New DSL Service Launches in NYC

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New York -- Manhattan-based telecommuters looking for
high-speed Internet access gained a new option last month, when Prism Communication
Services Inc. began offering its digital-subscriber-line service, branded "Red."

The Red launch followed a yearlong beta-test of 200
subscribers, and it was backed by highly visible teaser ads in local print and television.
Prism will spend more than $10 million to market Red this year, chief marketing officer
Dennis Kruse said.

Densely populated New York City can expect a heated battle
for high-speed customers.

RCN Corp. already offers high-speed-data service in certain
apartment buildings in New York. Time Warner Cable has said that it will add its Road
Runner high-speed service later this year. And Bell Atlantic Corp. plans to roll out its
own DSL service in Manhattan late next month.

"There's certainly a lot of low-hanging fruit
among people who have become accustomed to high-speed service at work," said Patti A.
Reali, an analyst with Dataquest.

Road Runner spokeswoman Sandy Colony said the company has
received thousands of e-mails from New Yorkers asking when the service will be available
here.

"We don't want to make any real commitments until
we're ready to receive what we know will be a huge onslaught of requests for
service," she said.

Prism's "Red Residential" service offers a
downstream speed of 640 kilobits per second, with 120 kbps upstream, starting at $79.95
per month, including the Internet-service-provider fee and modem rental.

Pricing is higher for its small-business service ($149.95
per month), which offers speeds of 1 megabit per second downstream and 120 kbps return.
"The Red Network" costs $349.95, and it includes a router and additional e-mail
addresses. Installation costs $299.

"That's a high-end offering," said Bruce
Leichtman, an analyst with The Yankee Group, adding, "$80 is not broad-scale consumer
pricing."

Bell Atlantic plans to price its DSL service starting at
$39.99 per month for customers with their own ISPs, or $59.99 with its ISP. Starting this
summer, the telco will package its service with America Online Inc., and Bell Atlantic is
in talks with other ISPs to give customers more choices, according to spokeswoman Joan
Rasmussen.

Red will not offer the option of choosing an ISP.

"We feel that it's very important for us to have
the one-to-one relationship with the customer," Kruse said.

Formerly named Transwire Communications, Prism leases Bell
Atlantic's copper plant for delivery of its high-speed-data service. Prism's
facilities-based networks are colocated at Bell Atlantic's central switching offices.

Kruse said Prism's DSL technology covers the majority
of Manhattan today, and it will be built out to 67 percent of New York City's five
boroughs -- with 44 switching sites -- by the end of the second quarter.

The company also has plans to bring its Red service to much
of the East Coast, as well as to selected markets across the country, over the next two
years.

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