Verizon announced the expansion of 7 Mbps DSL service to an additional 3.4 million customers across 20 states and the District of Columbia. The move in effect doubles the capacity of Verizon’s most widely deployed DSL service of 3 Mbps. Verizon began the upgrade in January, when they announced its availability with 400K customers.

Vonage announced they will begin marketing DSL service through a reseller arrangement with Covad. The new service will be branded Vonage Broadband, and is expected to be offered by the end of the year. Vonage will offer two DSL packages, one at 3 Mbps and another at 6 Mbps. Vonage states in their press release, “This offering will expand Vonage's competitive position in the marketplace by integrating these services for customers who prefer this option.”

Give Vonage credit – they’re not rolling over and playing dead, despite their considerable and well publicized challenges. This new arrangement may help them address one of their most daunting issues – having to depend on their competitors for a broadband pipe into their customer’s homes. Cable and telecom companies provide the vast majority of access for Vonage to their subscriber base. But of course, those same companies offer competing voice services and aren’t exactly willing transporters of Vonage service. That being said, it’s still a significant stretch for either existing Vonage subscribers to switch broadband service providers or new subscribers to accept broadband from Vonage over the status quo of DSL, cable modem, or increasingly, FTTH. Time will tell if this resale arrangement makes any difference. For Vonage, at least it broadens their scope and capabilities, and gives them a bundle to sell. Who knows, maybe the triple play is next for Vonage. Perhaps Jeff Citron and Charlie Ergen of DISH Network are exchanging emails already.

A new report from Juniper Research suggests that the burgeoning WiMAX opportunity has the potential to take 12% of DSL customers from existing service providers within 5 years. The report’s author Howard Wilcox says WiMAX will be particularly attractive in “…areas where the existing DSL speed is suboptimal.” Wilcox points out, and rightfully so, that WiMAX deployments will start out as fixed broadband wireless deployments, and WiMAX service providers will aggressively pursue existing broadband subscribers. WiMAX will have a competitive advantage as well – portability. Customers will be able to take their broadband access with them, both locally (where coverage is available), and nationally (assuming adequate roaming relationships get established). That advantage will grab the attention of some existing broadband subs.

Of course, this won’t be a “cake walk” for WiMAX providers either. There are several details to be worked out, the most important of which is proving the technology works on a massive scale and can provide the level of service that customers will expect and demand. Wilcox also points out another important one, “Brand identification and service differentiation are major marketing challenges facing new WiMAX operators.” Predictions like this one are sure to multiply in the wake of the recent news of Sprint and Clearwire joining forces with Intel, Google, and the cable industry for a massive WiMAX boost in the U.S. Assuming the deal consummates and the technology works, WiMAX’s impact on the competitive landscape for both wired and wireless broadband cannot be underestimated.

Qwest is apparently quietly rolling out its 20 Mbps broadband service in select markets. BroadbandReports.com is reporting that the new broadband tier is being marketed on Qwest’s website, and also includes a somewhat slower 12 Mbps tier as well. The 20 Mbps broadband tier is priced at $105/month, or $130/month when bundled with a landline. The 12 Mbps tier is priced at $52/month, or $77/month when bundled with a landline.

The new Qwest broadband tiers are a part of Qwest’s $300 million FTTN network upgrade. It’s a far cry from the billions that their larger telco brethren are spending to become triple play capable. Qwest maintains that their partnership with DirecTV is the best triple play path to pursue. They intend to deliver these new broadband tiers to 1.5 million customers by 2010.

Verizon announced the expansion of its 7 Mbps DSL product to the east coast portion of its footprint. Verizon will offer the new speeds for $39.99/month to DSL customers in Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, D.C., and West Virginia. The higher speeds are a clear response to cable modem’s historical speed advantage over DSL. “Our 7 megabits per second Internet service allows you to quickly download information from the Internet and provides an attractive alternative to cable modems," said Susan Retta, vice president, broadband solutions for Verizon. Cable will argue that Verizon’s arrival to the multi-megabit per second broadband speed party is a little late considering they are already offering 7 Mbps packages or more, and intend to keep upping the ante with even faster speeds.

In fact high speed Internet is seen as an important lure, maybe even the most important, for triple play bundle marketing tactics. Emphasizing speed, whether it’s the download portion, or the upload portion, which seems to be gaining more attention in these video sharing days, has always been a priority. As the gap in speeds between competitive offerings begins to narrow, emphasis is also being placed on service and value-add options like security and home networking. Going forward, service providers on all ends of the competitive spectrum will be challenged to create marketing messages and value propositions that rely on more than just “my service is faster (bigger) than yours.”

