DirecTV DSL Service Goes Offline

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Hughes Electronics Corp.'s decision to dump its flagging DirecTV Broadband Inc. digital subscriber line service will orphan some 160,000 customers, and a mild feeding frenzy to claim those users has already begun.

For the most part, cable operators haven't show much interest in bringing these subscribers over to their side. But some may indeed head that way.

Hughes announced Dec. 13 that it would close its DirecTV Broadband Inc. high-speed Internet service in 90 days, and issued pink slips to half of the unit's 400 employees. The 200 remaining DirecTV Broadband employees will work to switch existing customers to other service providers, where possible.

DSL customers are being directed to the company's Web site (www.directvdsl.com) for information on making that transition.

Hughes, parent of direct-broadcast satellite provider DirecTV Inc., acquired the DSL service, formerly Telocity Inc., in April 2001. But it never clawed its way out of the red, and with the termination of Hughes's merger with EchoStar Communications Corp., the parent company decided to cut its losses.

Hughes's loss may create gains for other providers. Broadband.com, an online broker for residential and business users looking for high-speed service, has announced a special program for DirecTV DSL customers seeking alternative providers.

Broadband.com has fielded about 30 orders per day from DirecTV DSL customers.

The company has deals with Comcast Corp.'s AT&T Broadband systems and EarthLink Inc. In the next few weeks, it will add several other major MSOs.

"It's been a pretty good response," said Broadband.com president Joel Sam.

While many business customers will be directed to a comparable DSL service, "as far as the residential, we don't really push them in any one direction right now," he added. About 70 percent of the customers are keeping DSL, but the remainder are making the switch to cable service, he said.

DirecTV Broadband's relatively small number of users, scattered throughout the U.S., likely won't attract much attention from cable operators.

"We are looking into the feasibility of serving the critical high-speed Internet access needs of some of these displaced Internet subscribers, however we have no current plans for a specific widespread acquisition campaign beyond our normal aggressive marketing" said Cox Communications Inc. vice president of product marketing and management David Pugliese. "You have to keep in mind that we're talking about approximately 15-20,000 customers within our 10 million-plus service areas, so it would have to be a very targeted approach."

Similarly, Comcast will continue to market its own high-speed service, but it won't focus any added attention on DirecTV Broadband customers, according to spokeswoman Sarah Eder.

"We have a general campaign that talks about Comcast High Speed Internet, and we compare ourselves in the normal course of business to DSL and explain why our service is better than DSL," she said.

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