AWESOME FRONT PAGE STORY ON ADSL!
Who are you kidding? Conventional phone lines can't compete with cable
television wires for delivering interactive services, such as access
to the graphic riches of the World Wide Web and other multimedia
computing services. Or can it? Only about 1 percent of the capacity of a
copper phone line is used up by a voice conversation. So telephone
companies are racing to figure out how to develop the other 99 percent
fast enough that copper can compete with cable.
Digital Subscriber Line technology, the stuff that pumps up the amount of
data that can be transmitted across copper telephone lines, often appears
to be a confusing jumble of acronyms and megabit rates. But to understand
the current buzz on DSL, you really need to know only one number: 560
million.
That's how many copper telephone wires will be in place around the globe
by the end of this year, according to industry estimates. And it is the
potentially overwhelming size of the market that is driving the
telecommunications industry to develop ways to stuff those copper lines
with ever more bits. Most carriers expect booming demand for faster
Internet access and telecommuting capability, with its concurrent need for
remote access to corporate computing networks.
If telephone companies can reach that audience by investing in their
existing copper networks -- as opposed to building new fiber or coaxial
cable networks -- they can get reasonably priced services to market more
quickly. That in turn would allow them to compete effectively with cable
television companies, such as Tele-Communications Inc.and Time Warner
Inc., that plan to capture a market for high-speed data services over
cable and digital phone lines that Forrester Research Inc. expects will be
$2.5 billion in 2000.
The urgency to beat cable companies into this market is driving telephone
companies to examine more closely what they can do on their existing
networks.
"We realize that there is a gap between what ISDN can deliver and what
cable modems deliver," said Jerry Parrick, president of U S West
!nterprise Networking Services. "We're looking to ADSL to fill that gap."
The competitive drive has led to renewed interest in a kind of digital
line that sends more bits to the customer than the customer sends back.
Every major telephone company in the country is conducting lab tests on
such Asymmetric Digital Subscriber Lines. At least five -- Bell Atlantic
Corp., BellSouth Corp., GTE Telephone Operations, SBC Communications Inc.
and U S West -- have announced such ADSL field trials.
"ADSL is now a proven technology," said Rob Faw, president and chief
executive officer of Westell International and executive vice president of
Westell Technologies Inc., a company that pioneered use of ADSL technology
in its service access platforms. "We don't have to convince anyone anymore
that this stuff works. Now it's more a matter of how quickly we can meet
the price points and get it into the network."
Danny Briere, president of TeleChoice Inc., a Verona, N.J., consultancy
focusing on ADSL development, expects to see the first commercial
deployment of ADSL by late this year. "I think we'll see orders for
equipment this summer and then deployment will start by the end of the
year," said Briere. "I see Bell Atlantic and U S West as neck and neck as
to who gets there first."
In addition, the eight largest telephone companies (the seven current
Bells and GTE) recently galvanized around an approach to creating
data-to-the-home networks that uses ADSL to get customer traffic to a
central office, then aggregates traffic onto a high-speed backbone using
Asynchronous Transfer Mode, or ATM, which moves voice, video
and data in small chunks of a fixed size.
There are other clear signs that the push to boost copper is gaining
steam:
* Microsoft Corp., which announced plans to make its Windows NT server
compatible with cable modems, is now adding ADSL to that list.
* Westell Inc., a leading manufacturer of access systems using ADSL,
announced last week it is working with Microsoft to make sure that public
network applications for Windows NT will operate over lines equipped with
ADSL.
* Major equipment vendors, including Ericsson Inc., Lucent Technologies
Inc. and Nortel Inc., are at last stepping into, or in some cases, back
into the ADSL arena. ADSL has been pioneered by smaller vendors, such as
Amati Inc., AT&T Paradyne (a unit that Lucent plans to spin off), PairGain Technologies Inc. and Westell.
* Wall Street has discovered ADSL in a big way. Stocks of companies, such
as PairGain and Westell, have increased by four to six times within the
past year, while Amati's stock, which began trading a year ago at just
over $1, was valued at $21.875 on May 15. TeleChoice has tracked these
stocks, along with that of Adtran Inc., in a Copper Stocks rating that
last week hit $275.88, up 30 percent from the previous month.
What's the Deal?
DSL technologies leverage traditional modem and Integrated Services
Digital Networks, or ISDN, technology, to squeeze more information onto a
traditional phone line.
They use different forms of modulation, a technique that impresses voice
or data signals onto a copper line, to get more onto a copper telephone
wire than has been the case with standard voice phone calls. Voice calls
traditionally use just 4 kilohertz of bandwidth.
"We have copper wire into everybody's home, but we have only used 1
percent of that copper with traditional voice service," said Jeff
Waldhuter, executive director of access technologies lab for Nynex Science
and Technology. "Dial-up modems do a good job of maximizing the
4-kilohertz bandwidth, but ADSL will make use of the remaining 500
kilohertz of bandwidth."
Commercial ADSL currently delivers 1.5 megabits per second downstream and
64 kilobits per second upstream. ADSL products that deliver 4 to 6 Mbps
downstream and up to 640 Kbps upstream will be out in late 1996.
