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Technology Stocks : 3Com Corporation (COMS)
COMS 0.00130-87.0%Nov 7 11:47 AM EST

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To: Beachbumm who wrote (15191)4/9/1998 3:40:00 PM
From: Mang Cheng  Read Replies (2) of 45548
 
"When Does 56K Really Mean 56K Speeds?"

Date: 4/9/98
Author: Paul Korzeniowski

Trying to reduce the time it takes to surf the Internet, you upgrade to a
56K modem, the fastest available. But to your surprise, you see no
improvement.

What's the problem? You discover your Internet service provider can't yet
provide 56K transmission speeds.

It's easy for users to get 56K modems. It's much more difficult for ISPs to
upgrade to the point that users can actually utilize their 56K modems.

Why's that? ISPs have to upgrade hundreds or even thousands of modems
in their vast networks. They must also upgrade supporting products on
their networks, like remote-access concentrators.

And they have to do all this without letting their networks crash.

In short, ISP deployment of 56 kilobit-per-second services is a step
behind customer purchases of the new modems.

But ISPs are tackling the problem. By the end of the year, users of 56K
modems will find themselves accessing the Net more and more often at
56K speeds, not the slower speeds that still dominate today.

ISPs have one good excuse for not moving sooner: Two competing
standards for 56K modems were battling in the market.

One group was led by 3Com Corp. of Santa Clara, Calif., which was
advocating its X2 standard. The other group was led by Lucent
Technologies Inc. of Murray Hills, N.J., and Rockwell International Inc. of
Newport Beach, Calif. They promoted their K56Flex standard.

But the outlook for modem suppliers - and Net surfers - has brightened. In
January, the International Telecommunications Union released a draft of a
new standard that combines a bit of both X2 and K56Flex, and can work
with either.

The ITU expects to ratify the specification in September. It almost surely
will be accepted by everyone in the industry. So equipment makers plan to
start making compliant 56K modems and remote- access systems this
quarter.

If you already own a 56K modem, you'll be able to conform to the new
standard by downloading free software the vendors will make available.

3Com made its software available for download March 27. You can get it
through the company's Web site at 3com.com. Rockwell and
Lucent haven't yet said when their software will be available.

ISPs already are gearing up. Netcom On-Line Communication Services
Inc., WorldCom Inc. unit UUNet, and MCI Communications Corp. say
they'll upgrade their devices to the new standard in coming months. They're
awaiting equipment from makers.

Netcom plans to have the 56K service available in 300 cities by year-end.

In December, AT&T Corp.'s WorldNet unit had announced plans to
deploy X2 technology in 56 cities and K56Flex service in 31 cities by
June.

Customers outside those 87 cities will be able to use an 800 number to
access 56K connections, says Rose Klimovich, a product line manager at
AT&T WorldNet.

So life will become easier for the ISPs. As the two camps were battling,
ISPs faced three options: Hold off deploying the higher-speed service,
back one side or roll out services supporting both.

Many held back, awaiting whatever standard emerged.

''ISPs didn't want to get caught in the cross fire of a messy standards
battle,'' explained Kiran Narsu, an analyst with market researcher Giga
Information Group in Westport, Conn.

But a few ISPs did choose a side. By late '97, San Jose, Calif.-based
Netcom, for example, had rolled out 56K services in 60 locations. The
ISP went with 3Com's approach because of a long-standing relationship
with the network equipment supplier.

If you had an X2 modem, if your ISP used X2 and if traffic and other
factors permitted, you could connect to the Net at 56K speeds.
Otherwise, you would connect at a slower speed.

MCI also had decided on 3Com's standard, deploying it in 280 U.S. cities.
''We've been working closely with 3Com for more than three years, so (the
choice) made sense for us,'' said Bob Smith, a senior marketing manager at
MCI.

Fairfax, Va.-based UUNet added 56K support in 490 locations. It opted
for K56Flex because it relies on network concentrators from Ascend
Communications Inc. of Alameda, Calif., and Ascend had put Rockwell
modems into its network concentrators.

The choices made life difficult for customers. In order to operate at the
higher speed, both ends of an Internet connection must support the same
protocol. So users with a K56Flex modem wanting to use the Netcom or
MCI networks had to operate at speeds slower than 56K. And X2 users
had the same problem using UUNet Internet services. The new standard
will solve those problems.

The largest online service, America Online Inc., has upgraded about 80%
of its 700,000 modems, making 56K available in 540 cities. The ISP made
half its connections X2 and half K56Flex. Now, they'll be made compliant
with the new standard.

Because of the standards debate and ISP uncertainties, sales of 56K
modems didn't meet expectations last year. Makers sold 11 million in '97,
but about 30 million had been expected, says VisionQuest 2000 Inc., a
Moorpark, Calif. market researcher.

1998 Investors Business Daily, Inc.
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