DSL Headway: Phoenix sets the stage for a high-speed access battle. U S West is banking on splitterless DSL to bring bandwidth to the masses, but Cox is touting its @Home Internet service

Phoenix-known for golf, retirees and speculative land deals-is emerging as the nation's high-speed access marketplace. Early adopters, high-tech corporations and computer-savvy entrepreneurs flock from Southern California to the Valley of the Sun, where U S West and Cox Communications are battling for the high ground in this prototype for future markets.

The stakes are high-the winner will capture a leadership share in a potential nationwide market of 100 million households. Demand for asymmetrical digital subscriber line (ADSL) connections throughout the U.S. is projected to reach 2.5 million by 2002, even though one analyst questions carriers' ability to keep up. The caution is reflected in Dataquest's projection of 448,000 DSL subscriptions by 2001.

"The lack of [DSL] availability is stymieing early-on purchases," says Brett Azuma, chief analyst of Dataquest's telecommunications group.

And so far, cable TV operators are advancing faster with cable modems than telcos are with DSL solutions.

Cox Communications started offering high-speed data service to residential users in the Phoenix area when it partnered with @Home Network last May. It followed its data offering late last year with telephony service in condos and apartment buildings. Cox intends to expand its telephony offering this year.

In late October, U S West launched the industry's first large-scale commercial high bit-rate DSL (HDSL) packages, MegaBit Services, for home, office and business use in Phoenix (Figure 1). It announced three more high-speed offerings in January.

Neither Cox nor U S West will reveal subscriber numbers, but U S West's customers number in the hundreds, and the majority are business users, according to company officials.

Cox says 200,000 Phoenix-area homes are eligible to subscribe to the @Home service, and the company plans to boost that to 500,000 by the end of the year with plant improvements.

U S West officials did say that the company's Phoenix deployment uses Phase I architecture. The HDSL-based technology will transition to Phase II-so-called "splitterless" rate-adaptive ADSL (RADSL)-by the end of the first quarter.

No extra full-time technicians will be required for installation because the RADSL solution will do away with the splitter as a separate piece of equipment, eliminating truck rolls.

"HDSL was our short-term solution to get us to market quickly," says Joe Zell, president of U S West !nterprise Networking. "RADSL will be deployed as part of Phase II in Phoenix, as well as other markets in our region."

U S West intends to deploy DSL in 36 sites throughout its 14-state service area by June if all goes well with regulators (Telephony, Feb. 2, page 6).

The strategy is being followed closely. Telcos are banking on splitterless DSL to make their high-speed services available to the mass market. But they risk defying their own cost-cutting measures in doing so-upgrading and adding equipment in their central offices to deploy the service and answering to end users whose phone lines may give them unexpectedly low throughput and who often demand immediate, hands-on customer service.

Yet telcos must counter cable modem competition or watch the digital world go by.

U S West's initial strategy is to end the World Wide Wait with the Megabit Services, which let the end user stay connected to the Internet or other data networks over a dedicated part of the line while still being able to talk on the phone (Table 1).

An 'A' for automation For technical help 24 hours a day, seven days a week, users can call a toll-free number to reach the carrier's network operations center in Minneapolis-a renovated brewery where computer-equipped cubes line the brick building's long hallways. This is also where the latest boxes undergo lab testing.

Service provisioning across multiple network components had previously required operations workers to build connections by repeatedly accessing supplier-specific management systems for each segment of the end-to-end connection.

The carrier used the Telecommunications Management Network architecture to automate this process. A service level application now interprets the service order and sends a single request to a network provisioning application. This application then establishes the connection across each component by sending configuration commands to the appropriate supplier management systems. The entire process happens in 30 to 40 seconds instead of the previous four hours.

Service representatives and call center employees can enter the service orders via a page on the Web. A similar Web site will go public by mid-year so people and companies can order MegaBit Services on-line, says Greg Gum, executive director of MegaBit Services.

U S West used PairGain's EtherPhone products to deliver the high-speed services during Phase 1. The product line consists of CO and end user devices that run up to 704 kb/s for data and video applications and simultaneously support the voice connection over one copper telephone line. The EtherPhone's voice circuit is encoded into one 64 kb/s time slot, while the other time slots are used to deliver Ethernet data, giving U S West the flexibility to tailor access speeds to customers' needs. In other words, 64 kb/s of the 768 kb/s bandwidth is carved out for digital voice transmission. The voice traffic is converted to analog at the CO, where it is attached to the standard voice switch.

The line transmission equipment is located in about 20 COs, where it connects to Cisco's Catalyst 5500 switch. The traffic is concentrated and ported to the Newbridge ATM 36170 switch. It goes to either an Internet service provider's point of presence or a corporate local area network.

At the residential customer's end, a splitter is required in a network interface device attached to the home. The user attaches his voice line to the network interface device. "In many ways, this is a data-over-voice technology," Zell says.

