Getting the home up to speed

What's so tough about DSL? Just plug in the modem, condition the line and you're there.

At least that's what Telocity - with its newly launched ISP - hopes will be the experience for customers buying the high-speed access over copper. What will make installation easy, company officials said, is a proprietary system that will allow customers to qualify their own phone lines and configure their own computers for DSL service.

The automated self-setup is important because the Telocity ISP plans to sell its DSL exclusively to residential customers - users who usually require a truck roll and significant help desk support to install the necessary modem equipment.

The residential focus means keeping it simple to keep the customer happy. "Lots of the commercial DSL guys say, `We're not worried about collateral damage; there's so many customers out there that for every one we lose, we'll get two,'" said Dean Tucker, vice president of sales for Telocity. "But our CEO Patti Manuel-Hart was the former president of Sprint long-distance, and anybody who's been in the residential subscriber business knows one thing: Churn will kill you."

When Telocity began in California a year ago, it intended to wholesale DSL to incumbent phone companies. But in a Chicago trial last summer, it partnered with competitive local exchange carriers (CLECs) to avert the expense of building its own national network.

"Our board and our investors told us we have to own the customer relationship; we've got to be the ISP," Tucker said. The company raised $20 million in two venture capital rounds.The result is Telocity's launch as an IS P late last September, providing consumer asymmetrical DSL (ADSL) in 30 cities in BellSouth's territory - primarily Atlanta and Miami, with capacity coming up in Orlando, Nashville, and New Orleans. The company will start with a regional model in nine states and a potential market of up to 4.5 million households.

A key component of Telocity's solution is its self-installable residential gateway, an intelligent appliance mailed to the customer's home that combines an ADSL modem and a microprocessor unit with parallel, universal serial bus and Ethernet connections to a computer.

"If you can plug in a printer, you can install our modem," Tucker said. "You download all your installation through a dynamic host configuration protocol server request from our [operations support system]."

That OSS integrates an automated broadband service platform, which incorporates billing, self-provisioning, customer self-care and customized services. Over time, the platform will allow Telocity to offer value-added services such as security, filtering, home networking and eventually voice and unified messaging. Telocity doesn't own fiber, but it owns routers in all 14 IP co-location spaces that it leases, so the carrier can use DiffServ to guarantee latency and throughput in its Web- and media-cached network.

The carrier's price points seem competitive: a free modem, a $99 activation fee and $49.95 per month for up to 1.5 Mb/s downstream and 256 kb/s upstream, three e-mail accounts, a static IP address and an 800 access number for roaming with the first hour of each month free.

"They've got their product in order for the end user," said William Benyo, senior analyst with Tel-Data. "The biggest immediate concern will be expanding into markets. Will they be able to partner up with enough phone companies, particularly the RBOCs, to become a national ISP fast?"

Tucker said they will. "We should look national by second quarter 2000," he said. Telocity employs two gateway platforms to ease its automatic provisioning with incumbents and CLECs. And cooperation from incumbents - once slow because of their own DSL efforts - now is coming faster. "I think [BellSouth] sees us as an ally," Tucker said. "They recognize that it's better to have us as a friendly competitor than to have to compete with AT&T's cable telephony platform."