Although developed with video delivery in mind, ADSL is actually much more
suitable for data transmission and has particular advantages over the
telephone companies' current best option for residential data service,
ISDN. Many of those advantages are due to the fact that ADSL, unlike ISDN,
would not be a service based on existing telephone company switches.
Therefore it doesn't require an expensive software update to every switch
and is much simpler to configure and put into service. And because it
isn't a switched service, it does not use up switch capacity and wouldn't
have to be priced on a usage basis, as ISDN is today.
We definitely see ADSL as something we could use to offer a flat-rate data
service," said Mark Gallegos, product manager of new business development
for Pacific Bell. "That's part of its appeal."
The telephone companies have painfully discovered that the Internet access
community is accustomed to $19.95 "all you can eat" services from Internet
service providers and newcomers, such as AT&T WorldNet, and are rebelling
against the pay-as-you-go pricing schemes that telcos set up for their
ISDN offerings.
Finally, ADSL does not disrupt analog phone service -- high-speed data
services can coexist with traditional voice service on the same copper
lines.
ADSL also has one significant advantage over cable modems: The bandwidth
it delivers is not shared with other users. At first glance, the 10-Mbps
bandwidth of a cable network equipped with modems seems significantly
greater than the 4- to 6-Mbps capacity that commercial ADSL is likely to
deliver. But the ADSL bandwidth is dedicated to a single user, while
getting more than three households online within a cable network node
would quickly reduce the bandwidth available.
How Fast Is Copper?
There are other digital phone line technologies in the running. Telephone
companies already use a kind of digital line known for its high bit rate
to provide 1.5-Mbps service over two pairs of copper wires, without
repeaters.
At least one High-Speed Digital Subscriber Line, or HDSL, vendor, PairGain
Technologies, is leveraging its high-speed technology in a version
designed for data access into the home. The Megabit Modem runs over a
single telephone line and can deliver 768-Kbps data access in both
directions over a distance of 7,500 feet from a central office. That gives
telecommuters the chance to send big files, as well as
receive them.
The idea, said PairGain Chairman and CEO Charles Strauch, is to get into
the market quickly with technology that is available and less expensive.
"HDSL is more mature and has already come down the cost curve," said
Strauch, whose company's earliest megabit modems cost about $1,000. "We'll
see prices fall quickly on this as volumes pick up."
U S West is using HDSL technology from PairGain, as well as ADSL systems
from Westell, in its Boulder, Colo., trial this spring.
Looking further into the future, there is Very High Speed Digital
Subscriber Line, or VDSL, service, at speeds up to 52 Mbps -- five times
what cable operators promise for their high-speed data services.
Orckit Communications, an Israeli manufacturer, demonstrated a VDSL modem
at the Telecom '95 exhibition in Geneva in October 1995.
"We have several of those modems spread around testing this VDSL
technology," said Dan Arazi, vice president of Orckit's marketing and
sales. "People never believe it works until they see it. But they are
testing it now on live loops, so that they can see how it is affected by
environmental conditions."
But Arazi, like PairGain's Strauch, doesn't see these very high-speed
products becoming commercial and cost-effective in the near term. Orckit
will introduce HDSL over a single telephone line system in June at
Supercomm '96 in Dallas and will launch its commercial ADSL product, with
downstream speeds of 8.2 Mbps, in the third quarter of
this year, Arazi said, at an initial end-to-end price point of $3,000.
So instead of seeing VDSL delivering 52 Mbps over a long copper telephone
line, most industry experts expect to see a gradual transition, in which
carriers push fiber-optic connections closer and closer to the customer
and use one of the digital technologies over the final copper link.
"This becomes a graceful migration for the copper plant," said Robert
Olshansky, manager of advanced service platforms for GTE.
So What's The Catch?
As with most new technologies, however, there are still hurdles that
high-speed digital phone technologies, beginning with ADSL, must overcome.
Prices for the equipment that must be put in residences and telephone
offices are still two to five times higher than the telephone companies'
target prices, and they won't drop until volume orders come in.
The target price we hear most often is $500 for both ends of the ADSL
system," said Orckit's Arazi. "$500 is definitely a realistic price in the
future, but I don't think it will happen in 1997."
There's also worry that ADSL modems won't perform up to snuff in real-life
networks, where the copper wire can be old, wet or perform below
expectations. "These are the kinds of issues we're working out in the
trial phase," said Sean Dalton, ADSL product manager for GTE.
In addition to ADSL modems, the carriers must refine the network
infrastructure that can support a widespread high-speed data access
service. Since ADSL is not a switched service, the traffic must be routed
into an existing backbone network, such as frame relay service, where
"cells" of data are moved about, or the carriers must build some
new backbone that will deliver and pick up packets of digital data to and
from customers' residences or offices. Then, there's the matter of making
it all work efficiently.
"We need to understand that this is not just the access platform itself,
but also the network management, addressing, interoperability of routers
and other systems," said Kamran Sistanizadeh, director of network systems
engineering for Bell Atlantic.
"We're running a marathon here, and we're really just getting out of the
starting blocks," said Jim Bender, president of Aware, an ADSL technology
company. |
