1-Meg service deal enters final talks
By Randy Barrett
Northern Telecom Inc. and a small Chicago-based Internet provider, Megsinet Inc., are in final negotiations to roll out 1-megabit-per-second modem service in 10 U.S. cities.
Megsinet plans to offer the service in Chicago, Cleveland, Detroit, Las Vegas, Los Angeles, New York, Philadelphia, Pittsburgh, San Francisco and Washington, D.C., by mid-1998. If the deal is finalized, it will represent the largest deployment of the experimental 1-Meg modem technology to date.
"This blows away ADSL [Asymmetric Digital Subscriber Line]," said Megsinet Chief Executive Officer Mike Henry. "A customer can be on the Net and talking on the phone at the same time on one line."
Mainstream modems today, by contrast, transfer data at rates of about 28,800 bits per second.
Megsinet is currently a regional provider. However, the company recently raised $1 million in venture capital from Capital Cable Corp. in St. Louis, and Henry is angling for an additional $7.5 million from other investors to fund his expansion plans.
Megsinet also has filed to become a competitive local exchange carrier, a move, Henry said, that will make it possible to offer the 1-Meg modem service to home users. He predicted the service will cost about $60 per month (including a phone line) and that the modems will retail for about $199.
"We will be the first [competitive local carrier] out there that has this solution to go to a residential market," Henry said.
Nortel officials would not comment on the Megsinet negotiations, but the company has announced that Internet service providers (ISPs) will be a central part of its marketing strategy for 1-Meg modems and the switches that support them. The system uses a variant of Digital Subscriber Line technology to offer high-speed access along with advanced call-routing capabilities over standard copper telephone wires.
Earlier this month, Nortel struck a $20 million deal with New York-based ISP Transwire Communications Inc. to offer the 1-Meg service starting in early 1998. |
