example of a start-up Internet service provider breaking into this space by leveraging existing demand for the Digital Subscriber Line (DSL) service and last-mile networks built out by incumbent local exchange carriers (ILECs) and competitive local exchange carriers (CLECs) alike.

"The problem with ILECs is that very often they are viewed through CLEC eyes - and CLECs are the other copper guys competing with these companies," said Dean Tucker, Telocity's vice president of sales and marketing. "We like working with BellSouth, mainly because we are their customer and we eliminate the xDSL wait for them - wait watchers, that's what we call ourselves."

The big advantage of Telocity's xDSL service is that its costs less and takes less time to set up. At $49.95 per month, Telocity offers customers a free DSL modem and allegedly easy-to-follow installation procedures.

"The only truck that rolls in our model in the big brown UPS truck," Tucker said, referring to so-called "truck rolls" - expenses that ILECs and CLECs incur when technicians come out to customer's homes or offices to physically install DSL lines and modems. Tucker claims that connecting Telocity's DSL modem is as easy as hooking up a printer and can take as little as 15 minutes.

While Telocity's service competes with BellSouth's own xDSL service, Telocity also is a big customer of BellSouth's DSL loops. Telocity's management plans to repeat this rollout with several other carriers - that Tucker refused to name - in other regions. The final goal is to have Telocity's services available in all major "NBA and NFL cities," according to Tucker, by the year 2000. Telocity will connect all these markets with its own OC-3 (155-megabit-per-second) backbone.

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