Verizon Reduces Prices for Phone Service

By BRUCE MEYERSON, AP Business Writer

Verizon Communications Inc. sharply cut its prices for unlimited telephone service across the Northeast and Mid-Atlantic on Tuesday, including markets where Cablevision Inc. has just boosted broadband Internet speeds.

The latest jockeying augurs an ever fiercer struggle ahead between the phone and cable TV industries, with consumers getting lower prices and advanced services.

The new Verizon plans range from $35 to $40 for unlimited local and domestic long-distance plus call waiting, caller ID and voice mail, or from $30 to $35 for unlimited calling with no extra features. Taxes and surcharges typically add $10 to $20 to the monthly bill.

Those rates are at least $15 cheaper than any of Verizon's existing packages with unlimited calling, although many of those plans include a larger selection of features and calls to Canada.

The aggressive offers mark another tactical maneuver in the developing showdown between phone and cable companies. The two industries are increasingly venturing into one another's traditional markets in a bid to win new customers with a one-stop-shop for calling, Internet, TV and wireless services.

Verizon and fellow regional phone provider SBC Communications Inc. are spending billions to replace their copper phone lines with fiber-optic cables that can deliver cable TV, far-speedier Internet connections and new multimedia and interactive services.

Using those new lines, Verizon recently introduced TV in its first market, a suburb of Dallas, and now offers broadband download speeds from 5 to 30 megabits per second in 800 communities in 15 states.

At the same time, Verizon is also competing aggressively on price with its slower DSL service, introducing a $15 a month plan last month, and now offering unlimited calling at rates almost competitive with the $20 to $30 a month charged by providers of voice over Internet phone services.

SBC has made similar moves in cutting its phone and DSL rates in a bid to keep subscribers from leaving and to attract news ones while it prepares for next year's launch of TV and speedier broadband connections.

Cable companies, which have already lured away more than 5 million customers for their new phone services, are responding by boosting their broadband speeds and venturing into cellular service.

Cablevision, which competes with Verizon in New York City and its suburbs, on Monday announced it was increasing the maximum download speed of its lowest-price broadband service to 15 megabits per second, up from a maximum of 10 -- which was already several times faster than most consumer DSL services. The company also introduced new 30 and 50 Mbps options to compete with Verizon's new FiOS fiber optic offerings.

And last week, four of the nation's biggest cable providers announced a deal with Sprint Nextel Corp. to introduce co-branded cell phone service by the middle of 2006.

The lower-priced Verizon calling plans, first introduced last month at slightly higher rates in California, Texas and Florida, are being offered in New York, New Jersey, Pennsylvania, Maryland, Massachusetts, Connecticut, Delaware, Virginia and Washington, D.C.

There's no timetable for when Verizon might introduce the new plans in its remaining local phone territories in North Carolina, South Carolina, West Virginia, Ohio, Illinois, Indiana, Michigan, Wisconsin, Nevada, Idaho, Oregon and Washington.

Copyright 2005 The Associated Press.

[TELECOM Digest Editor's Note: How odd ... so even SBC is in on this new pricing structure. I can recall when our local CLEC 'Prairie Stream Communications' first opened for business in 2002, they were offering flat rate, open-ended packages of _everything_ for $25.00 per month, and SBC complained to the Kansas Commission that 'Prairie Stream is being predatory'; although the Commission left Prairie Stream alone on it, SBC continually complained that 'Prairie Stream will not stay in business very long at that pricing'. So now, Verizon and SBC are gradually lowering their prices as well. PAT]
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