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Verizon Turns Up DSL Heat

Verizon Communications Inc. is turning up the heat on cable operators in a bid to win more high-speed Internet customers, as it launched an ad campaign last week that takes shots at cable-modem services.

The commercials, which began running in 20 major markets, feature fictitious consumers shopping for a high-speed Internet access service. In one, a consumer is astounded that Cablevision Systems Corp.'s Optimum Online service would charge him an additional fee of almost $45 for a home-networking service, while another spot targets Comcast's high-speed data rates.

Some of the ads also criticize cable companies for not offering cable-modem subscribers virus protection or software that blocks pop-up ads.

Verizon spokesman John Bonomo said the telco doesn't plan to reduce the rates for its DSL service, which were cut to $34.95 monthly last year. He declined to say how much Verizon is spending on the ad campaign.

The commercials target consumers who have decided to switch to a high-speed Internet service, but haven't yet decided whether to go with DSL or a cable-modem package, Verizon said.

Verizon, which added 203,000 DSL subscribers in the fourth quarter to push its base to some 2.3 million, currently charges DSL customers $34.95 per month if they buy a standalone package, and $29.95 per month if they subscribe to DSL as part of the telco's Freedom bundle, which includes local telephony service. That's less than the rates charged by Comcast, Cablevision and Time Warner Cable — three MSOs that own systems in Verizon's core East Coast footprint.

Time Warner Cable's Road Runner service charges subscribers $44.95 per month on average. Cablevision offers Optimum Online customers rates of $29.95 per month for the first six months, with the fees then jumping to $44.95 per month for subscribers who buy a video package.

In November, Comcast began targeting existing DSL customers in Maryland, Illinois and California with a promotion touting its cable-modem service for $19.95 per month for a year. Its rate then jumps back to its standard $42.95 monthly fee after one year for video subscribers, and $57.95 a month for non-video customers.