U S West's core network technicians install the network interface devices and the DSL lines, which takes 45 minutes to an hour. A technician can install a network interface card in the customer's computer for an additional charge. However, U S West is partnering with MicroAge, a computer company, and expects to contract with similar businesses to handle the inside wiring, software installation and other customer needs.

The back office also gets its share of attention.

U S West built systems to screen a local loop's physical characteristics to determine if it is compatible with the HDSL service. "With HDSL, not many people qualify," Zell says. It's limited to about 25% of the market because its reach is 9 to 12 kilofeet, depending on loop characteristics such as bridge taps or loading coils, he says.

The next generation RADSL architecture, with its 18- to 22-kilofoot range, is expected to push the customer qualification level to 65% to 70% and increase the number of residential subscribers for MegaBit Services.

Customers served by digital pair gain systems will remain incompatible with DSL, and that problem will take some time to resolve. "We expect manufacturers to provide solutions by late 1998," Zell says.

Those who qualify for MegaBit Services get a one-bill option that puts their DSL, Internet and local phone charges on a single monthly statement.

Another key customer application being developed for future release is an umbrella management system built on the foundation of a dynamic topology engine, which essentially will give customers greater control over their own networks by letting them change configurations, increase their bandwidth, set quality-of-service parameters, determine appropriate security levels and pay only for what they use.

U S West credits its ability to roll out these services to its six years of data networking experience and the use of its entire infrastructure to achieve the scalability it needs.

"We've provided a secure path from beginning to end by adding security at Layer 2," says Fritz Hendricks, director of architecture, planning and support for U S West !nterprise Networking.

Customers with or without the high-speed service may sign up for U S West.net, the carrier's Internet service. It offers dial-up speeds up to 56 kb/s for those with no access to MegaBit Services.

Early users are mostly ISPs, large businesses providing work-at-home access and small businesses that use the Internet to connect to customers, suppliers and other sites (Figure 2). But retirees and people who want to check their e-mail also are getting connected.

Rodney Owen, a diagnostic radiologist at Scottsdale Healthcare in Scottsdale, Ariz., says the MegaCentral service lets radiologists obtain patients' X-ray images faster, resulting in better patient care in less time. A radiologist can obtain the images on a home PC connected with the hospital's imaging network, which eliminates the need to drive back to the hospital after work. Doctors and patients get faster results, while saving on physician staffing requirements.

Greater bandwidth and faster access are especially important for teleradiology because the amount of imaging data has increased exponentially as computers have become more powerful, Owen says. Computers are an integral part of ultrasound, nuclear medicine and magnetic resonance imaging, for example.

"Even though modem technology has been improving, the rate at which these modalities produce data is far out-stripping it," says Owen, who is spearheading a plan to set up a DSL-based WAN that will link imaging sites outside the hospital with those inside, and with radiologists' homes and doctors' offices. A DSL setup makes the plan feasible because it is less expensive than a dedicated T-1 line, he notes.

The hospital system also plans to get Internet access so the doctors and radiologists can search for literature and access professional societies, journals, the National Library of Medicine and other information sources.

The splitterless dilemma U S West is testing several next generation platforms to comply with the RADSL technology, including one that extends up to 30,000 feet.

The carrier also joined fellow Bell companies in supporting a consortium of computer giants-Microsoft, Intel and Compaq Computer Corp.-to rally around a standard for plug-and-play DSL (Telephony, Jan. 26, page 6).

When U S West issued requests for proposal encompassing DSL modems, a next generation DSL access multiplexer (DSLAM) and end-to-end management, 48 vendors responded.

The solutions differ, but each tries to address concerns that users must sacrifice speed and voice quality for mass-market DSL. Once the splitter is removed, many technical issues arise. The most troublesome are that the ADSL line signals may interfere with POTS service and that the modem must contend with the phone's on-hook, off-hook pulses.

U S West chose NetSpeed to provide the modems, DSLAMs and management, but it is keeping its requests for proposal open for future DSL solutions.

NetSpeed started shipping its RADSL solution in October with a microfilter designed to eliminate the voice interference.

NetSpeed's solution, called EZ-DSL, lets users upgrade their data transmission speeds from 192 kb/s to 7 Mb/s downstream and up to 1.1 Mb/s upstream. The company's SpeedRunner PCI adapter card starts at $199 for consumers.

NetSpeed also lets carriers do modem pooling using its Digital Off-Hook technology. The technology lets service providers over-subscribe the modems, yet the end user never gets a busy signal because the multiplexer detects a transmission and switches it onto a modem within a fraction of a second. "Carriers no longer have to dedicate one modem in the CO to one modem in the house," a company spokeswoman says.

The carrier also can switch service from a faulty modem to an available modem or assign groupsof people who have similar Internet access needs to the same modem pool. Modem pooling also provides flexible tariffing by creating tiered pricing for different grades of DSL service.

