G.Lite Just a Start for ADSL

Now that the telephone industry has succeeded in creating a
consumer ADSL standard, there's reason to question how much market support there will be
for that standard as telcos intensify expansion of their high-speed-data services.

Some companies, like BellSouth Corp. and Sprint
Communications Co., asserted that they would put the G.Lite
asymmetrical-digital-subscriber-line platform into operation as soon as it becomes
available toward the end of the year. Others -- including Bell Atlantic Corp., GTE Corp.
and U S West -- appeared to be in no rush to jump on the bandwagon.

"G.Lite is a great first step toward the objective of
creating a universally interoperable consumer standard, but there's still a lot of work to
be done," said Scott Bell, director of product marketing for carrier-packet solutions
at Nortel Networks. In the meantime, he said, carriers have access to other options that
can serve them just as well.

"Bell Canada is rolling out ADSL on the [Nortel] 'One
Meg' platform and it is able to charge just $25 in U.S. dollars [per month] for the
service, including Internet access," Bell said. One Meg delivers ADSL at up to 1.5
megabits per second without requiring either a second line in the home or the use of
filters on the line, he noted.

While vendors have demonstrated that their G.Lite systems
can work together at the physical layer, a standard for the provisioning, operations,
administration and maintenance software interfaces that are crucial to practical
interoperability in the marketplace has yet to be developed.

Various manufacturers will incorporate their approaches to
these necessary elements into modems for sale in markets where their gear is being
deployed. But it will do consumers no good to buy G.Lite modems built to other vendors'
specs, making the entire retail distribution picture far murkier than some telcos would

"We'd love to be able to begin deploying G.Lite by the
end of the year, but there are still standards issues to be worked out," said Jeff
Bolton, director of the ADSL program at GTE Network Services. "G.Lite modems that are
compatible with our vendors' DSLAMs [DSL access multiplexers] aren't interoperable with
every other DSLAM provider."

If, as GTE anticipates, the company's DSL suppliers --
Fujitsu Network Systems Inc. and Orckit Communications Ltd. -- can soon deliver product
upgrades that support splitterless service (which doesn't require a second telephone line
in the home) there will be less urgency behind a move to G.Lite, Bolton noted. A primary
selling point of G.Lite is that it is splitterless.

"It remains to be seen what G.Lite modems will
cost," he added. "It doesn't look like there will be a great cost advantage over
the modems we're using now, so, if we can provide a low-cost, full-rate splitterless
service, the consumer probably isn't going to care whether it's G.Lite or not."

Similar thinking can be found at Bell Atlantic, which has
already moved to Alcatel Alsthom's splitterless platform in all of its new-build
territories and is retrofitting previously introduced markets with the gear as well.

"We're interested in G.Lite and have done a lot of
work in helping to develop the standard, but we're moving now to a splitterless platform
that isn't compatible with G.Lite because we don't want to wait," said a source at
Bell Atlantic, speaking on background. "We'll go to G.Lite whenever it makes sense to
do so."

U S West, has also been deploying a splitterless platform
and remains uncertain about the merits of moving to G.Lite in the near term, according to
company officials. And at SBC Communications Inc. an evaluation is underway, but "we
haven't made any commitments," a spokesman said.

But other telcos that use splitterless systems say they'll
jump to G.Lite as soon as it becomes available. "We're absolutely embracing
G.Lite," said Greg Crosby, vice president for high-speed data products at Sprint's
local telecommunications division.

Crosby stressed that wide-scale industry support is needed
to make G.Lite a mass-market success. "Turning this into a mass-market product means
you have to generate demand to get to the right price points," he said, noting that
the goal should be to achieve a retail distribution model akin to the consumer-friendly
approach used in cellular and PCS.

"We're trying to get there as fast as we can,"
Crosby added. "We have a distribution agreement with RadioShack in Charlottesville
and Las Vegas, where people can come in and test drive the service before they purchase
the modems."

BellSouth, with plans to go to G.Lite as soon as the
equipment comes on the market this fall, hasn't even bothered with moving to a non-G.Lite
splitterless platform, noted John Goldman, a company spokesman. "We'll download
software to the switch and, voila, we'll have G.Lite," he said. "There's no
sense spending money on something else."

While the disparities in telco agendas could affect the
G.Lite cost curve, Goldman and other telco executives note that carriers will have a large
enough distribution base to ensure there are enough modems compatible with their vendors'
G.Lite implementations. That's because telcos, unlike cable companies, typically serve
entire states.

Even where G.Lite is not in use, there is broad
compatibility at the physical layer among telcos' DSLAMs. This is because are now using
the standardized modulation system known as DMT (discrete multitone), which is also used
in G.Lite. DMT makes it possible for major system vendors like Nortel to supply versatile
aggregation systems for deployment at the edges of networks, so that carriers can tightly
integrate their DSLAMs with their switches and backbone transport components.

Nortel's "Universal Edge" module, which can be
positioned on the company's DMS switch shelf, can be used as a DSLAM that supports not
only any DMT-based ADSL system but other types of systems as well, including G.Lite, SDSL
(symmetric DSL) and One Meg, Bell noted. "Standardization has opened a path to much
more efficient, integrated approaches to introducing ADSL, which lowers costs and gives
carriers the options to offer multiple service types within a given market area,"
Bell said.

This means there's no reason to anticipate that
uncertainties about G.Lite will slow the accelerating pace of DSL deployments in the
telephone industry, he added.