MSN, Telcos Team Up for DSL

MSN Internet Access is partnering with BellSouth, Qwest, SBC, and Verizon to offer DSL access to users nationwide. The initiative allies Microsoft with the powerful incumbent local exchange carriers (ILECs) after its prior allies—independent DSL resellers, such as NorthPoint Communications—went bankrupt. The announcement was made as part of a larger initiative called “MSN 7,” which also involves a redesign of the MSN Web sites and MSN Explorer client application.

Teaming Up with the ILECs

MSN Broadband, the Microsoft-branded high-speed Internet access service, was offered through DSL provider NorthPoint until that company went bankrupt in Apr. 2001. (See “NorthPoint Demise Won’t Impact Broadband Strategy” on page 23 of the May 2001 Update.) MSN Broadband remained on hiatus until August, when ILEC Qwest (in which Microsoft took a 1.3% stake for US$200 million in 1998) began offering MSN-branded DSL service to customers in 14 Western states.

On Oct. 25—the timing coincides with the worldwide retail release of Windows XP—MSN Broadband DSL service will also be offered through partnerships with BellSouth (which provides DSL to the Southeastern U.S.), SBC (which has a strong presence in California and the Midwest), and Verizon (which is most prominent in the Northeast and West). As the local providers continue to roll out DSL lines, Microsoft says that MSN Broadband DSL service will be available to 90% of DSL-capable homes in the U.S. by the second quarter of 2002. However, this number only measures the number of households that are within the theoretical distance limits for DSL service; the real number depends on many other factors, such as how quickly the ILECs upgrade their infrastructure (by adding DSL access points, for example).