Jenna,got to be in DSL stocks(theme for next year)....COVD and CMTN recent additions...DSL High-Speed Rollout To
Snowball In 2000
(09/21/99, 6:53 p.m. ET)
By Mary Mosquera, TechWeb
Technology used by major telephone
carriers for high-speed Internet is about to
take off as the software that enables it will
become available at year-end, a telecom
analyst said Tuesday.
Software that implements the standard for ADSL lite
that is easier and less expensive for users will debut next
month and be in wide circulation in December, said
Charles Pluckhahn, senior telecom analyst at Stephens
Investment Bankers at a conference on "Wiring
Broadband America: Understanding the Role and
Importance of the Internet Backbone," sponsored by
the Computer and Communications Industry
Association, an industry group in Washington.
"Soon, you'll be able to walk into your local Circuit City
and buy a computer equipped with it," Pluckhahn said.
"It will be like a modem upgrade."
Competition and consolidation are generating more
services like broadband and wreaking further
consolidation and competition in a confusing revolution,
similar to airline deregulation in the 1980s, analysts said.
Cable modems have been the most popular form of
accessing the fat pipe that delivers high-speed data
because there was not a consumer-friendly standard for
telephone carriers' delivery. "DSL has the potential to
roll out tens of millions over the next few years,"
Pluckhahn said.
"We can't predict what the demand for broadband will
be," said Larry Darby, an economic and financial
consultant in Washington and former head of the
Federal Communication Commission's Common
Carrier Bureau. "But we won't have enough capacity
without the participation of all the players."
Competition will push broadband rollout by the
telephone carriers and cable. So far, the FCC has not
forced the unbundling of broadband elements by
telephone or cable companies. But the regional phone
carriers say regulations covering long distance entrance
stymie DSL deployment. Critics of AT&T say the long
distance giant turned cable giant should open its
network to other providers besides its business partner
ExciteAtHome.
The DSL ramp-up will have an effect on AT&T,
analysts said.
"I think the market will sort this one out," Pluckhahn
said. "AT&T will look to others, like AOL, to improve
its prospects." AT&T and America Online will get
closer over the next year or two, he said.
Industry consolidation, such as Bell Atlantic with GTE
and Qwest with U S West, is also driving broadband
development, said Paul Glenchur, vice president of the
Schwab Washington Research Group.
Companies are buying broadband capability and not
necessarily building it. Companies need the scalability of
these mammoth mergers to control whole networks,
like AT&T.
A bandwidth glut plus enforcement of the 1996
Telecommunications Act will lead to further industry
competition and consolidation, with new services and
rapidly deflating prices, Pluckhahn said.
The spark in DSL-type technology rollout next year will
also heighten stock market activity in those companies,
he said. And DSL technology may fare better in the
high-speed, large scale world. Cable has trouble scaling
to mass markets, Pluckhahn said, with quality
diminishing as the number of subscribers connected
multiplies.
"But never underestimate the ability of the telephone
companies to look a gift horse in the mouth and screw it
up," Pluckhahn said.
The FCC is moving toward deregulation.
"We're close to the time when the structure of the
market, capital, and technology are free enough for
regulators to back off," Darby said.
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