Comcast reported their fourth quarter 2007 results on Wednesday, and among the typical “we had a fantastic quarter” rhetoric, there was interesting insight on DSL conversions. Comcast reported that 64% of their net new cable modem customers were defectors from DSL competitors. To counter DSL’s “value pricing,” Comcast instituted an “economy tier” for cable modem. The $24.95/month economy tier more closely resembles common DSL pricing. The strategy appears to be having an impact, now accounting for over half of their new cable modem subscribers, and at the expense of their telco competitors. Comcast ended 2007 with 13.2 million cable modem subscribers, representing a 27% penetration of homes passed.

Other interesting news beyond the financials reported by Comcast includes their continuing commitment to DOCSIS 3.0. They intend to have 20% of their footprint migrated to it by the end of 2008. The main implication of DOCSIS 3.0 is dramatically higher broadband speeds, approaching 100 Mbps. It’s Comcast’s answer to Verizon FiOS.

I don’t usually comment on my own experiences, but I feel compelled to do so today. Along with being a telecom industry analyst and consultant, I’m also an obvious consumer of telecom services. Over the past few days, I’ve had the most aggravating experiences in trying to establish new telecom service (we’re in the process of moving our offices), that it really makes me wonder about the true impact of competition on the marketplace. What I mean by that is, my experience in trying to buy services from both an incumbent telecom carrier and a national wireless company have been so frustrating and aggravating, it makes me wonder if competition and its impact really exists.

It seems to me that these service providers would have systems in place that allow me to easily spend money with them, rather than with their competitors. But what I found was a bureaucratic mess that put me in an endless loop of phone transfers to customer service reps who were either indifferent, incompetent, unable, or unwilling to accept my monthly check for their services. I find it absolutely amazing that I have spoken to seven representatives (not an exaggeration) from the incumbent telephone company to try to order business DSL service, and I still haven’t been able to get an order placed. This experience is either great news for their competitors or bad news for competition proponents. The great news angle is that if you can create a system that simply allows people to start spending money with you without having to jump through endless loops, you should be in business. The bad news is maybe incumbents have squashed competitors to the point that they can live with these incredible inefficiencies and care less about them. As for me, lesson learned. The next call is to the cable company, who is aggressively pursuing the small business market. Any bets on the number of reps I’ll have to talk to there, before giving them the opportunity to collect money from me every month?

Bucking trends of lowering DSL pricing, AT&T will add $5 to the cost of most of their DSL tiers. The price change takes AT&T’s lowest DSL tier from $14.99/month to $19.99 month for a 768K download service. Their highest tier, which offers 6 Mbps will remain unchanged at $34.99/month. The changes do not impact the recently acquired BellSouth territory. AT&T still offers a “naked” DSL offer of $10/month, but it’s only available via their website and not heavily promoted. The $10 option is only a result of a FCC mandate, resulting from approval of AT&T’s acquisition of BellSouth.

Check out details in this Chicago Tribune article.

AT&T announced that subscribers to their DSL service will receive access to their 10,000 POP Wi-Fi hotspot network at no additional charge. This feature was previously available to “premium” DSL subscribers, but is now available to any customer who subscribes to a 1.5Mbps or higher downstream speed package. AT&T claims the new service will save existing broadband customers a potential $60/year and new customers a potential $240/year.

AT&T announced the launch of a 10Mbps DSL tier for U-verse customers. The new tier offers 1.5Mbps in upstream bandwidth, and is priced at $55 month. Embarq also recently announced a 10Mbps tier. Verizon regularly flexes its broadband muscle with FiOS, but also introduced a 7Mbps DSL tier recently. All this adds up to catch up time. DSL providers are transforming themselves from just a “value” alternative to more expensive and faster cable modem service. They are now trying to meet cable’s speed advantage head on. Cable has regularly tried to draw attention to their faster broadband speeds and have effectively labeled DSL as "slow" or the "new dial-up."

The battleground is now shifting away from speed comparisons to "value add" comparisons. As cable’s speed advantage wanes, both camps are now looking to provide value add services as a differentiating factor. For example, AT&T also announced that subscribers to their DSL service also gain access to AT&Ts 10,000 Wi-Fi hotspots at no additional charge. Both Verizon and AT&T are also adding convergence features for their broadband and video customers in an attempt to build value for bundled subscribers. Cable companies have their fair share of value add strategies as well, including free security suites and online gaming options. I suspect we’ll see the value add strategy intensify, and beyond the "usual suspect" value add features, expect telecom competitors to leverage their strength in wireless and cable to leverage their experience with video. Should be fun to watch.