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To: David Nelson who wrote (2390)	1/20/1998 8:08:00 PM
From: Jay M. Harris	Read Replies (2) \| Respond to of 9236

To all Aware threaders, Bill Gates loves to play both ends against the middle to accelerate bandwidth into the home. FYI DSL Deal Doesn't Worry Cable Modem Makers (01/20/98; 6:53 p.m. EST) By Malcolm Maclachlan, TechWeb <Picture>Industry leaders Microsoft, Compaq, Intel, and four Baby Bells have thrown their weight behind the development of digital subscriber line (DSL) technology, but those in the competing cable modem business aren't ready to throw in the towel. "We've been expecting it," said Gary Law, vice president of marketing and business development for Terayon, a Santa Clara, Calif.-based company developing cable modem systems with Cisco. "Microsoft has made it clear that what they care about is getting high speed Internet access into the home." Microsoft has already been working with GTE for months on DSL technology, Law said. Furthermore, it is no surprise that Microsoft was joined in the deal by Compaq and Intel, he said, since these companies have a tradition of working closely together to try to establish standards. After months of focusing investments on the cable industry, Microsoft and its consortium will push standards for DSL,<Picture> a technology which provides high-speed Internet connections over normal phone lines. Digital subscriber line technology has been slow to roll out, even slower than cable, said Michael Harris, president of the research company Kinetic Strategies. "DSL will definitely be a viable solution," Harris said. "But it's going to be more of a 1999 thing. That means cable companies will have all of 1998 to get ahead." Cable still has two advantages over phone line-based technologies, Law said. First of all, cable companies are used to working with content providers and are better at packaging equipment, access, and content for subscribers. Also, cable companies have been working out standards in their industry for years. Cable modems are just hitting their sweet spot in price; Law estimates that DSL will be three to five times more expensive than a comparable cable modem system when it rolls out. But so far, cable modems have not caught on. About 110,000 people around the country now access the Internet through cable modems, well below industry estimates of a year ago. In the long run, there will be a home/business dichotomy in the success of the competing technologies, according to Jeff Walker, a senior product marketing manager for Motorola. Unlike the Regional Bell Operating Companies, cable companies don't have an installed base in businesses. In the home market, however, they have a huge installed base and can provide the technology cheaper and sooner. Both systems have an advantage over ISDN, Harris said, because they use lines that already run in most homes, rather than requiring expensive installation. However, cable has a head start, largely because the Baby Bells have yet to address all the issues of how they will handle DSL traffic, both locally and in their backbone lines. The deal between Microsoft and its partners does appear likely to provide the momentum needed to establish standards for DSL. Lucent, which has lobbied hard for standards, on Monday released its new WildWire chip set for DSL modems, and a spokesman said the company plans to work with the group..