On Your Mark, Get Set, Go: GTE charges ahead with largest-ever DSL deployment

Less than two weeks after GTE's restructuring plans prompted analysts to say the local and long-distance carrier was moving toward being a "national data utility," the company announced the largest-ever deployment of asymmetrical digital subscriber line service.

Starting in June, GTE Network Services, the incumbent local exchange carrier unit of GTE, will provide ADSL access in about 300 central offices in portions of 16 states, beginning at the sites of previous DSL trials. In a press conference last Monday, GTE announced it would use DSL modems and CO equipment provided by Fujitsu Network Communications and its marketing partner, Orckit Communications Ltd.

The deployment is a significant step in GTE's plans to become a leader in data networking, said John Appel, president of GTE Network Services. As a result of customer feedback from trials with more than 1300 users, the company is offering several DSL packages with speeds ranging from 256 kb/s to 1.5 Mb/s. "We're offering different speeds because of the different needs of our large customers," Appel said.

Although GTE has not announced any partnerships with Internet service providers, "discussions are well under way," and it is likely that several ISPs could be linked to the same CO equipment, a company spokesman said. "We're seeking to broaden our range of services to a large umbrella of Internet subscribers," he said.

Many analysts applauded the move-for both the company and the industry. "This is definitely the most significant DSL deployment to date," said TeleChoice analyst John Hunter. "And it's a big win for Orckit and Fujitsu."

GTE's choice of Fujitsu's Speedport DSL access multiplexer was somewhat of a surprise to the equipment vendor, which hadn't participated in any market trials, a Fujitsu spokesman said. But the company is pleased with the decision, which he said was probably based on its product's flexibility. Orckit, a marketing partner with Fujitsu for the last year, provides the chip technology for Speedport.

The Fujitsu equipment had been tested in the laboratory and in field trials, a GTE spokesman said.

Competitors for the deal included Westell, which provides DSL equipment for GTE's competitive LEC business. "We're disappointed but not discouraged," said Westell Vice President of Marketing Mark Meudt. "We know our relationship with GTE is strong as ever."

This ADSL initiative is one of several recent moves by GTE to try to become a major national "data utility," said Clif Holliday, an analyst with B&C Consulting and former GTE executive. "Their big investment in this technology will go a long way toward driving [ADSL] as a national standard that would...encourage other telcos to use that standard for data access," he said.

Hunter agreed that GTE's move could prompt other large carriers to deploy DSL and said that the service is "priced very aggressively." The only problems are potential customer confusion with the various packages offered and GTE's rural service areas, he said.

In June, GTE will expand its DSL trials to deployment in parts of Beaverton, Ore., Durham, N.C., West Lafayette, Ind., and Redmond and Kirkland, Wash. During the second half of the year, GTE plans to deploy DSL to market clusters in California, Florida, Hawaii, Illinois, Indiana, Kentucky, Michigan, Missouri, North Carolina, Ohio, Oregon, Pennsylvania, Texas, Virginia, Washington and Wisconsin.

With month-to-month, multiyear term and volume discount plans, service prices will range from $30 to $250 a month. This excludes installation fees, which are expected to range from $60 to $140, and modem lease fees, which should run about $12 a month.

The deployment doesn't reflect GTE's plans to research other DSL flavors and applications, including previously reported plans to test the technology for video, a GTE spokesman said.