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Non-Tech : Amati investors
AMTX 1.470-5.8%Dec 12 9:30 AM EST

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To: Boplicity who wrote (17398)5/12/1997 9:29:00 AM
From: Eric Goethals   of 31386
 
[Interopt follow-up report]

May 12, 1997 10:00 AM ET
DSL catches the eye of telcos
New deals could help deployment of high-speed technology
By Scott Berinato in Las Vegas


High-speed DSL technology emerged from
NetWorld+Interop here last week as the clear favorite
for future IT broadband connectivity. And it will gain
more momentum over the next few weeks.

Hayes Microcomputer Products Inc. will announce this
month an agreement with Alcatel Data Networks Inc.
and Pacific Bell Communications Corp., under which
Hayes and Alcatel will supply PacBell with DSLAMs
(Digital Subscriber Line access multiplexers) and
customer premises equipment for a forthcoming DSL
service.

ayes, of Norcross, Ga., and Alcatel, of Richardson,
Texas, have similar deals in the works with
Southwestern Bell Corp., Bell South Corp. and
Ameritech Corp., sources said. Officials from Alcatel
and Hayes declined to comment.

Getting telephone companies to put aside space in the
central office for DSL, which transmits data at rates
from 1.5M bps downstream and from 128K bps
upstream, will knock down a major barrier to the
technology. DSL vendors believe the telcos have been
hesitant to make such a move for fear of cannibalizing
profitable T-1 and analog line services.

PacBell will announce plans this month to begin
ommercial DSL service for its regional customers by
the third quarter, said sources familiar with the deal.

Although pricing has not been set, sources said the
PacBell service could come in at less than $2,000 per
line. Such pricing will likely slow widespread
deployment; however, prices are expected to drop over
the next year.

Other companies are jumping into the DSL mix as well.
U.S. Robotics Corp., which will ship its first DSLAM
product this month, will release the second generation
of the product next month at SuperComm, in New
Orleans.The new version promises to deliver DSL for
$1,000 per line or less.

The Skokie, Ill., company's second DSLAM release will
include ATM interfaces as well as a two-port DSL card.
The current version features a single-port asymmetric
DSL module.

These are the first of a monthlong barrage of
announcements by major internetworking vendors
committing to DSL, analyst Vern Mackall said during a
presentation at NetWorld+Interop.

But Mackall and fellow analyst Brad Baldwin, both of
International Data Corp., in Framingham, Mass.,
preached temperance while praising the technology's
potential.

Issues that remain to be worked out, besides
standards, include what flavor of DSL makes sense
and what architecture to use. For instance, should DSL
be carried over ATM lines? In addition, vendors and
corporate sites have yet to address infrastructure
issues, because real-world tests of the technology have
been so limited.

Users want the bandwidth, but given their trepidation
with nonstandard 56K-bps modems, it's unlikely that
conservatism will change with DSL, Mackall added.
One user said he would need extremely compelling
arguments to install DSL today. "I want real standards,
not advertised standards," said a senior programmer
at a major computer company. "From the corporate
point of view, [adopting DSL] is expensive. The
bandwidth is tempting, but I can get dial-up service for
$8 a month."
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