Yahoo, Verizon launch discount DSL service

$14.95 per month for first year; Download speeds up to 768 kilobits

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updated 9:02 a.m. ET Aug. 23, 2005

SAN FRANCISCO - Verizon Communications Inc. and Yahoo Inc. have teamed up to launch a cheaper high-speed Internet service designed to compete against cable operators and dial-up service providers.

For $14.95, subscribers will be able to download Web pages via a digital subscriber line at speeds of up to 768 kilobits and upload data at 128 kilobits. The cheaper service, which requires a one-year contract and has a price hike after 12 months, offers Yahoo premium services, such as antivirus protection, on-demand music videos and unlimited photo storage, according to an advertisement on Yahoo's site.

Sunnyvale-based Yahoo was expected to announce formally the Verizon launch Tuesday, but an advertisement found on the company's Web site Monday night detailed the DSL offering. John Reseburg, a Yahoo representative, confirmed the accuracy of the ad.

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When it comes to transmission speed, Verizon is far behind SBC Communications, which launched a $14.95 DSL service with Yahoo in June. SBC transmits data at up to 1.5 megabits, twice as fast as Verizon's.

Verizon will continue to offer faster DSL for higher prices. According to the ad on Yahoo's site, Verizon customers can pay between $19.95 and $37.95 to obtain transmission speeds comparable to SBC's.

Verizon and other telephone companies are cutting prices to stave off cable companies, which can offer faster data delivery and at greater distances than DSL.

Still, Verizon's low-cost DSL is speedier and cheaper than America Online's $23.90-monthly dialup service.

For Yahoo, the partnership is another chance to collect a share of monthly subscriber fees as well as increase its profile as an Internet-service provider.