Cable/DSL Battle Rages On
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Who says there's no high-speed Internet war?
Since companies started offering digital subscriber line and cable high-speed Internet services in the mid-1990s, analysts have predicted that DSL would wind up the broadband platform of choice.
DSL has been heavily-favored for obvious reasons: its technology uses individual telephone lines to transmit data at blistering speeds, while cable is a shared-resource technology, with speeds dependent on the amount of users sharing a neighborhood gateway.
However, an industry-wide malaise in digital subscriber line rollouts and service has been a source of bad news for telecommunications companies but good news for cable network owners lately, and results of a recent study that find cable modem sales outpace DSL in the third quarter of 2000.
A report by Cahner's In-Stat found a slump in Asynchonous DSL modems sales in the third quarter the result of poor deployment in the telecommunications industries. But, the report predicts, the shortfall is just a short-term problem that will see ADSL the high-speed Internet platform of choice for residential users down the road.
ADSL is used almost exclusively by residential users since it delivers high downloads speeds but slower upload speeds for a lower price than Synchonous DSL, which is used by businesses that rely on consistent upload and download speeds.
In the third quarter, roughly 1.85 million ADSL modems were shipped out, a 35 percent growth over the second quarter but nothing like the 46 percent increase seen in previous quarters.
Mike Lowe, Cahner's advanced carriers service senior analyst, said the third quarter slump was not indicative of the demise in DSL service.
"Overall subscriber growth in DSL grew at a slower rate in Q3 2000," Lowe said. "The slowdown in subscriber growth can be attributed to one-time events like the Verizon strike, and, despite this, the market still grew, but at a slower rate. We are confident that it will bounce back."
But the one-time events have been adding up, as telecommunications officials have discovered to their dismay. Many have been unable to keep up with the demand for broadband connections, due mainly to an infrastructure still in its infancy.
As it stands right now, the data local exchange carrier (DLEC) gets the DSL order from an Internet service provider (ISP), and then places the order to the incumbent local exchange carrier (ILEC).
An installation time is set up for the ILEC to send out a technician to the customer's house. The ILEC sends an e-mail to the DLEC with the time, who then gives it to the ISP. If the customer can't make the appointment, they contact the ISP who then contacts the DLEC who then contacts the ILEC. Repeat steps one through four.
Tuesday, four broadband ISPs filed for bankruptcy after failing to meet its financial obligations. This, in turn, led Covad to revise its 2001 earnings expectations and business plan.
To make up for its losses, Covad plans to focus its provisioning attention on its money-making business services using SDSL, at the expense of residential customers and their ADSL modems.
But telecommunications officials insist the infrastructure will right itself, leading to resurgence in DSL. After all, they maintain, DSL has only been around a couple of years.
Larry Plumb, Verizon Communications spokesperson, said improvements are being made industry-wide that should, for the most part, fix many of the problems plaguing the networks.
"These things will be worked out, because they have to," Plumb said. "The real competitors aren't the DLECs or the ILECs or the ISPs, the real competition is the cable operators. They have the integrated services that make it easy to deploy; we don't.
"We're in the first cut in the process to alleviate the ordering process," Plumb continued, "called 'papering.' Every time we come out to the customer's house, we file a form