Phone Firms Race To Speed Web Access;
New Standards to Challenge Cable Modems
Mike Mills, Washington Post Staff Writer
ÿ Imagine walking up to any computer in your house, typing in an Internet address and instantly viewing a page on the World Wide Web. No more busy signals. No more seeming eternities for a Web page to materialize. And no tying up the phone line.
ÿ Cable companies are just beginning to offer such high speed, no-hassle Internet access. But now their rivals, the local phone companies, are finally in gear too.
ÿ The regional Bells and GTE Corp. are about to announce an agreement with Microsoft Corp., Intel Corp. and other computer industry giants on standards for a new kind of modem and phone company service that, analysts say, could bring mass-marketed high-speed Internet access to every home and business.
ÿ The standards would not only make the modems affordable and ubiquitous, but also would ease the construction costs that had made the technology unprofitable for phone companies to offer.
ÿ Officials from Intel, Microsoft and Compaq Computer Corp. would confirm only that they plan an announcement involving Internet access over phone lines at the Comnet trade show in Washington next week. News of the agreement was first reported in yesterday's New York Times.
ÿ But the agreement will involve many more businesses than those companies, sources said; more than two dozen hardware and software makers, as well as telephone companies, will participate.
ÿ "We're really at the beginning of an era of competition in consumer Internet access," said Frank Gens, an analyst for International Data Corp. in Framingham, Mass. "It's still off in the distance, but you can really start to see the death of the bandwidth crisis."
ÿ "Bandwidth" is the computing world's term for the carrying capacity of a communications connection --how much information can move per second --and Intel, Microsoft and Compaq all are spending money to increase it. For instance, Microsoft invested $ 1 billion in Comcast Corp. to help the cable company strengthen its cable network so that it can send and receive data. Intel has investments in cable modem ventures, including @Home, a California company, as well as satellite Internet businesses.
ÿ The agreement reached between the Bells, GTE and the computer industry involves a technology known as "digital subscriber line," or DSL. It's essentially a way to cram more data through copper telephone lines, allowing them to carry multiple "channels" of data.
ÿ The common standards would allow consumers to choose among competing brands of DSL modems --costing from $ 100 to $ 200 --that would work in any personal computer. Phone companies would have to provide DSL service over their lines, and most today are only test-marketing the heretofore costly service.
ÿ The new agreement shows that software giant Microsoft isn't counting only on cable for high-speed Internet access to the home. "It's a vote for telephone lines. That's very encouraging for us," said George Hawley, president and co-founder of DSL equipment maker Diamond Lane Communications Corp. of Petaluma, Calif.
ÿ Researchers have long known that voice conversations use only the lowest electronic frequencies that travel along copper lines. The higher frequencies, they learned more recently, can be used to carry data in the computer language of ones and zeros.
ÿ DSL technology was developed to help telephone companies carry video programs over their traditional copper telephone lines at speeds up to 8 million bits of data per second (compared with today's computer modems, which operate at a top speed of 56,000 bits per second). Phone companies, including Bell Atlantic Corp., quickly found that the costs of equipping homes for DSL video signals exceeded the demand for such a service.
ÿ But the rise of the Internet opened a new use for DSL. In 1996, Bell Atlantic began new market tests using digital subscriber lines for high-speed Internet access in Northern Virginia.
ÿ Trial users had a service through which they could breeze through pages on the World Wide Web like leafing through a book --for about $ 50 a month, including Internet service provider fees. Users could talk on the phone while surfing the Web and, in fact, they no longer had to "dial up" their Internet provider at all, because DSL offers a continuous, 24-hour connection.
ÿ Customer response has been "extremely positive," said Mark Wegleitner, vice president of new services technology for Bell Atlantic. "They like the speed. They like the always connected environment. In general, we would find it very difficult to deny this to them once they've started using it."
ÿ The new standards being adopted by the computer and phone industries remove a technical drawback that added significantly to DSL's cost: the need for phone companies to install a "splitter" outside each home to separate data and voice signals.
ÿ The resulting DSL "lite" moves data at 600,000 to 1.5 million bits a second --less than 8 million bits per second, but still the speed that Web surfers crave. The lower bandwidth means no interference with voice calls.
ÿ People who want more bandwidth still can choose a splitter. But the latest technical breakthrough means that DSL can be marketed like any other computer modem --requiring no visit by a phone company.
