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Technology Stocks : LAST MILE TECHNOLOGIES - Let's Discuss Them Here -- Ignore unavailable to you. Want to Upgrade?

To: JMD who wrote (3156)	3/17/1999 6:24:00 PM
From: Kenneth E. Phillipps	Read Replies (1) \| Respond to of 12823

RBOCs might set low rates for DSL to keep CLECs from moving in! nwfusion.com AOL, DSL and the telcos By FRED MCCLIMANS Network World, 03/15/99 First, let's stipulate that AOL is the 800-pound gorilla of consumer Internet access. But it's time to stop making fun of AOL. What started as a way for Commodore-64 users to chat (anybody remember its first incarnation as Qlink?) will soon revolutionize high-speed remote access, by turning DSL into a true mass-market technology. AOL recently signed deals with SBC and Bell Atlantic to provide bundled AOL and DSL services. Now stop that smirking! Both telcos have been promising (or at least hinting about) DSL service for sometime. Both look unable to deliver widespread service until late 1999 (and that assumes nothing goes wrong). Yet they are frantically trying to figure out how to keep the cable companies - who are beginning to pick up momentum with their competing cable-modem services - from steamrolling them and becoming THE Internet access companies. That last point is where AOL comes in. High-speed Internet over cable appeals primarily to home user (think shared coax here - would you want your business data traveling over the same "party line" as all those teen Instant Messengers?), who gets not only fast downloads, but a Web-page portal to the Internet. In other words - why pay for AOL (or use NetCenter for that matter?), when the friendly cablecompany already provides a way to get around the'Net? For all of its success in getting its users onto the Internet, AOL's basic strategy remains trying to keep them "home" by constantly increasing the amount of services (and now ads) on its proprietary network. Add on all those whiz-bang new Internet thingees streaming video, for example) and AOL has a problem: bandwidth. Enter DSL. Deals between AOL and telcos mean AOL gets to offer its users faster downloads, while the telcos get an established club with which to beat off the cable companies. If it all works. Joe Six-pack is going to be a lot less accommodating with the lengthy installation delays and glitches than the bleeding-edgers who now make up the bulk of DSL home users. And despite what the DSL vendors say, there is an awful lot of last-mile copper out there that is in no shape to support high-speed data. Finally, there's price: Will consumers be willing to pay a lot more for DSL termination equipment than for 56K modems, or will they realize they can make this up over time by foregoing the second phone line many are considering? Still, with the marketing muscle of AOL, we could see DSL demand go way up, which means prices for gear - and installation and performance problems - could come way down. Look for this to begin happening as early as next year. In the meantime, however, get used to increased 'Net congestion. Some ISPs are already slowing down the rollout of new services to try to meet the demand for existing dial-up service. And as fast as access speeds increase, so, too, will the size of applications and graphics on the Web. Finally, look for the RBOCs to set fairly low monthly rates - which will further spur demand and congestion - to keep all those pesky CLECs from moving into their game.