Updated from 11:30 a.m. EDTYahoo! ( YHOO) is adding Verizon Communications ( VZ - Get Report) to its stable of telecom partners offering high-speed Internet access. The company scheduled a call to discuss the partnership Wednesday morning, but the Web site verizon.yahoo.com takes visitors to a site with the terms and conditions outlining an arrangement that mirrors those Yahoo! has with SBC Communications ( SBC) and British Telecom ( BT). For an introductory monthly fee of as low as $14.95, subscribers to the co-branded DSL services can have Verizon's broadband Internet access with downloading speeds of 768 Kbps as well as the email accounts and personalized portal features long offered by Yahoo! for $19.95 a month, subscribers can have download rates as fast at 3 Mbps, or pay $37.95 a month on a monthly basis. The SBC partnership offers newcomers downloading speeds up to 1.5 Mbps for $14.95 and speeds up to 3 Mbps for $24.99. Older customers of the Yahoo!/SBC DSL service are stuck paying $36.95 a month if they lock into a 12-month contract or $59.95 on a monthly basis. Yahoo! said there is no overlap among SBC's and Verizon's DSL services. The variety of DSL plans among Yahoo!'s partners speaks to the increasing balkanization of DSL pricing and speed as telecom companies juggle the need to boost revenue with the desire to lure more customers from dial-up to broadband accounts and the tough competition with cable companies. In a conference call, Verizon's president of retail markets, Bob Ingalls, and Yahoo! Chief Operating Officer Dan Rosensweig said that the $14.95 fee was aimed at spurring dial-up customers who use the Internet for a single task such as checking email to try broadband applications such as video and music. "This is a new service with speeds that are 10 times faster and a price that's lower than many plans out there," said Ingalls. "There's a significant market opportunity for us to convert dial-up users into broadband." Many dial-up users had considered price to be a barrier in making the jump, Ingalls said.
Verizon and SBC face angering existing users by offering a lower rate to prodigal dial-up accounts. But the companies seem to be betting that the trouble involved in switching DSL services and their Yahoo! email accounts will prevent many from bolting. Verizon may also take a page from SBC's strategy and offer existing DSL accounts access to a higher-speed service at an attractive rate. Rosensweig said DSL subscribers tend to migrate to the higher speeds after they've had a year in the lower tier. In January, Yahoo! and Verizon said they were entering into a joint venture that would co-brand the two companies in one service and offer a Yahoo! home page to Verizon's existing customers. Prior to that, Yahoo! had offered some of its features to Verizon Wireless customers. Yahoo! shares were trading down 0.5% at $33.02 in Tuesday trading. Verizon's stock was up 0.1% at $33.17.