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RealTime IT News

Comcast Tempts Verizon, SBC Customers

Comcast's effort to lure broadband subscribers from SBC and Verizon has had some industry-watchers predicting a price war between the cable giant and its telecom rivals.

Unfortunately, for consumers, it isn't going to happen.

"This particular campaign is a limited offer and we anticipate it to be a one-time event as other offers of shorter duration such as six months have proven successful," Dave Watson, a Comcast executive vice president told internetnews.com.

The Philadelphia company is contacting DSL customers via e-mail in California, Illinois and Maryland markets with a special offer for high-speed service -- $19.95 per month for a year, a discount of more than 50 percent.

The effort mirrors a previous Comcast campaign to "win back" customers who defected to satellite TV providers such as EchoStar and DirecTV.

Instead of steep, longterm price cuts on broadband, Comcast will continue marketing new services through fatter and faster pipes, a strategy aimed at keeping its average revenue per user, a key metric, inching up.

For example, Comcast recently boosted download speeds in several markets in the Midwest and South, the home range of telecom rival SBC and plans future improvements. Comcast customers are receiving a new 3 Mbps downstream service (twice as fast as before) at no additional cost. Upstream speeds will remain at 256 Kbps.

The company also signed a deal with Real Networks to offer an online music service to its broadband customers.

Comcast added 470,000 subscribers during the third quarter, a 39 percent bump from the same period last year, and a 35 percent increase over the second quarter. It also reports that its customer churn is decreasing, however there is still stiff competition and the Baby Bells have also reported strong DSL numbers lately.

Spokesmen for Verizon and SBC weren't immediately available to comment on Comcast's program.

On Monday, however, Verizon selected vendors for its planned deployment of high-speed, high-capacity Fiber to the Premises (FTTP) systems, which use hair-thin strands of glass and laser-generated pulses of light to transmit voice, data and video signals far faster than today's copper cable systems.

Analysts at SG Cowen said it appears that Verizon will only offer data and voice, not video, in the near-term.

"We have heard that there will be another (request for proposal) in a year to bring in additional sources and possibly for video," SG Cowen's telecommunications team said in a note to investors.

The initiative is slated to begin next year and promises to add new services to its menu. By the end of the year, the company expects to deploy the new technology in over 100 central offices across nine states.