Copyright 1998 The Washington Post
January 21, 1998, Wednesday, Final Edition
Phone Firms Race To Speed Web Access;
New Standards to Challenge Cable Modems
Mike Mills, Washington Post Staff Writer
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.
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.
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.
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.
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.
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.
"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."
"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.
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.
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.
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.
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.
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.
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.
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.
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."
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Staff writers Elizabeth Corcoran in San Francisco and Mark Leibovich in Washington contributed to
this report. |
