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Technology Stocks : CAWS - Wireless Cable (New and Improved)

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To: Guth who wrote (703)12/5/1996 5:46:00 PM
From: Zorro   of 5812
 
Video-to-homes a tough go for ADSL

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Electronic Engineering Times -- 12-02-96, p. 72
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Electronic Engineering Times : Asymmetric digital subscriber line (ADSL) is an alternative technology that has been positioned as a method for residential Internet connectivity. ADSL was initially developed for video-on-demand (VOD) applications as an alternative to hybrid fiber-coax (HFC) transmission systems. ADSL uses a complex discrete multitone (DMT) or carrierless amplitude-and-phase-modulation (CAPM) line code to offer 1.5-to-6 Mbits/second downstream service and 64-to-640 kbits/s upstream.

Early field trials by telecommunications service providers of VOD services (home movies) proved disappointing. Consumer demand proved to be very cost- sensitive and the costs of deploying VOD service were too high to be justified by acceptable market prices. Ironically, the transport system, whether ADSL or HFC, had little to do with the cost of deploying VOD.

Other more expensive elements of a VOD system, such as the video server and ATM switch, dominated the $3,000-to-$5,000 cost per subscriber. Telco-industry guidelines suggest that new service equipment must be amortized at a 3 percent per month rate, and market surveys showed residential consumers were reluctant to accept a $120-per-month increase in their phone bills, even with VOD service thrown in.

Additionally, alternative technology for video distribution such as direct-broadcast satellite (DBS) and multipoint multichannel distribution service (MMDS) appear to be attractive, cost-effective alternatives. Faced with a tremendous sunk cost and no apparent market, it seems ADSL equipment and technology vendors may have latched onto Internet connectivity as the emerging market that would justify this technology.

Although ADSL does have the advantage of allowing telecommunications-service providers to use the existing wire plant, it suffers from distance limitations. Regional Bell operating companies (RBOCs) require that services targeted at residential customers have a transmission range beyond the 12,000-foot service area appropriate for business deployment. But to get the appropriate 16,000 to 18,000-foot reach, ADSL speeds cannot exceed 1.5 Mbits/s downstream and 64 kbits/s upstream. 64 kbits/s is insufficient for most applications other then passive web browsing-it excludes any data-intensive interactive service and telecommuting.

ADSL proponents argue that remote access multiplexers could be positioned away from the central office (CO) in order to reduce the reach requirements to the consumer. However, these multiplexers will require optical fiber to backhaul their digital load to the CO and, as a result, the deployment rate of these devices will be paced by the availability of fiber links into neighborhoods.

In addition, telcos are reluctant to invest in expensive access muxes until the demand for premium Internet connectivity is validated. In the interim, they are looking for an inexpensive solution whose cost directly scales with the number of users, which implies the traditional model of modem pairs.

The asymmetric nature of ADSL may not be well-suited for telecommuters. Since the asymmetric ratio of ADSL is between 10:1 and 20:1, files that take only two minutes to download would take between 20 and 40 minutes to send back to the central database.

For these reasons, Brooktree believes that a symmetrical HDSL technology is a better interim solution for residential Internet connectivity. A ZipWire modem device, for instance, is capable of a 15,000-foot reach. It can be very inexpensive (less than $20 in volume), and provides a symmetric data rate (384 kbits/s) which is well-suited to today's Internet infrastructure and content.

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ADSL hurdles

- Speeds cannot exceed 1.5 Mbits/s downstream and 64 kbits/s upstream

- Deployment to the home depends on fiber links
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