Money talks Bandwidth solutions for the masses pose costly dilemma >BY RENEE SAUNDERS, Special to Telephony

Money, not technology, is barring the residential mass market from broadband Internet access, telecommunications and computer industry representatives recently told a forum on Internet bandwidth.

Yet the explosion of residential Internet users that is clogging the public network will only get worse until an alternative is in place, the experts said during the Washington event, sponsored by the Federal Communications Commission.

No single technology will serve all broadband Internet access needs, agreed representatives from wireless and cable operators, local exchange carriers and Internet service providers.

Interim solutions, though valid, often are too costly for residential users, and truly high-speed networks will be even more expensive. On the other hand, neither a killer application nor a convincing user benchmark has emerged to motivate carriers to sink the necessary money into network upgrades.

ISDN is one example. In many cases, the cost of these digital lines is arbitrary and prohibitive, said James Love, director of the Consumer Project on Technology, a Washington consumer advocacy group. Prices vary from market to market, with the lowest about $15 a month, and the average $20 to $40 a month. Yet the cost to provide ISDN service is not much more than POTS, Love said (see table).

Although ISDN will serve near-term requirements, future applications demand data speeds of megabits, not kilobits, and that's where advanced digital networks must come into play, said Stagg Newman, a veteran researcher with Bellcore.

Why the delay in realizing these networks? Unrealistic expectations caused by hype and the inevitable backlash, the speakers agreed.

Cable modems are a reality in places such as California, Ohio and Arizona, said David Reed, vice president of strategic assessment for CableLabs, Boulder, Colo. But he could not estimate when a significant number of people would be able to use similar services.

The delay results from prudent business practices as well as some technical uncertainties, said Pat White, Bell Atlantic's vice president for research and development. Although lab technology trials have proved successful, deploying asymmetrical digital subscriber line or other new digital systems in the field will be more challenging.

The Telecommunications Reform Act of 1996 also has caused uncertainty, he said. "The extent to which we have to price our new technology below cost and make it available to people who are not taking an investment risk that we're taking leads to some caution," he said.

"We know how to solve a lot of these problems-the cable industry, the phone industry, wireless companies and others. But the real question in my mind is, who is going to pay for it?" White said.

Les Vadasz, senior vice president with computer chip maker Intel, was more pessimistic. "In real business, in real competitive markets, you have a right to compete and to earn a return. You have to put capital at risk.

The same carriers that are reluctant to invest capital in the viable economic opportunity that PC users represent "spend orders of magnitude more effort in trying to get into each other's businesses rather than trying to develop new business," he said.

White countered that Bell Atlantic spends approximately $2 billion a year on new construction and network maintenance. "I would hardly say that is compatible with not investing in the network," he said.

A combination of cable, telco and computer business approaches will be the key, said Bellcore's Newman. "Basically, the cable industry has figured out the right price structure," he said. "The telephone industry has figured out the quality of service, and the computer industry has figured out the performance. How do we put them together and still make money?"