Verizon enters Internet fray by offering DSL access
By John Duchemin
Advertiser Staff Writer
Phone service provider Verizon has started to offer high-speed Internet access in Hawai'i, a move that experts say could not only give consumers more choices but also shake up the local Internet service provider industry.
Verizon yesterday announced it will start offering digital subscriber line, or DSL, service in limited areas on O'ahu, Maui, Kaua'i and the Big Island. Prices will range from $50 a month for basic consumer service to $170 or higher for premium business connections.
The service will be a direct challenge to providers including Oceanic Communications, the local cable company and AOL-Time Warner subsidiary that offers RoadRunner high-speed Internet service over a fiber-optic cable network to 58,000 users statewide. RoadRunner costs $42 a month for basic service.
Oceanic spokesman Kit Beuret said that his company is not concerned by the new competition — but that Verizon could certainly have an impact on the market.
"They're the big guys," Beuret said. "They certainly have options that smaller businesses don't have, economies of scale that others can't replicate."
Besides Oceanic, the state's No. 1 high-speed Internet service provider, Verizon will be taking on providers such as LavaNet, FlexNet, SystemMetrics, Pacific Internet Exchange Corp., Maui.net and Pacific DirectConnect.
Some providers said they are worried Verizon will use its status as the state's only phone provider to crowd out the competition. All high-speed Internet providers, except Oceanic, are dependent on Verizon to provide DSL, which runs over standard phone lines.
Verizon also enjoys access to its massive customer database, which shows exactly who can and cannot get high-speed Internet access. Potential customers must call Verizon to see if they are DSL capable — and some in the industry worry that Verizon could turn those calls into DSL sales.
"In general, having more providers is good for everyone, in that the consumer has more choices," said LavaNet CEO Yuka Nagashima. "However, no one should have unfair advantages. We all have our niches, our weapons — but if one company gets free weapons that no one else has access to, that's not good."
Verizon, which has offered standard dial-up access for several years, said it decided to offer DSL in Hawai'i now because of new fiber-optic cables connecting Hawai'i to the Mainland, Australia and Asia that are coming on line this year and next year. Those cables, which add enormous amounts of online capacity to the Islands, mean there's room for more providers to offer service, the company said in a statement.
The DSL service will be offered through Verizon Online, the phone company's nationwide Internet access subsidiary, which has more than 700,000 subscribers.
As with all other DSL providers, Verizon's service will be limited to areas within three miles of its central phone hubs. Areas without DSL include Waimanalo, most of the North Shore, and the Wai'anae Coast from Kapolei to Kaena Point.
On the Neighbor Islands, DSL is largely limited to the most urban areas, including Wailuku, Kahului, Kihei, Kula, Makawao and Lahaina on Maui; Princeville, Kapa'a, Lihu'e and Kalaheo on Kaua'i; and Kailua-Kona, Waikoloa, Kamuela and Hilo on the Big Island.
