Industry trendsetting: U S West launches first commercial DSL service

U S West jolted the industry twice last week-first by splitting its telco and cable TV concerns, then by commercially launching digital subscriber line as the high-speed Internet access pipe to Phoenix businesses and consumers.

The announcements represent a historic end and beginning-the end of the cable/telephony convergence ideal and the origins of a packet-based technology that is gaining steam on telcos' traditional circuit-switched architectures.

The first phase of the DSL rollout involves high bit-rate DSL and offers options for residences, small businesses and large businesses, as well as high-speed DSL with U S West's new Internet service called U S West.net (see figure).

The MegaBit Services are unique because they let users stay connected to the Internet or other data networks over a dedicated portion of the phone line, with no dial-up required. When end users open their Internet browser software, they can make or receive phone calls over the same line while simultaneously surfing the Internet.

"With this full service offering, we've made it an easy one-stop shop for our customers," said Greg Gum, executive director of solutions development for the MegaBit Services. Customers are offered a single monthly statement that includes their DSL, Internet and local phone charges.

U S West plans to use its multiservice platform to eventually offer video services via very high bit-rate DSL. To hook up the end user for Internet access, workers with the fully managed MegaBit Services install a DSL connection box, convert the user's computer dataport and provide instructions.

U S West is using PairGain's EtherPhone products at the customer premises to deliver DSL over phone lines. Those products are matched at the central office and connected to Cisco's Catalyst 5500. The traffic is then concentrated and ported to the Newbridge ATM 36170 switch. Ultimately it goes to either an Internet service provider's point of presence or to a corporate local area network.

U S West is aiming to provide DSL to 600,000 to 700,000 access lines throughout the Phoenix metro area. So far, about 60% of the copper loops can handle the MegaBit Services. Clearing the rest will entail removing load coils, qualifying the end user for service within an 18 kilofoot range and ensuring that a digital loop carrier is not serving the user.

Central to the strategy is U S West.net, which offers Internet features and dial-up speeds up to 56 kb/s. Users who have no access to the MegaBit Services may sign up for this alternative, and U S West plans to migrate them to the MegaBit Services as a DLC solution is implemented.

U S West aims to roll out the MegaBit Services and U S West.net in other cities in its 14-state territory within months and has already set up tariffs in Utah.

Analysts praised the DSL rollout as a milestone in the marketplace. Key areas to watch will be how DSL plays against cable modems, its take rates and how prepared U S West is to face the challenge, said Beth Gage, senior broadband consultant for TeleChoice. "Hopefully, this will spur some of the other big players to step up to the plate," she said.

U S West is addressing the need to avoid the "Swiss cheese" deployment of ISDN by using its Internet service as backup to DSL, said Brett Azuma, director and principal analyst for Dataquest, San Jose.

U S West's MegaBit Services offer these DSL options:

* MegaHome 192 kb/s access at $40 a month plus installation

* MegaOffice 320 kb/s access at $65 a month plus installation

* MegaBusiness 704 kb/s access at $125 a month plus installation

* MegaPak High-speed DSL with unlimited Internet service at $59.95 a month and a discounted installation fee