well the story continues.......My GUT Feeling is still in this play .
I'm really not hyping ...I'm HOPING...
AOL Does DSL -- Launches Multi-City Trials with Bell Atlantic,
BellSouth, GTE, SBC/Pac Bell, and U S WEST Major News
Copyright c 1998 TeleChoice, Inc.
April 2, 1998 -- AOL has securely fastened on its life belt (GTE Internetworking)
and cautiously waded into the DSL waters. America Online announced it will begin
conducting field trials for high-speed access to the AOL service by utilizing DSL
broadband services provided by GTE Internetworking.
America Online is the first major marketing powerhouse to really throw its weight
behind DSL. Most of the other entities that have announced DSL services have
their roots as transmission and service providers. AOL has achieved its standing in
the ISP arena through sheer marketing acumen. As such, this is yet another major
milestone in DSL.
AOL, in interviews with The TeleChoice Report on xDSL, said that the DSL trials
are one of several broadband approaches that are being pursued to take AOL's
services to the next higher level of bandwidth and capability. AOL revealed that it
has been quietly undergoing a series of cable modem trials, which today number in
"thousands of subscribers" nationwide. AOL is also intent on evaluating upcoming
wireless connectivity options.
GTE Internetworking will provide the integration services for these initial tests,
coordinating between AOL and the regional phone companies providing the DSL
service in selected markets across the country. The underlying telcos will provide
AOL their standard DSL service, interconnected to AOLnet, which is maintained
by GTE Internetworking.
In addition, AOL Interactive Services will work with its content partners to deliver
special high bandwidth content that will be unique to these high-speed access users,
and with its major computing partners to ensure that enhanced speed access is
broadly available to the growing market of new Internet users who are buying PCs
to sign up for access to AOL and the Internet.
AOL's initial field trials will take place in Birmingham, Ala. (BellSouth); Phoenix,
Az (U S WEST); the Greater Bay Area, Calif. (SBC/Pac Bell); the Northern
Virginia suburbs of Washington, D.C. (Bell Atlantic); and Redmond, Wash
(GTE-ILEC). TeleChoice expects about 200-300 subscribers to be taking part in
the test, with installations starting within the month.
Because regional telephone providers use different xDSL equipment and multiple
standards in different cities, AOL will be working with a number of providers to
bring this technology to its members. Also due to this, the service offered to the
AOL subscribers in each of these areas will differ according to the underlying
provider services; so, some users may get 384Kbps service while others might get
768Kbps service.
Pricing is aggressive by US DSL pricing standards today. During the trials, AOL
will offer eligible members the high-speed, dedicated access to its service for
$49.95 per month, which includes the monthly AOL subscription fee. AOL
subscription includes Internet access as part of the fee. Of the 15 DSL service
providers in California, for instance, there are no sub-$100 Internet access service
options available today. Cable modem Internet access is commonly found at sub
$50 rates, however.
Some subscribers will be subject to a $150 setup fee.
Steve Case, chairman and chief executive officer of America Online Inc. said, "Our
strategy is to foster a competitive broadband marketplace so that our members will
have the benefit of a range of reasonably priced, easy-to-use high-speed
technologies.
"Therefore, we are committed to supporting a variety of broadband technologies, in
partnership with a range of telephone, cable and wireless companies. The xDSL
trials we're announcing today represent an important first step towards making the
promise of broadband a reality for consumers."
The model that AOL is proposing and testing here is not really all that different
from what AOL/GTE do today for dialup analog links and ISDN links under
AOLnet. AOL's DSL service delivery will be composed of three parts: 1) AOL
order coordination on the front-end, 2) GTE InterNetworking Integration and
Coordination in the middle, 3) RBOC/ILEC delivery and turn-up on the back-end.
AOL will shortly be issuing an email message to a select group of subscribers
offering high-speed Internet via DSL on a trial basis. Subscribers choosing to try
the service will be subjected to a qualification process. Upon qualification approval,
the coordination and implementation process will begin for service turn-up.
While the price point is attractive, TeleChoice is still skeptical about the long-term
viability of such low price points for full-time Internet access on a resold DSL
access line. In Pac Bell territory for instance, the nearest DSL service cost is $80
which does not include Internet access. It will be interesting to see how stable that
price point is in the long term, especially as a nationally-priced service with different
underlying cost points for the resold service.
This is not the only DSL play that AOL is undertaking. Recall that in its
announcements with WorldCom, it will also be doing some DSL with them.
Note that CPE selection for the trial will be determined by the end service provider
exclusively. So there will be no special equipment providers selected by AOL for
this trial.
One of the most interesting aspects of the trial will be the systems integration
portion, where GTE will be working with DSL providers across the country - this
is a non-trivial task. ISPs and online providers who want nationwide DSL
availability for their services will either go with this sort of model, which inserts yet
another player who needs to make a profit, or do the coordination on their own,
which means they need to good strategy for how they are going to carry this off
across territories.
AOL members who want to check out xDSL technology can go to Keyword: DSL
on AOL's service for information about where the trials will operate, how to
participate if they reside in field trial areas, and answers to other DSL questions. |
