ADSL hits home

The ADSL Forum met to discuss the state of the industry and the message was clear: Asymmetrical digital subscriber line technology is here and consumers are ready for it, but awareness, payment options and regulatory issues are standing in the way of full-scale deployment.

According to Hans-Erhard Reiter, ADSL Forum chairman and president, 80% of U.S. Internet consumers are willing to pay for high-speed access. And according to TeleChoice, 39,000 DSL lines were in service in the U.S. at the end of 1998. Based on service provider projections, TeleChoice predicts that number will grow to more than 2 million by 2002 (see figure).

Despite battering from the cable industry, ADSL is doing pretty well. "Progress has been rapid, especially in the last two years," said John Freeman, an analyst with Current Analysis. Three ADSL chipsets are on the market, a wide variety of products are becoming available and an increasing number of companies are announcing interoperability agreements.

But home wiring remains an issue, particularly for splitterless ADSL. Home phones "are not designed for interference," Freeman said.

However, requiring customers to install filters to reduce interference won't hurt DSL deployment because today's consumers are technically aware, he said, adding, "We don't have to go back to the splitters. If you can install a modem, you can stick a filter in." The perceived truck roll problem is one that service providers must overcome.

Adoption rates are "higher than originally predicted," Freeman said. He predicted ISDN will be used for niche services and ADSL will compete well against T-1 (1.54 Mb/s) based services. Eventually customers will buy ADSL in the same fashion they buy cell phones: purchase the service and get the modem at the same time. That retail model could propel DSL acceptance but would force customers to pay for usage.

Reiter has a more radical suggestion. He likens the Internet to a supermarket and proposes that vendors or suppliers of Internet goods pay for placement in the manner that food suppliers pay for shelf space in a grocery store.

"Do you pay an entrance fee to go to the supermarket?" he asked. "No. Suppliers pay. So why should we pay an entrance fee to shop on the Internet?"

Of course, offering service is the final step in the game. To get to that point, competitive carriers have to cut through a mess of red tape. Spurred by regulators, incumbent local exchange carriers must offer reconditioned local loops, but competitive carriers complain they do so unwillingly and none too fast.

Legislators must determine when to force regulation and when to open the market. Rep. Rick Boucher, D-Va., pointed out that cable operators and telecom carriers can both offer high-speed service, but only carriers fall under the restrictions outlined in the Telecom Act of 1996.

"Two entirely different sets of rules currently govern the provisioning of the same product by two different industries," Boucher said. He suggested that Congress and the FCC regulate services, not particular industries.

The ADSL Forum is addressing these issues and working toward getting DSL out among customers before other technologies beat it to the punch. As Bill Rodey, vice chairman and treasurer of the ADSL Forum, said, "People will not wait for a service they don't know exists."

TEAMING UP FOR IP Ericsson increased its equity investment in Juniper Networks and will distribute Juniper's M40 backbone router as the AXI 520. In addition, the two companies are jointly exploring voice and IP convergence opportunities.

DSL ROLLS Savvis Communications, a national ISP, and carrier NorthPoint Communications have teamed up to roll out DSL service in 12 U.S. markets. San Francisco and New York will receive the service in April. Throughout the rest of the year, Savvis will turn up service in Atlanta; Austin, Texas; Cleveland; Dallas; Detroit; Houston; Philadelphia; Pittsburgh; and St. Louis.