The Day Ahead: DSL woes could derail telco growth

The Baby Bells and many Internet service providers are hoping Digital Subcriber Line service will boost their growth. Don't count on it
Written by Larry Dignan, Contributor

There are so many DSL hoops to jump through, you have to wonder if broadband is worth the trouble. However, the companies that make DSL service easy will be on to something big.

One of those winners won't be Bell Atlantic, especially if my experience is any indicator. When Bell Atlantic reported earnings last month, it had more than 60,000 DSL accounts. The DSL subscribers doubled, but analysts were disappointed. The company said it will miss its year-end target of 500,000 DSL subscribers by as much as 200,000.

Why are DSL and broadband consumer services so important to telecommunications firms? It's the difference between single-digit growth and double-digit growth.

SBC Communications has been more aggressive and reported 301,000 DSL lines in the first quarter, up 75 percent from the fourth quarter. Although there are complaints about SBC's DSL service in California from colleagues, the company has boosted tech support and customer service. SBC is bullish on the future and maintains it can grow at a double-digit pace.

EarthLink is just getting started and has 45,000 DSL subscribers. For EarthLink and players such as SBC partner Prodigy, broadband services may be the only way to compete with AOL. America Online, via its Time Warner merger, appears be banking on cable, but promises to be on all broadband platforms. AT&T has spent billions to acquire cable companies and is linked with Excite@Home, which also plans DSL service.

The slow DSL starts are not surprising. I've been a guinea pig for DSL-hell -- Bell Atlantic style. If my experience is anything near the norm -- anecdotal evidence says it could be -- it's no wonder why DSL sign-ups are lagging behind.

Here's my DSL dance of the last three weeks:

  • Bell Atlantic gave me three service start dates. The company gave me May 8, May 15 and May 18 as a DSL start date. It's May 24 and I don't have service. I do know a lot of folks on Bell Atlantic's customer service team though. To make matters worse, I moved recently. Each customer service unit has its own database, which may, or may not, have my new address.
  • The software didn't work. An allegedly easy-to-install green disk was supposed to get me running. Instead, it screwed up my old Internet service provider settings and Bell Atlantic's software couldn't be uninstalled. They told me to install a "nuke it" program. It was quite a chicken and egg argument considering I couldn't use my old ISP because my PC's settings were a mess.
  • Nice DSL signal, wrong address. A day after the alleged start date, May 19, I installed the latest software, which I had to order with shipping costs, only to find out my DSL signal was going to my old address.
  • Bell Atlantic's technical, logistics, residential units are baffled. Now the mystery of my missing DSL service is out of control. No one in any of Bell Atlantic's units know what to do. The company has five databases and none of them match. I'd be surprised if Bell Atlantic doesn't miss its 500,000 DSL subscriber quota by half at this rate.
  • Now that I'm growing weary of the tango with Bell Atlantic support staff -- nice people, bad bureaucracy -- I've made a few calls to local ISPs reselling Covad Communications, Rhythms NetConnections and NorthPoint Communications service. I also gave DSL.net a ring.

    The promise of local resellers is obvious. For starters, these ISPs are local and can send tech support to set things up at no charge. In addition, they're smaller, usually well trained and more responsive.

    However, you'll still need a Baby Bell to hookup the line into the home. That usually means at least a four-hour window of time and a 50-50 chance a technician will show up.

    Perhaps, the real growth will be in integration companies that haven't even gone public yet. Venture capital firm Crest Communications has a company in its portfolio that provides outsourced maintenance and installation services for cable and DSL broadband hookups.

    "We're focused on companies that improve the efficiency of the network and provide quality of service," said William Sprague, managing director for Crest. Folks, Sprague could be on to something.

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