From Financial Times (of London)Telecoms Review section.
NBTEL & NEWBRIDGE 3DSL: Pioneering new areas of business
The 3DSL technology aims to marry internet networks and
multimedia broadcasting, by Geoffrey Nairn
In an era of mega-carriers, small regional operators can
feel left behind the wave of innovation and change sweeping
through telecommunications. But this is not the case for
NBTel, the operator for the eastern Canadian province of New
Brunswick, which is pioneering new business areas and, in
particular, broadband services.
NBTel serves 750,000 customers in the province and more than
half live in rural areas. "They are not sophisticated users
so we have to offer applications that are simple and
straightforward," says Paul Hanson, director of strategic
planning for NBTel.
The characteristics of its market impose limitations on the
new types of service that NBTel can offer but
the operator has nevertheless realised it must become more
than a traditional "narrowband" telephone
company if it is to grow.
"Even though we are carrying more long-distance traffic than
at any time in our history, prices in the
long-distance market our falling so fast that we must focus
on emerging revenues," says Mr Hanson.
One area where NBTel has had considerable success is in call
centres and Mr Hanson attributes this
partly to the bilingual strengths of the province.
It has attracted more than 64 call centres from businesses
in North America and some European
companies are thinking about giving NBTel their call centre
operations, Mr Hanson claims.
Buoyed by its success with call centres, NBTel has decided
that its future depends on offering a much
wider range of services than a traditional regional
telephone company.
In particular, it is keen to offer a rich range of broadband
services such as video and high-speed internet
access over its network to increase its revenue stream from
small businesses - there are few big
businesses in this corner of Canada - and its 250,000
households.
NBTel was the first telephone company in Canada to be given
a broadcast licence similar to that of the
cable companies that already operate in New Brunswick. But
getting the licence was only the first hurdle
in NBTel's strategy to transform its copper wires into a
broadband infrastructure capable of much more
than simply handling phone calls.
Offering any type of video application is quite a challenge
for telephone companies. Video is not something
they typically knew much about and the technology is far
from mature.
NBTel therefore teamed up with Newbridge Networks, the
Canadian equipment supplier to help it realise its broadband
vision.
Using Digital Subscriber Line (DSL) technology, NBTel wants
to build a multimedia link into every home.
This link, which will initially be able to handle 6 to 10
megabits a second, will then be used to offer multiple
services: high-speed internet, TV, video on demand (VoD) as
well as traditional "dial tone" services.
The ability to easily offer different services is seen as of
paramount importance to the NBTel project - and a
big difference with other DSL pilot networks which are
typically marketed by focusing on a particular
application.
Today, the "killer application" for ADSL (Asymmetric Digital
Subscriber Line) is often seen as high-speed
internet access. But in an area such as New Brunswick, Mr
Hanson believes there are not sufficient
internet users willing to pay premium prices to surf the net
at higher speeds. "We cannot afford to offer just
high-speed internet," says Mr Hanson.
So NBTel is focusing heavily on the video capabilities of
its enhanced network and it plans to offer
subscribers a package of up to 76 TV channels.
Recognising that this move brings it into direct competition
with the cable TV operators, it is working hard
on a pricing strategy to attract customers. Mr Hanson
believes it has to charge less than $80 a month for
its package because that is equivalent to what it would cost
to sign up for cable TV and high-speed
internet as separate services.
In addition, NBTel's ADSL users will get a wide range of
additional services such as music, interactive TV
and local content. Much of the "additional value" contained
in the NBTel package has still to be defined but
Mr Hanson sees this as a big advantage as the technology
adopted allows it to easily configure different
services over its ADSL network to cater for changing
customer demand.
The key to this flexibility is the Newbridge 3DSL technology
which aims to marry the distinct worlds of
internet networks and multimedia broadcasting. A fundamental
element in the Newbridge system is
advanced video technology which takes feeds from various
video sources, such as terrestrial or satellite
broadcasters or content stored on a video server, and then
transmits them as internet-type data. This video
content which can be mixed with internet content and
delivered over the local ADSL networks.
Sending video broadcasts over the internet is quite a
challenge using conventional technologies because
each user requires a dedicated amount of bandwidth. As the
number of users grow, the bandwidth required
grows rapidly and can swamp the network. The Newbridge
system gets round this by using a technology
called IP multicast to deliver multiple channels of
broadcast video or other content efficiently to a TV or PC
- or any other device.
For a tractional telephone company, the idea that the
telephone is no longer central to its strategy can be
difficult to accept. But NBTel has no such reservations.
"You can access our service on a PC, phone or
TV, it really does not matter to us any more" says Mr Hanson
DIGITAL SUBSCRIBER LINE: A confusing number of technical
variants
To cater for the ever-changing needs of today's telecoms
operators, research laboratories are constantly inventing
fresh variations of DSL, by Geoffrey Nairn
Telecommunications is seen as a global industry but in
technical standards this is often far from the case. Nowhere
is this more evident than in the high-speed Digital
Subscriber Line (DSL) technologies that telephone companies
are installing because of their ability to offer fast
internet access and other broadband services over regular
telephone lines.
