Start-Up Extends the Reach Of DSL for Phone Companies
By DEAN TAKAHASHI
Staff Reporter of THE WALL STREET JOURNAL
SANTA CLARA, Calif. -- High-speed Internet access over ordinary phone lines is finally rolling out across the country, but not without frustrating speed bumps. Anybody who lives more than a couple of miles beyond a phone company's central-office switch has been out of luck.
Now, a Silicon Valley start-up has a solution for at least some desperate speed freaks. Integrated Telecom Express Inc. Thursday will unveil a chip that extends the range that a high-speed Internet connection can travel from a central-office switch to 3.8 miles, or 20,000 feet. Currently, such connections run out of steam at between 12,000 and 16,000 feet. The chip also drastically lowers the price of the "digital subscriber line," or DSL, modems that use the chip, from about $150 to less than $100. And the chips work regardless of the kind of DSL equipment in the central-office switch, the company says.
"We'll help the phone companies get past the low-hanging fruit and reach more of the customers," says Richard Forte, a former Advanced Micro Devices Inc. executive who became chief executive officer of ITEX in July.
Reducing the Noise on Phone Lines
Indeed, ITEX's technology and developments by rivals could mean faster adoption of DSL. That's because they give DSL chips the smarts to separate the signals on a telephone line from the noise, or static, that results from flaws such as squirrels chewing through phone wires. Beyond that, a DSL chip has to reduce the noise, either by sending signals that cancel it or by otherwise minimizing its effects. The more noise eliminated, the longer the modem's reach.
At 12,000 feet, phone companies can sell DSL to only about half of the residents served by a central-office switch. With 20,000 feet, that number gets closer to 75%, says Will Strauss, an analyst at Forward Concepts in Tempe, Ariz. That boost is important, because DSL is lagging behind the deployment of less costly cable-TV modems, which provide similar high-speed Internet access and got going about a year earlier than DSL. "ITEX can have a pretty big effect on the market deployments," says Mr. Strauss. "It's enough to change your perception over how fast this market is going to unfold."
Many analysts believe DSL will overtake cable, which has the drawback of being a kind of party line-the communications capability has to be shared among everyone in a neighborhood. The more new customers, the slower the service for everybody. By contrast, DSL's delivery speed is dedicated, or fixed, for each user.
The drawback is that the clarity of a DSL signal lessens with distance. What ITEX does is filter the signals from the noise by transmitting corrective impulses that reduce the effects of noise and precisely control the amount of power used in the product -- which also generates noise. ITEX is unique in that it shares the DSL processing workload with the microprocessor in the user's personal computer. This cuts costs by simplifying ITEX's chip: It uses only one million transistors, compared with five million or six million in competitors' two-chip products.
Chip Can Slow Down PCs
There are tradeoffs. If ITEX miscalculates and relies too much on the microprocessor, it can slow down the computer, taking away processing power from applications such as games, says Shannon Pleasant, an analyst at Cahners In-Stat in Scottsdale, Ariz. Mr. Forte contends that ITEX uses only about 20% of the processing power of a 300-megahertz Pentium II chip, leaving plenty of horsepower for games and video.
ITEX has been able to attract $26 million in funding from investors including computer giant Intel Corp. and United Microelectronics Corp. in Taiwan, a contract chip manufacturer that will supply chips if needed.
ITEX will have lots of competition, including Texas Instruments Inc., Lucent Technologies Inc., Conexant Systems Inc. and Broadcom Corp. In comparison with some of these giants, ITEX is tiny. It has 110 employees and little revenues to date. Texas Instruments' DSL marketing manager, Todd Andreini, said his company believes its DSL chips will have all the same benefits described by the ITEX officials. Conexant and Lucent officials also say they aren't trailing behind ITEX.
But Max Liu, the vice president of engineering who helped found ITEX in 1997, says his company isn't trusting itself to blind luck. "We've put a lot of years of effort into this," Mr. Liu says. "It's not a black art. It's systematic engineering."
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