The ADSL Tease: Why Super-Fast, Cheap Access Is Taking So Darned Long
zdnet.com
TUESDAY, AUGUST 04, 1998
Jesse Berst, Editorial Director
ZDNet AnchorDesk
When you're dating, it's easy to tell when someone is
teasing. When you're flirting with new technology, it's
not always as obvious that you're being led on.
Chances are you're smitten with the promise of
super-fast Internet access from home. Especially since
phone companies are rolling out super-fast ADSL
services in select cities. Click for full story. But I'm here
with some bad news. Many Americans will have to wait
years for cheap fast access from phone companies.
Widespread deployment of ADSL -- with its lure of data
transmission at speeds five to 25 times faster than
today's dial-up connections -- is still a long way off.
Yankee Group analyst Bruce Leichtman estimates
there will be only 25,000 paying ADSL customers by
the end of the year. Cable modem subscribers, by
contrast, could hit 500,000 by then. Click for full story.
There are several factors preventing phone companies
from making ADSL happen at the speeds and with the
prices we all want:
Phone bureaucracies. Most telcos still adhere to a
business structure optimized for a regulated monopoly.
They are not prepared to respond quickly to market
conditions. (Not yet, anyway, though things are
improving.)
Fear of cannibalizing T1 sales. Telcos are making a
fortune selling fast access to businesses at high
prices. Why jeopardize that revenue for ADSL, which
should cost a fraction of what T1 does for comparable
speeds? I say should because most phone companies
aren't rolling out ADSL at competitive prices. U.S.
West, for instance, is offering a $40 per month service.
Sounds pretty good until you find out it doesn't include
setup, modem or ISP charges. And that it connects at
a relatively paltry 256 Kbps. At the high end, its
MegaBusiness service starts at $80 per month for 768
K speed and runs up to hundreds and hundreds per
month for more serious speeds. Click for the U.S.
West service/pricing details.
Inadequate infrastructure. As slow as the cable
systems have been to bulk up their network
underpinnings, phone companies, with a few
exceptions, have been slower still.
Merger mania. The huge consolidation wave that's hit
the telecommunications industry -- GTE and Bell
Atlantic, WorldCom and MCI, AT&T and British Telcom
-- will prove a serious impediment to ADSL progress.
Any merger is an enormous drain of time, money and
resources. And these deals are among the largest and
most complex in history. It will be years before the dust
has settled. Click for full story.
To be fair, the media have contributed to the
fast-access flirtation. We're eager to see high
bandwidth advances such as ADSL. So we get excited
about each technology breakthrough -- forgetting the
business bottlenecks that can stall the actual delivery
of technology.
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