Bypassing the bottleneck

An alliance struck last week between Digital Island/Sandpiper and Rhythms NetConnections is just one step toward where the companies see themselves in the future. Under terms of the deal, Digital Island/Sandpiper, the network service provider, will gain the capability to deliver DSL via Rhythms' broadband access solutions. Rhythms, the DSL provider, will gain the ability to offer its customers e-business delivery solutions.

In addition to giving its customers DSL access, Digital Island/Sandpiper will co-locate its content distributors at facilities provided by Rhythms. Both companies have recently focused on offering differentiated services to consumers and business users, making sure they get the best experience.

"Since day one, we knew DSL would evolve to placing multiple services over a single line," said Michael Calabrese, vice president of product management for Rhythms. "The thing to do is to locate the content as close to users as possible."

Teaming with Digital Island/Sandpiper is another chapter in Rhythms' strategy to provide multiple services over a high-speed architecture. The company is positioned to make more alliances similar to this one, projected to take place in the first quarter of 2000.

For now, though, Rhythms is focusing on the benefits of this latest alliance.

"Rhythms is one competitive local exchange carrier that is on fire in terms of DSL functionality," said Mark Wagnon, director of network services at Digital Island/Sandpiper. Following the FCC's recent line-sharing agreement and just in time for online holiday shopping, Rhythms entered the consumer market. Now that the FCC has decided consumers can receive DSL services over the same telephone line that carries voice, DSL is hotter than ever. The company offers its consumer service through DSLnetworks, Flashcom, Phoenix Networks and Telocity. It expects to announce more ISP partnerships soon.

With Rhythms, Digital Island/Sandpiper can offer customers the speed of DSL to conduct business via the Internet. "If business is being done on the Internet, people do not want congestion," Wagnon said.

The alliance further enables the company to offer its customers service guarantees regarding congestion and speed of content delivery. If Digital Island/Sandpiper can tell its customers that each transaction experiences less than 1% packet loss, then customers are more likely to stick with the service, Wagnon said.

"When there is a two-way network with a service level agreement to conduct commerce, then we will accelerate commerce," he said. "We have taken the performance bottleneck out of two-way Internet service and put in state-of-the-art security in order to conduct commerce."

About a week before its Rhythms announcement, Digital Island/Sandpiper joined Sun Microsystems and Inktomi to accelerate Web performance for consumers and e-business Web sites.

About 5000 Sun servers equipped with Inktomi's traffic and content delivery suite will be deployed at the outer edges of the Internet. Digital Island expects to invest up to $150 million to extend the reach and expand the capacity of its existing e-Business Content Delivery Network, which currently consists of regionally located data centers, more than 1200 Sun and Inktomi-based content distribution sites and an intelligent network spanning 21 countries.

To get a jump on interactive commerce, the company plans to work with other last-mile providers, such as Rhythms or others - wireless or not. It anticipates announcing alliances with three "big customers" soon, Wagnon said.