DSL encompasses a confusing number of technical variants
designed to cater for diverse market needs and regional
differences in the characteristics of the local loop - the
copper wires that connect homes and businesses to their
telephone exchange.
"Copper loops and broadband markets vary from country to
country - or even county to county," says
Rupert Baines, a consultant with UK-based Cambridge
Consultants and author of a report on DSL
technologies.
While there is a growing number of DSL variants, they all
aim to do much the same thing: allow phone
companies to relatively easily upgrade the extensive
networks of local loops in the "plain old telephone
system" (POTS) - to offer much higher data speeds.
Asymmetric Digital Subscriber Line (ADSL) is perhaps the
best known DSL technology and many telcos
are testing or rolling out commercial ADSL services. The key
characteristic of ADSL is that it offers users
faster speeds when receiving data - the downstream link -
than for sending data back over the upstream
link; in technical terms, the channel is "asymmetric".
This asymmetry coincides with the way people use the
internet: mostly they are downloading rather than
transmitting data. ADSL is therefore a favourite for
carriers seeking to attract internet users with much
higher speeds than those possible using a conventional
dial-up connection over the POTS network or
Integrated Services Digital Networks (ISDN).
Telecom Italia, for example, has recently launched an ADSL
service, initially available in 25 Italian cities. It
hopes to have 200,000 ADSL lines installed by the end of
2000. Telekom Austria also recently announced
its commercial ADSL service and aims to sign 100,000
subscribers within the next year. Most European
carriers are initially focusing their ADSL marketing efforts
on business internet users for whom ADSL can
seem a better bet than competing high-speed data networks,
such as ISDN or leased lines.
Telecom Italia claims downstream speeds of 5 to 6 megabytes
a second are possible although because of
the limitations of Italy's network infrastructure, for most
users the maximum speed will be about 2
megabits a second on the downstream link and 512 kilobits a
second on the upstream link. Nevertheless,
speeds of 1 to 2 megabits a second are more than 10 times
faster than ISDN or 50 times faster than a
dial-up modem connection.
Experts caution that while the speed improvements seem
attractive, ADSL can only boost the speed on
the "final mile" that leads into the business premises; if
the internet service provider cannot send data to
the user fast enough, or if there are bottlenecks elsewhere
on the internet, then users are not going to
experience such dramatic gains as the raw figures suggest.
"Those who expect to surf the internet at 6
megabits a second will be disappointed," warns Gabriel
Dusil, marketing director for Motorola's internet
and networking group.
Before embarking on a big expansion of ADSL, carriers want
to judge both the commercial viability and
technical feasibility of using it across their national
network. One big problem is that ADSL is heavily
dependent on the characteristics of the local network
infrastructure.
In cities and other areas with short local loop connections,
maximum speeds of up to 6 megabits a second
can be offered to most of the potential market. But in
regions with long local loops - such as suburban
areas of the US - or poor quality infrastructure, many
potential customers may have to be content with a
maximum speed of 1.5 megabits a second - and the carrier
with reduced revenues because ADSL tariffs
increase with speed.
"There is a dramatic variation between different countries
with respect to ADSL, which is critical to
understanding their economics, and that is in the actual
make-up and situation of their physical plant,"
says Mr Baines.
In the US, where average local loop lengths are greater than
in Europe, carriers are therefore more
interested in DSL variants that are not as demanding as
ADSL. These include ADSL2, a standard that
allows access beyond 4km, or Rate Adaptive DSL, in which the
speed automatically adjusts to suit the
length of the local loop.
High-speed internet access is far from the only service that
can be offered over ADSL networks. Indeed,
ADSL was originally specified for Video on Demand (VoD) as a
means of providing alternative access to
cable TV services. Telecom Italia's ADSL system draws on the
experience it acquiring in 1995 when its
Stream multimedia division ran a pilot project offering VoD
to selected households.
The technology has now returned to prominence thanks to the
growth of the internet and the telephone
companies' belief that there is a strong demand for
high-speed internet access from both business and
residential customers.
Interest in using ADSL for VoD has not gone away, however.
For example, in Hull, north-east England,
Kingston Communications, the local telephone company, has
announced it will build what it claims is
Europe's first ADSL-based interactive digital television
service. The service actually uses a proprietary
technology called 3DSL, developed by Newbridge Networks.
This is a complete system designed to allow
service providers to offer multimedia broadcast services
over a network infrastructure based on the internet
protocol and ADSL local loops.
There are several more DSL variants, the most ambitious
being Very High Speed DSL (VDSL) which, as
its name suggests, pushes the speed limit of copper wires to
13 megabits a second or more over short
distances. No doubt others are being invented in the
research laboratories to cater for the ever-changing
needs of today's telecoms operators.
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