11/19 WSJ MCI WorldCom to Launch Web Service Via Familiar Phone Lines
By Stephanie N. Mehta
Staff Reporter of The Wall Street Journal
MCI WorldCom Inc. said it will launch a nationwide, ultrafast Internet-access
service via traditional copper telephone lines.
The service, known as Digital Subscriber Line, or DSL, allows customers to
surf the Internet at speeds several times faster than they can using
conventional computer modems. MCI WorldCom said it will sell the service
directly to small businesses and Internet-service providers. The Internet
companies, in turn, will sell the product to consumers.
MCI WorldCom's plan, unveiled yesterday at the Comdex computer-industry trade
show in Las Vegas, helps validate DSL technology. Despite stepped-up efforts by
the Baby Bell telephone companies to deploy such services, digital-subscriber
lines still trail cable modems as the broadband-access medium of choice among
small companies and consumers.
"To date, we haven't been really optimistic on DSL because a big national
telecommunications company hasn't stepped to the plate in terms of providing
broadband," said James L. Freeze, an analyst with Forrester Research Inc. The
MCI WorldCom launch "changes that."
Indeed, MCI WorldCom said it expects consumers to be able to purchase the
high-speed service plus online access from their Internet-service providers for
about $40 to $60 a month -- a rate comparable to current cable-modem packages.
U S West Inc., the Denver-based Bell, earlier this year offered a package of
DSL and Internet services to residential customers for about $60 a month.
The business product, aimed at companies with multiple computers on a local
area network, will start at $500 a month, including Internet access. The
company said it expects to offer the service in 25 major metropolitan areas by
March.
To be sure, DSL has its shortcomings. Customers who live or work several
thousand feet away from a telephone-company office can't achieve maximum
downloading speeds, thus limiting MCI WorldCom's rollout to major cities and
suburbs. And in most cases, MCI WorldCom will have to reach small-business
customers by leasing copper lines from the Bell telephone companies or GTE
Corp. "If we want to be an ubiquitous provider, we have to cooperate with other
players," said John Sidgmore, vice chairman of MCI WorldCom, based in Jackson,
Miss.
With its planned DSL rollout, MCI WorldCom adds to its arsenal of so-called
broadband products, which allow customers to download vast streams of voice,
data and video traffic. "You've seen everybody in the industry rushing as fast
as they can to get into broadband," Mr. Sidgmore said. Competitors include AT&T
Corp., which hopes to provide broadband services to consumers via
Tele-Communications Inc.'s cable network and Sprint Corp., which recently
announced its own Integrated On Demand service. "You'll see MCI WorldCom being
very aggressive on the broadband front," he said.
(END) DOW JONES NEWS 11-19-98
12:46 AM
11/18 T =MCI WorldCom's Sidgmore:Voice To Be Thing Of Telecom's Past
LAS VEGAS (Dow Jones)--In five years time, the Internet will consume 90% of
traffic on telecommunication lines, reducing traditional voice communication to
"a niche market," said the chief executive of MCI WorldCom Inc.'s (WCOM) UUnet
Technologies Inc. unit.
John Sidgmore said in a keynote address at the Comdex computer trade show
here that bandwidth, or the size of the Internet's pipeline, is doubling every
three months, equaling an annual growth rate of 1000%. And that growth rate
will increase, he added, dispelling the notion some have espoused that the
Web's rapid expansion will soon peak.
"We've had the beauty of small numbers working for us. But I think demand
will continue to surprise us," Sidgmore said. "There has never been an industry
that has scaled at this pace."
Sidgmore's remarks, made in the final keynote speech of the sprawling trade
exposition, came as his company announced a national digital subscriber line
service, UULink DSL, which he said was the first major roll out of DSL service
in the country.
The technology, which provides faster Internet service than the traditional
dial-up access, will be deployed for consumer use on American Online Inc. (AOL)
and Earthlink (ELNK), two of the industry's largest Internet service providers,
next month, he added.
But faster Internet access should not necessarily be a commodity, Sidgmore
said.
Internet users want to pay $21 a month, "or whatever Steve wants to charge,"
he said, referring to Steve Case, chief of AOL. But building the Internet
backbone is expensive, Sidgmore added.
The battle over fees for Internet service will likely be a long one, he said.
Eventually, Internet users may be charged one fee for local Web access and a
separate fee for long-distance service, according to Sidgmore.
He criticized phone companies for not building robust networks and scolded
them for not moving faster to embrace DSL technology. Sidgmore also criticized
those who argue that Web access should be free, naming Microsoft Corp.'s (MSFT)
chairman and chief executive Bill Gates.
"Bill Gates thinks bandwidth should be free. But we think software should be
free," he said, drawing cheers from the audience.
(END) DOW JONES NEWS 11-18-98
10:15 PM
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