Verizon/SpectrumCo Critics Hammer Telco Over DSL Decision

DirecTV argues that dropping DSL broadband service continues the pattern of abandoning initiatives that compete with cable
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Verizon's decision earlier this month to discontinue
standalone DSL service has provided ammunition to critics of its deal to buy
advanced wireless spectrum from cable companies (SpectrumCo).

DirecTV Wednesday sent a letter "expanding on its
concerns" about associated commercial marketing agreements between Verizon
and the cable operators. DirecTV complains that it was working with Verizon on
a next-generation fixed wireless broadband product that they would jointly
market with DirecTV's video bundle, a project that was abandoned, DirecTV says,
after Verizon entered into the agreements with cable operators to jointly
market wireless and video services.

It argues that dropping DSL broadband service
"continues the pattern of abandoning initiatives that would compete with
cable."

On another front, Sen. Herb Kohl (D-Wis.), chairman of the
Antitrust Subcommittee and a critic of the SpectrumCo deal, has written to
Verizon seeking answers on why it chose to scrap standalone DSL and the timing
of the decision.

"It appears inconsistent," said Kohl, "for
Verizon to argue on the one hand that the joint marketing arrangements and
bundling wireless services with cable offerings increases customer choice,
while on the other hand the company is tying voice and DSL services."

"As we have explained, our decision to adjust the way
we offer DSL service after May 6 more accurately represents the broadband
customer base at Verizon," said Verizon. "The vast majority of our
DSL customers enjoy it as part of a bundle with reliable home voice and TV
service. By bundling, customers receive a better overall experience and value
by having multiple services as part of a package.

"By discontinuing a standalone DSL offer after May 6, we are
meeting the needs of our customers and can control our cost structure more
effectively, enabling us to continue providing competitively priced services to
existing and new customers.

"New DSL customers going forward will be getting the best
value we can offer for the service even with voice added.  There will be
no changes to service for all existing DSL customers. We also proactively
provided existing customers a 30-day advance notice to make speed upgrades or
downgrades to their existing service if they choose to do so."

The company had no response to the DirecTV letter at press
time.

Verizon has proposed paying approximately $3.9 billion to
Comcast, Time Warner Cable, Bright House and Cox for advanced wireless spectrum
the cable operators say they did not have a business case for building out into
a competitive broadband wireless service.

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