WallSt.J 2/17:Article on SBC, ALA and DSL:ÿÿÿ
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ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Bells Find Out Fiber-Optic Lines,
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ High-Speed Web Access Don't Mix
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ By LESLIE CAULEYÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Staff Reporter of THE WALL STREET JOURNAL
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Phone companies are counting on digital subscriber-line
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ technology, known as DSL, to be their ticket to the world
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ of high-speed Internet access. They've also been betting
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ on another technology, fiber optics, to upgrade the old
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Bell networks, at a cost of billions of dollars.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Now the Bells face a difficult quandary: The two
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ technologies are the equivalent of oil and water. They
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ just don't mix.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The incompatibility presents a major hurdle for the Bells
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ as they try to outmaneuver the cable-TV industry for
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ position in the next phase of the online revolution:
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Internet service that is super-fast and "always on," just
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ like a TV signal. Hoping to build and own the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ infrastructure that will one day bring high-speed Web
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ access to America, the phone and cable industries are
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ running a high-stakes race for households and market
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ share, a technological land grab.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ First, though, the Bells have to resolve a more pressing
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ problem. DSL was designed to be delivered on the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Bells' century-old copper networks, not on the new
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ fiber-optic networks. The old copper networks gave
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ each customer a "dedicated" wire (actually, a pair of
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ them) to carry the electrical signal from the phone
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ company's central office to the kitchen phone and back.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Fiber networks, on the other hand, carry a signal that
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ moves as pulses of light over hair-thin glass tubes along
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ ever-changing routes, selecting the most efficient path
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ available depending on volume and other factors.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Right now, the universe of high-speed Web service is
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ minuscule. According to a report by Sanford C.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Bernstein and McKinsey & Co., there were about
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ 228,000 residential DSLÿcustomers at the end of 1999.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ By comparison, there were 1.62 million customers for theÿ
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ cable companies'ÿ high-speed Web access, delivered using
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ powerful modems and upgraded cable lines.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Tom Wolzien, a cable analyst at Sanford C. Bernstein,
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ gives the cable industry a two-year lead over the Bells.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The high-speed market "is cable's to lose," he says. The
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Bernstein-McKinsey report says many of high-speed's
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ best potential customers live in areas already serviced
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ by upgraded cable lines but not easily reached by DSL.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Cable-modem Internet service is far from perfect. It is a
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ "shared" service, so users log on to the same fat pipe.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ They may experience slowdowns in transmission during
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ peak usage times, just as the water pressure in an
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ apartment building can drop if everyone takes showers at
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ once.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Some phone-industry experts say because the high-speed
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ cable lines are "shared," they also may be more
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ susceptible to security breaches. The cable industry says
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ its high-speed service is no more vulnerable to hackers
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ than competitors', properly managed networks don't slow
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ down and network kinks will be ironed out in time.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The phone companies have known for a long time about
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ the DSL-fiber clash. Still, it's difficult to see how they
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ could have avoided the current predicament. Fiber-optic
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ lines, with almost unlimited capacity, have been
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ indispensable in enabling the Bell networks to handle
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ millions of new cellular phones, fax machines and
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ second telephone lines. The fiber lines also are easier
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ and cheaper to maintain. But competition forced the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Bells' hands. When cable companies jumped in with
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ aggressive high-speed offerings, the Bells' dusted off
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ DSL, a 15-year-old technology that had been sitting on
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ the shelf for years, and hastily repackaged it as a new
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ technology that would light a fire under consumers.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Right now, getting DSL can be an enormous headache. It
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ can be downright impossible in many new communities
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ that the Bell companies have wired with fiber lines.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Even senior Bell execs haven't been able to get around
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ the problem. Sol Trujillo, chairman of U S West Inc., the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Denver Bell, discovered last year that he wasn't eligible
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ for DSL in his new Cherry Hills home because the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ neighborhood was served by fiber lines.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ The remedy? U S West ran a monster T-1 line, the kind
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ of data line favored by big businesses, to the chairman's
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ newly constructed home. To this day, he still can't get
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ DSL.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ "None of us has a solution to get DSL to the end" of the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ fiber lines, says Amy McIntosh, president and chief
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ executive of Bell Atlantic Corp.'s data unit. Still, Ms.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ McIntosh says, she is confident the problem will be
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ solved soon. "I'll take our hand of cards versus the cable
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ companies' any day."
