BellSouth is broadening the frontlines in the battle for consumer broadband services to the home by further opening up its network for more competition.
The regional Bell operating company announced Monday that it had reached a comprehensive agreement with EarthLink, the second largest Internet Service Provider in the US, that permits the ISP to offer high-speed digital subscriber service line (DSL) service across its entire nine-state coverage area.
BellSouth sees the move as a means to not only drive more traffic and revenues over its own network but also to position it for more intense competition with cable TV companies for consumer Internet users.
“The real combat here is with cable,” Rich Wonders, senior director of broadband strategy for BellSouth, tells Local Tech Wire.
While terms of the deal weren’t disclosed, EarthLink will pay BellSouth fees for usage of its network. By riding BellSouth’s backbone and using BellSouth hardware, EarthLink immediately expands its so-called footprint for DSL services.
Using BellSouth facilities also means EarthLink can provide DSL service across 72 percent of BellSouth’s customer base.
“We lead the industry in percentage of DSL coverage area,” Wonders says.
BellSouth wants to see more people using DSL and its network rather than cable. And the competition between the two types of services is intense. In 2002, nearly 30 percent of US households had broadband access, and that percentage is expected to hit 70 percent by 2008 (64 million homes) by 2008, according to a recent study.
Strategy Analytics reported recently that 62 percent of home broadband users have selected DSL, up from 57 percent in 2001.
In all, there are some 8.2 million DSL lines used in the US.
Federal rules already require RBOCs to provide competitive access to its networks and facilities. Factors helping make this deal unique — and the first of its kind in the industry, says BellSouth — include EarthLink’s greater access to BellSouth services. It can rapidly expand DSL competition without having to invest as much in its own network infrastructure and remote equipment.
“This expanded deal strengthens our relationship with BellSouth, allowing EarthLink to serve more customers who want a competitive alternative when selecting their high speed Internet service provider,” said Gary Betty, chief executive officer of EarthLink in a statement. “This agreement widens our market presence and gives customers greater access to EarthLink’s award-winning service and full suite of features at speeds up to 50 times faster than a 28.8k dial-up modem.”
The move is part of EarthLink’s drive to focus on broadband services vs. dial-up. It has more than 4 million dial-up customers, but subscribers fell 4 percent in 2002.
DSL growth was EarthLink’s bright spot. It has more than 770,000 DSL users, an increase of 64 percent over 2001 totals. And those customers pay much higher fees than dial-up.
EarthLink also is offering voice-over DSL phone call service.
The Atlanta-based ISP also has agreements to offer high-speed cable access.
Wonders points out that the EarthLink deal “in no way changes our posture as a retail network.” Rather, he says the move helps BellSouth and EarthLink provide more competitive choices for broadband.
Wonders also says BellSouth will seek deals with other service and content providers to provide other products over its backbone, such as video and audio streaming.