ÿ Local phone companies are gradually upgrading their switches to offer DSL services. Bell Atlantic's Wegleitner said the company will begin offering the new service on a market-by-market basis by mid-year. "Washington will be very high on our list," he said.
ÿ Still, critics from the rival cable industry say the switch upgrades themselves could cost enough to reduce DSL's competitiveness. "There are significant challenges in deploying this," said Stephen Dukes, vice president of network technologies at Tele-Communications Inc. in Denver.
ÿ Bell Atlantic and other local phone companies have been promising new digital services, from Internet access to video, for years. It took nearly a decade for an older form of high-speed Internet access, called ISDN (integrated services digital network), to actually become available in this region. And it has been plagued by technical problems and pricing disputes.
ÿ The Bells also have been focused on other priorities, like winning regulatory approval to enter the $ 80 billion long-distance business. "They're so involved in getting into long distance, DSL hasn't been a high-priority for them," said John Hunter, an analyst for TeleChoice Inc. in Verona, N.J.
ÿ It is a high priority now --mainly because the Bells fear the potential of cable modems --and the result is a horse race that could benefit consumers.
ÿ International Data Corp. estimates that 16,000 homes will have DSL technology by the end of the year, up from merely hundreds of test homes in 1997. By comparison, the firm estimates there will be 300,000 homes wired for ISDN service by year's end, compared with 160,000 this year.
ÿ Cable modems will be in roughly 200,000 homes by December, IDC predicts, up from 100,000 in 1997. But DSL will eclipse them both by 2001, IDC estimates. By 2002, about 20 percent of Internet connections in U.S. homes will be either cable or DSL, the firm predicts.
ÿ Staff writers Elizabeth Corcoran in San Francisco and Mark Leibovich in Washington contributed to this report.
ALSO...from a link at the C-Cube thread:
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With phone and computer firms massing this week to endorse standards for warp-speed service over phone lines, the Telephone Guy will soon vie with the Cable Guy to be your escort to the stars.
Before the Tuesday opening of the ComNet trade show in Washington, phone companies like Ameritech and GTE and computer biggies like Microsoft, Intel and Compaq Computer are expected to announce a standard for Digital Subscriber Line service over telephone lines with a transmission speed rivaling that of Internet service over cable-TV lines now offered by the At Home Network and its cable-firm partners.
Copper phone wires reach more customers than cable: There are nearly 200 million phone lines in the U.S. and more than triple that worldwide, including businesses cable doesn't touch. So 3Com couldn't be happier about the DSL standard. Like the Internet on cable, DSL on phone lines is made possible by modems. And 3Com has roughly half the worldwide modem market, with its US Robotics brand products ("The Future Is 3Com," December 1, 1997).
3Com's CEO, Eric Benhamou, will be ComNet's first keynote speaker, and his modem-mongers will be close by. "You'll see some very interesting announcements from us," says Rick Edson, senior vice president for new business initiatives at 3Com. The company is already on its second generation of DSL modems, with phone companies field-testing them here and abroad.
This week's standards agreement overcomes one problem that was stalling DSL's deployment: Too many proposed alternative standards, making mass-produced modems impossible. "Now that we're solving this Baskin Robbins approach to DSL standards," says Edson, proponents can concentrate on attacking other barriers.
For one, phone companies will need to deploy DSL -- modems and network gear across their plants -- and historically, says Edson, telcos have renovated only about 7% of their plant each year. For another, DSL service, at rumored introductory rates of $50 a month, would cannibalize demand for a service called "T-1" that's nicely profitable today for phone companies at $600 a month. This conflict is a big reason why At Home Network, the $40-a-month cable-modem service, isn't fearing for its life just yet.
DSL is chugging along, though. Now available in pilot programs from carriers like USWest Communications are DSL Internet access and telecommuter networking that are similar to -- if more expensive than -- the cable modem service now used by about 100,000 cable subscribers. Other potential DSL offerings include enhanced home shopping and video-on-demand with simulated VCR controls. Unlike the costly phone service offered today called "ISDN," DSL won't require customers to lease a second phone line to make plain old phone calls.
Despite DSL's fat bandwidth, current modem technologies aren't quite powerful enough to allow transmission of live TV or High Definition TV over copper phone lines. Video-conferencing may also prove a challenge because of the split-second delays introduced by error-correction coding.
But this week's agreement to unite behind a DSL standard shows the eagerness of phone firms to compete with cable firms for the potential annuities from selling rapid communications services. As the competition heats up, maybe we'll even be able to afford them.>>
-Bill Alpert |
