NetZero to Offer DSL Broadband
United Online, which owns the NetZero and Juno brands, made its first moves into broadband on Thursday, announcing it would offer DSL service via infrastructure leased from Verizon. The company is one of the last major providers to begin to migrate its business to broadband.
The moves come at a time where consumers are increasingly turning to broadband as a faster -- and in some cases cheaper -- alternative. AOL, which built its business on dialup users, was the first to feel the sting of migration, with EarthLink following soon after.
Many learned the lessons of not having a clear upgrade path from AOL. While that company acted too late in devising a clear exit strategy from dialup and ended up losing nearly a third of its subscriber base as a result. EarthLink and others have been able to prevent such heavy losses.
It now appears as if NetZero, the company that once took pride in the fact that its users never had to pay for Internet service, is following a similar path. However, unlike its low-cost dialup service, NetZero DSL users will actually pay a premium over their Verizon counterparts.
This is due to the fact that United must pay a wholesale price to access Verizon's network, which reports suggest is not far off the rate it charges to its own customers. Under new telecommunications laws, the company is allowed to charge whatever it wants to access its pipes.
Service for the basic DSL tier, called "DSL Saver," would give up to 768Kbps of downstream bandwidth. While it would cost $14.95 USD for the first six months, the same as service with Verizon, after that period the charge would go up to $19.95 USD per month.
The premium tier, called "DSL Pro," offers 1.5Mbps speeds and is available at $19.95 USD per month. However, after six months the price jumps to $29.95 USD per month, which is the same price that Verizon DSL charges for twice the speed.
A six-month commitment is required for either service, United Online said. The company would also provide support for its dialup users that wish to upgrade to the new offering.
"We believe that dial-up continues to be a great solution for many people, but we also want to accommodate those individuals looking for a broadband service that provides the outstanding value that consumers have come to expect from NetZero," chairman and CEO Mark Goldston said.