Although U S West declines to identify other vendors whose equipment it tests, several have announced a variety of solutions.

Aware Inc. last month demonstrated a splitterless version of its discrete multitone technology, dubbing it DSL Lite (Telephony, Jan. 12, page 8). At the insistence of the heavy-hitting PC manufacturers, DSL Lite can be implemented using PCMCIA cards, rather than external modems, and a slot for those cards is expected to be incorporated into new computers.

Add to the list Northern Telecom and Rockwell Semiconductors, which sealed a deal in November in which Rockwell will make its 1 Mb/s chipsets compatible with the CO component of Nortel's end-to-end solution (Telephony, Nov. 24, 1997, page 7).

Nortel's 1 Mb/s service does not require filters. "When a consumer buys a [DSL] modem, the important thing is that it's deployed in the same way as a regular [modem]," says Stephen Edwards, assistant vice president and general manager for Nortel's Data Access Solutions.

Alcatel has demonstrated a prototype splitterless ADSL service but has yet to announce a product. The company is supporting DSL standardization efforts and is working to ensure that DSL Lite customer premises equipment is interoperable, says Jurgen Lison, ADSL product manager. Alcatel is supplying an ADSL modem, splitter and network interface card for Pacific Bell's small-scale DSL service rollout in Silicon Valley.

Orckit Communications and Fujitsu Network Communications partnered to demonstrate a splitterless version of the Speedport ADSL solution at ComNet '98. It provides ADSL service from 384 kb/s to 1 Mb/s while preserving lifeline telephone service.

Also at ComNet, Paradyne launched HotWire, new features for its HotWire DSL products that will give carriers flexibility for tiered DSL billing.

Diamond Multimedia is taking a different approach by designing a customer interface aimed at making splitterless DSL's installation, operation and troubleshooting as easy as possible for the consumer.

DSL/cable modem war Meanwhile, U S West is looking over its shoulder.

Cox Communications offers its @Home Internet access service in Chandler and Paradise Valley, Ariz., and in portions of Phoenix and Mesa. It plans to upgrade its system to 750 MHz valleywide. Phoenix and eight other cluster markets targeted for high-speed voice, video and data account for 85% of the company's revenues.

The service provider's customers get unprovisioned 1.5 to 4 Mb/s access, depending on the type of Pentium processors driving their computers. Many are upgrading their computers to take advantage of the Internet speeds, says Marty Weiss, director of Cox's residential broadband services in Phoenix.

Cox will spend several hundred million dollars during the next five years improving its data network, overlaid on its hybrid fiber/coax (HFC) network. The HFC plant has been conditioned for a return channel, and Bay Networks/LANCity headend equipment is used to emulate a LAN from the headend to each home. Each local area network segment has a theoretical capacity of 2000 homes in the Phase I architecture.

"There's tremendous growth potential to offer a high-speed, reliable, bandwidth-intensive solution as we complete this upgrade," Weiss says. The system also includes 24-hour network management support and around-the-clock customer service.

Cox leverages @Home's private asynchronous transfer mode network that supports up to 45 Mb/s speeds so users can access content without going through lower- speed ISPs. The content includes multimedia news from CNN, push technology that accesses RealAudio servers and a customized Netscape Web browser.

William Plante, a principal partner of a security consulting firm in Paradise Valley, Ariz., uses the @Home service to find information about workplace violence and prevention programs, and he considers its access speed a competitive advantage.

He estimates that he can find as much information in three hours as he previously spent a day and a half retrieving by regular modem. "As a research tool, there's nothing that compares," he says.

Plante also raves about Cox's customer service, including the technicians that recommended he install 16 extra megabytes in his computer-and then did it for him for a fee-to ensure that his software ran at optimum efficiency. And he values the ability to access his @Home e-mail from a laptop.

U S West claims bragging rights to its own Internet service, which is partnered with CNET and Real Networks for customized streaming video. It features SNAP OnLine, a service that provides tailored content, as well as partnerships with local content providers.

Both U S West and Cox are blanketing residents with slick brochures, packets of information and polite service technicians.

"Today, Phoenix is connected like no other city in the country," says Zell, in what is proving to be a bit of an understatement.

* MegaHome At $40 a month plus a $215 installation fee, this option gives recreational Internet users or occasional work-at-home users 192 kb/s access.

* MegaOffice Telecommuters and smaller businesses with greater bandwidth needs can select this option, which provides access at 320 kb/s for $65 a month plus the $215 installation.

* MegaBusiness Heavier-use business customers and cyber-surfers who need more bandwidth and video capability can get 704 kb/s access at $125 monthly plus installation.

* MegaPak This option combines MegaHome and U S West.net at $59.95 a month. The $25 Internet service hookup fee is waived.

* MegaCentral This option gives businesses the ability to keep employees continuously connected to private high-speed intranets and lets ISPs keep customers linked to the Internet via MegaBit Source: U S West