A Blatantly Optimistic Outlook on DSL

DSL is like that commercial you see on TV about the little kid drinking milk: "someday, I'll be bigger than you, and then..." Guess what? The kid's growing up.

by Jim Wagner of internetnews.com [September 3, 2002]

Two years ago, cable was the god of broadband connectivity in the U.S. Millions tithed to the church of Excite@Home and its high priests were AT&T Broadband, Cox Communications, Comcast, and a host of big-name cable networks.

Digital subscriber line (DSL) service seemed in shambles: competitive heathens at NorthPoint Communications and Covad Communications were going through a slow and painful death, while the Baby Bells stalled at providing good customer support, stalled at deploying DSL access multiplexers (DSLAMs), and stalled provisioning to the aforementioned heathens.

It seemed inevitable. Despite 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.

It's like those commercials you saw in the past, with the kid saying he was small right now, but he's drinking milk now, "and someday, I'll be bigger than you." It looks like he's getting a little taller already.

While there's no getting around the 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, Bells like Verizon are making improvements on previously woeful service, and equipment makers are improving ease of use, deployment, and compatibility.

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. The report, "Broadband Users: Cable vs. DSL," showed that 60 percent of users who had a choice were giving DSL the nod, mostly 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 profits in the DSL gravy train, after years spent fighting the Bells for provisioning and competing with the popularity of the closed cable Internet networks.

Vern Burke, president of Maine-based ISP Skowhegan OnLine, has been seeing a 100 percent growth rate for the past few 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 the high-powered telecom lawyers found at national DSL providers 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, rectifying 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 force manufacturers to participate in its interoperability testing laboratory program. Its members include most of the major incumbent carriers around the world and a host of equipment makers.

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 innovation in the consumer electronics industry."

DSL success stories and modem manufacturers playing nice are a great pair of new items. But there's even more good news on the horizon.

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 (CO) or remote terminal. (Note: current ADSL distances rarely exceeded 10,000 to 12,000 feet when the technology was first released, but currently extend as far as 20,000 feet.)

The new technology has many benefits:

• Compatible in both ADSL and ADSL2 modes
• Better 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" which adds 256 Kbps of upload speed

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's 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. Watch out, because he's drinking milk, and some day...

— End