Verizon To Expand DSL Service

April 11, 2003
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MUSKEGON — Verizon Communications Inc., at a time when demand is growing, plans to expand DSL Internet service throughout the rural and suburban portions of its service area in Michigan.

By the end of the summer, new technology that Verizon plans to deploy will greatly increase the current 3-mile limit from switching stations where DSL is effective and available. The investment will equip thousands of additional phone lines in Michigan to handle DSL for residential customers and small businesses, said John VanWyck, Verizon’s Muskegon-based director of external communications in Michigan.

Verizon, the second-largest provider of local telephone service in the state, has a little more than 800,000 phone lines in Michigan, including Muskegon and Allegan counties and a small portion of northeastern Ottawa County.

About 140,000 of Verizon’s customers statewide, or 17.5 percent, have phone lines equipped to handle DSL, although the number of people actually ordering the service is “quite low,” VanWyck said. The new investments that Verizon has planned will make DSL available to another 50,000 residential and small business customers in Michigan, he said.

The initiative, part of a broader corporate push by Verizon to expand the availability of broadband service nationally, comes at a time when the Baby Bells are under criticism for not deploying DSL fast enough to fill existing service voids in suburban and rural areas

VanWyck agrees that DSL rollout has been “relatively slow” in Michigan, a situation he attributes to a market demand that has only recently evolved and the corporation’s ability to finance new technology investments.

“This is an ongoing project. We haven’t stopped,” VanWyck said. “As market demand and our capital budget allows us to handle it, we are making investments.”

The corporation’s announcement in late March that it planned to increase DSL availability nationwide by 30 percent — from 36 million to 46 million phone lines — in the suburban and rural communities it serves came just three weeks after the Federal Communications Commission said it planned to ease regulations requiring Baby Bells to provide rivals access to their high-speed, fiber-optic networks to offer broadband Internet services.

The timing of Verizon’s announcement was no coincidence, Van Wyck said, and served to reinforce the telecommunications giant’s intention to further deploy broadband service.

“We are in fact doing this and not waiting in the weeds,” VanWyck said. “We have got to make the investments to keep our customer base.”

About 19 million U.S. households had high-speed Internet service at the end of 2002, mostly through DSL or cable modem service, according to Forrester Research, a Cambridge, Mass.-based research firm. That’s expected to grow to 40 million households by the end of 2004 as consumers increasingly embrace the higher connectivity offered through broadband, Forrester says.

A research report Forrester published last October cited the higher cost of broadband as the top reason consumers hesitate switching from dial-up service to broadband, although people are more apt to sign up and pay more for broadband once they experience it. Verizon’s DSL service runs $39.95 per month for a connection speed of up to 786 Kbps.

Verizon’s push to further deploy DSL in its rural and suburban markets in Michigan appears in contrast to SBC Communications Inc., the largest provider of local telephone service in the state with about 4.3 million of the 7 million phone lines. SBC executives have indicated the company is not planning any major network investments anytime soon that would expand DSL availability in Michigan.

SBC blames the other part of the FCC’s February ruling that retained state regulators’ ability to regulate the wholesale rates that Baby Bells charge alternative service providers to lease space on their telecom networks and offer a competing local phone service.

SBC claims it loses money on the current wholesale rates, which in turn hinders the company’s ability to invest in network upgrades needed to expand the availability of broadband services. SBC is awaiting a final order from the FCC before deciding how to proceed, spokeswoman Denise Koenig said.

The order “provides a road map” for the company by offering a review of the status of competition within the telecommunications industry, she said.

SBC has been rolling out DSL service in selected markets since 1999, although the deployment has gone slower than anticipated because of the economic downturn and cost issues involved, Koenig said.

“We’re just doing it on a more measured approach than we had planned,” Koenig said. “We’re trying to bring it to as many people as we can, but there are people that are going to be beyond the reach. That’s just the nature of the beast.”

Fifty-nine percent of homes and businesses in Grand Rapids have DSL available from SBC. Across Michigan, DSL is available in 55 percent of SBC’s service territory, Koenig said.

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