Prodigy Jumps on Bell Atlantic DSL Bandwagon

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Bell Atlantic Corp. has put new punch behind its efforts to
sell DSL services by adding Prodigy Communications Corp. to its ISP-affiliate lineup and
shifting to an easier-to-install version of the high-speed-access technology.

In a deal similar to one signed by America Online Inc.
earlier this year, Prodigy will begin offering Bell Atlantic's "Infospeed"
digital-subscriber-line access as a premium upgrade to subscribers in the Northeast this
summer, officials said.

Initial target areas include patches of population centers
currently served or soon to be served by Bell Atlantic's DSL links in northern New Jersey;
Washington, D.C.; Philadelphia; Pittsburgh; Boston; and New York.

Once the second-largest provider of online services -- but
now well back in the pack, with some 700,000 subscribers -- Prodigy has been on the
rebound, registering a growth rate of 129 percent in 1998 across a coverage area
encompassing 750 cities nationwide, according to company figures.

Now, Prodigy chief technical officer Bill Kirkner said, the
company is ready to take a leading position among Internet-service providers moving to the
DSL platform.

"Our customers are already beginning to turn from
traditional media to new networks and devices as a primary source of information and
entertainment," Kirkner said. The Bell Atlantic deal is just one step in the move to
broadband, he added.

Like AOL, Prodigy will be able to exploit a large-volume,
long-term commitment to DSL transport from Bell Atlantic under a tariff plan the carrier
filed with the Federal Communications Commission in mid-May, Bell Atlantic director of
enterprise marketing Mike Volgende said.

Prodigy -- which has yet to say what its retail pricing
points will be -- will target the consumer and small-office markets in direct competition
with AOL, which plans to offer a high-speed version of its service in Bell Atlantic's and
other telcos' markets at about $40 per month.

Bell Atlantic is providing marketing and end-to-end
technical support as part of its deals with these and other ISPs, Volgende said.
"You'll be seeing some more [deals with ISPs] from us in the near future," he
added.

"We have been playing in the fast-packet space,
providing interoffice connectivity and other support services for ISPs for a long
time," Volgende said. "DSL is just an extension of that, although we are
negotiating some things that could expand that role in the future."

Where marketing is concerned, the carrier is setting up
links between its Web site and those of its ISP partners, making fast access available as
a direct link from the ISPs' Web sites and giving visitors to Bell Atlantic sites
direct-access options to its partners from the carrier side.

Bell Atlantic is also naming its partners in advertisements
that promote the Infospeed service, Volgende said.

Along with adding big-name ISP partners to its
DSL-marketing push, Bell Atlantic is about to introduce a new technical platform that will
feature so-called splitterless connectivity in conjunction with DSL rollouts in New York
and Boston, spokeswoman Joan Rasmussen said.

The new system allows consumers to connect a DSL modem to
an in-home line jack without requiring extension of a dedicated premises line to the
personal computer from a splitter connection to the outside line, she added.

"We're moving to the DMT [discrete multitone] system
endorsed by the UAWG [Universal ADSL Working Group] for New York, Boston and all
subsequent launches beyond the areas we're already in," Rasmussen said.

The splitterless system, to be supplied by Alcatel Alsthom,
requires subscribers to connect a filter on the modem wire to prevent interference with
voice calls over the premises line. The filter, with RJ-11 connections at each end, can be
installed just like any other line plug-in device.

While the G.Lite standard that will soon be approved by the
International Telecommunications Union provides for splitterless connectivity, the version
Bell Atlantic is installing is a proprietary precursor to the standardized version,
Rasmussen noted.

G.Lite also differs from the new Bell Atlantic platform in
that it is rate-adaptive. This means that the speed adjusts to whatever the user's
line-noise situation requires, with its peak set at 1.5 megabits per second, whereas Bell
Atlantic's system is designed to operate at the guaranteed rates offered to customers at
different monthly price points.

The speeds marketed so far by Bell Atlantic range from 640
kilobits per second, priced at $39.95 per month for the transport and Bell Atlantic's own
ISP service, to 7.1 mbps priced at $109.95.

So far, Bell Atlantic has installed DSL-access multiplexers
in about 80 central offices in its initial markets, with plans to expand rapidly to at
least 353 COs by the end of the year and to in excess of 800 by the end of 2000, Rasmussen
said.

"We should be at 8 million homes passed by the end of
1999 and at 16 million out of our total base of 21.5 million households by the end of
2000," she added.

Deployments so far have focused on population centers where
the demand is highest, with take rates exceeding expectations, Volgende said. "We
doubled our original budget commitment to DSL for 1999 at the beginning of the year, and
now, it looks like we'll go beyond the new target," he added.

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