A Blatantly Optimistic Outlook on DSL

Only a short while ago, cable seemed to the the clear front runner for home and small-office broadband connectivity in the U.S.
Digital subscriber line (DSL) service seemed in shambles: the leaders in deployment were struggling for survival. The Baby Bells stalled at providing good
customer support, stalled at deploying DSL access multiplexers (DSLAMs),
and stalled provisioning to competitive local exchange carriers.

It seemed inevitable. Despite being what experts call a better technology, DSL seemed hell-bent on
implosion.

What a difference a couple years can make. The efforts by
many in the DSL industry to right past wrongs are creating a DSL nirvana
for the players left standing.

While there’s no getting around the problems, problems
,
problems,
in the telecom carrier world these days, there’s reason for optimism.

Covad’s out of bankruptcy court and ISPs are signing up customers left and
right, Bell’s like Verizon are making
inroads against its woeful service reputation and equipment makers are
getting closer to a universal standard (or at least compatibility) in
modems.

A brief ray of DSL hope shone on the industry last November, when the Strategis Group published
a report
showing DSL numbers were rising while the number of cable
subscribers was lagging. Its report, “Broadband Users: Cable vs. DSL,”
further
showed
60 percent of users who had a choice were giving DSL the nod,
namely due to superior marketing.

Then, in July, the Federal Communications
Commission
(FCC) issued its biannual broadband review; its numbers also
pointed to a shift in DSL
fortunes
. Cable growth in the first half of 2002 dropped from 45 to 36
percent, while DSL shot up from 36 to 47 percent.

Some ISPs in the U.S. are finally seeing the DSL gravy train, after years
spent fighting the Bells for provisioning and overcoming the popularity of
cable Internet access.

Vern Burke, president of Maine-based ISP Skowhegan OnLine, has been seeing a 100
percent growth rate for the past couple years and expects the same for this
year. While 250 lines might seem a trifle to the jaded industry analyst,
consider that Burke is a local outfit in a relatively rural state,
without the benefit of high-powered telecom lawyers found at national DSL
providers (many of which are no longer here) to fight the Bell
bureaucracy.

The nationwide digital upgrade the cable networks underwent is part of the
reason he’s so successful, Burke said. That upgrade made formerly
convenient cable Internet prices a thing of the past for existing customers.

“We’re substantially cheaper and more consistent than the local cable
modem,” he said. “I’ve been putting in so many DSL lines I’ve actually got
a backlog now because of the high demand. The cable companies bankrupt
themselves replacing their old coax plants with fiber to reliably carry
Internet.”

“Adelphia anyone?,” he joked.

Further spurring growth will be the eventual interoperability of all DSL
modems on the market, an oversight that’s cost the industry dearly in the
years since the first modems started popping up around the country.

The DSL Forum‘s interoperability
test plan has one end goal: making DSL modems available on the retail
scene. As it stands now, moving from one provider to the next often
requires the purchase, or rent, or lease, of a new modem.

The organization has the industry clout to get away with having
manufactures certified on its interoperability testing laboratory program;
members include most of the major incumbent carriers around the world and a
host of equipment makers themselves.

Bill Rodey, DSL Forum president, said the promise of interoperability makes
it a win-win situation for everyone involved.

“(Interoperability) would spur DSL growth the same way retail models
spurred the growth of other products, like PCs and fax machines,” he
said. “When retail models come out, equipment makers can make customized
products like LANs, video games, and videoconferencing. It would unleash
the consumer electronics industry to start innovate and combine
applications that access the Internet.”

DSL success stories and modem manufacturers playing nice is great timing
for the industry, given the boost new technology will bring to the consumer
PC and more, if DSL modems truly go retail.

The International Telecommunications
Union
(ITU) is expected to ratify the second generation of asymmetric
DSL standards early next year. Called by a bevy of names — ADSL2, ADSL2+,
ADSL+, FastADSL — the standard effectively doubles the maximum standard
downstream rates to more than 20 Mbps. The drawback, though, is the
distance is limited to 8,000 feet from the central office or remote
terminal (current ADSL distances rarely exceeded 10,000-12,000 feet
when it first came out).

The new technology has many benefits:

  • Compatible in both the ADSL and ADSL2 modes.
  • More interoperability.
  • Better performance with long loops and interference.
  • Boot up time reduced from 10 seconds to three seconds.
  • Power management gains to alleviate remote terminal power usage
    worries.
  • Ability to go “all digital,” adding 256 Kbps of upload speed.

There are currently seven million DSL customers in the world. Industry
organizations like the DSL Forum expect that number to surge in coming
years, as the splintered DSL community slowly mends itself.

So far, there are roughly seven million DSL users in the U.S. The DSL
Forum expects the U.S. to figure more prominently in coming years in order
for DSL to meet the organization goal of 200 million users in 2005.

“The time is right for businesses and governments to work together to build
impetus for the global decentralization of the workforce,” Rodey
said. “That would quickly end the (current) telecom recession.”

The end result is unclear. Congress and federal regulators are still
looking for a band-aid to patch up the cuts and scrapes the industry has
inflicted upon itself, and there are still self-serving interests within
the community looking for the best result to their bottom line.

But like any kid, the industry will heal. And watch out, because he’s
drinking milk, and someday…

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