To: MikeM54321 who wrote (7160 ) 6/3/2000 8:30:00 AM From: D. K. G. Read Replies (2) | Respond to of 12823
Telecom Giant SBC Awakens forbes.com June 02, 2000 By John Shinal SILICON VALLEY. 11:40 AM EDT-For the first few years after the Federal Telecommunications Act was passed in 1996, SBC Communications moved with the speed of a sloth in rolling out high-speed data services. As SBC slept, upstart service providers such as Covad Communications bought tens of thousands of SBC's digital subscriber line (DSL) connections at wholesale prices and resold them to eager consumers. This month, however, the slow-moving giant will begin to walk and by year's end may actually be running. That will put more pressure on other service providers--including cable giants Time Warner (nyse: TWX) and AT&T (nyse: T)--that plan to offer high-speed Internet connections. Earlier this year SBC (nyse: SBC) first unveiled its plans, which it calls Project Pronto, without providing much detail. In documents SBC filed with the Federal Communications Commission (FCC), the company has detailed how many and in which markets it will offer its broadband data services. SBC was required to file the documents with the FCC in February to get approval of its acquisition of Chicago-based Ameritech, another regional Bell. The documents show that SBC plans to install new equipment that it calls "neighborhood gateways" to offer DSL service in locales served by its subsidiaries, including Southwestern Bell, Ameritech, Pacific Bell, Nevada Bell and SBC's own data services unit. By the end of 2000, SBC plans to install the gateways in more than 9,000 neighborhoods. Ameritech will install more than 3,700 of them, while Pacific Bell will have 2,500 and Southwestern Bell 2,300. By installing the neighborhood gateways, also called remote terminals, SBC is shortening the length of the so-called local loops that carry phone traffic from neighborhood switches into homes. Because the speed of data sent over phone lines using DSL technology slows markedly the farther the signal travels over a copper wire, SBC will reduce the distance limitation that has helped slow DSL deployment. SBC will buy the gateways from Alcatel (nyse: ALA) and Advanced Fibre Communications (nasdaq: AFCI). SBC's technology roadmap, which adds another layer of equipment into existing phone networks, flies in the face of the trend that sees most service providers looking for ways to simplify their networks to reduce operating costs. New network designs that will ultimately send Internet traffic directly over fiber-optic cable are all the rage among telecommunications companies. Yet the plan will allow SBC to offer DSL service that can carry traditional voice traffic and high-speed data better than other DSL technologies, including the so-called g.lite standard. Many analysts believe that technology, a low-power version of DSL being built into many DSL computer modems, won't work for carrying voice traffic. Even though SBC is using older technology, its plan will let it bring broadband competition to many homes that have so far had access only to cable modem hookups. "They're going to crank up the competition in a lot of areas," says Jeffrey Kagan, a telecommunications industry analyst based in Atlanta.