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Even when it has copper lines to run on, DSL has other
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ quirks. Network experts say the DSL lines shouldn't be
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ located with other data lines in the same "sheaths," the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ big bundles that are buried in the ground. That's because
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ DSL lines can pick up electronic interference from other
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ lines, and also create it.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Before installing DSL, the Bells typically dispatch a
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ crew to check sheaths for the presence of other data lines
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ and remove or relocate them if necessary. These service
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ calls, called "truck rolls," are expensive, and most Bells
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ try to avoid them.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Then there is the distance problem. Currently, the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ farthest a DSL signal can travel without degradation is
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ about 15,000 feet, or a little less than three miles. That
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ means people have to live within 15,000 feet of a Bell
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ central office, where DSL signals originate, to be
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ eligible for the service. But even then, if you have fiber
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ lines you are out of luck. U S West's Mr. Trujillo, for
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ example, lives only 9,600 feet from a central office.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ There are other problems, depending on how the local
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ network is laid out. Some lines snake around
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ underground so much they can easily eat up 15,000 feet
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ long before they reach houses that would seem to meet
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ the DSL distance requirement.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ DSL performance also can be affected by such things as
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ the thickness of the copper wire it is riding on. Thin
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ wires don't handle DSL as well as thick ones, which are
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ pricier. The problem is, some Bells, aiming to cut down
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ on costs, have deployed miles upon miles of
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ thinner-gauge copper over the years. As a result,
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ customers who live in those areas may have to make do
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ with slower DSL connections for a long time. The Bells
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ could just replace the lines with thicker copper wiring,
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ of course, but that would be expensive.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ And then there are the obstacles many consumers have
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ created inadvertently for themselves, by doing their own
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ "inside wiring." For more than a decade, customers have
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ been permitted to attend to the telephone wiring inside
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ their homes. The all-too-predictable result in many
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ homes is a mish-mash of wiring schemes, many of which
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ aren't compatible with DSL either.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ John Goldman, a spokesman for BellSouth Corp., says
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ DSL installers sometimes have to make several trips to
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ clean up the mess. "It can be a real nightmare," he says.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Clearing the hurdles won't be cheap. SBC
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Communications Inc., the big San Antonio Bell, recently
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ committed $6 billion to overhaul its network to better
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ accommodate DSL. As part of the effort, SBC says, it is
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ working with manufacturers to come up with solutions to
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ DSL's problems.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ One consequence of the DSL-fiber clash is that Bells
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ with the highest-quality networks are among the least
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ prepared to offer DSL. Because of aggressive upgrading
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ over the years, Bell Atlantic and BellSouth have
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ top-notch networks that are crammed with new fiber
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ lines. Both acknowledge the issue and say they are
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ working with vendors to come up with answers.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Equipment makers have been working for years to
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ resolve the problems. Alcatel, the French telecom-gear
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ manufacturer, is currently in field trials with a "remote
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ terminal," a kind of adapter that is supposed to let DSL
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ and fiber interconnect. Once installed in neighborhoods,
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ the remote terminals would act as mini "central offices,"
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ extending the reach of DSL while creating a path for
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ fiber users.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ More than four years in the making, the remote units,
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ crammed with miniaturized components, have their own
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ battery backup power -- necessary in the event of a
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ power outage, because they are powered by local
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ utilities. They range in price from about $1,000 to more
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ than $50,000 and can handle 24 to 2,000 lines each. The
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ smallest is the size of a big ice cooler; the biggest, the
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ size of a small Volkswagen bus.
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Alcatel Vice President Paul Segre says a
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ commercial-grade model should be available in about
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ six weeks. SBC, anxious to push ahead, began using test
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ units in January and says they work fine. Bell Atlantic,
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ another customer, won't deploy the terminals until field
ÿÿÿÿÿÿÿÿÿÿÿÿÿÿ tests are finished around midyear, Bell Atlantic figures. |
