The pace of telco DSL rollouts has escalated on schedule
heading into the fall season, including the first commercial deployment by BellSouth Corp.
last week and a major expansion throughout California by Pacific Bell.
At the same time, the use of digital-subscriber-line
technology by CLECs (competitive local-exchange carriers) and ISPs (Internet-service
providers) is rapidly picking up strength, moving well ahead of the local telcos'
schedules in some areas like Chicago and Boston.
But while all of the major carriers -- with the exception
of Bell Atlantic Corp., which said launches are imminent -- have services under way,
consumers who live in most of the targeted regions outside of California are largely in
the dark about their availability. That's mainly because telcos are continuing to
work with ISPs to finalize agreements and make preparations for handling what is expected
to be strong demand for installation.
PacBell -- with a head start that began with commercial
offerings in the San Francisco Bay area last November -- is now prominently marketing ADSL
in 180 communities, the company said.
U S West, too, is directly marketing service, although with
a lower profile than PacBell so far.
But few telcos or ISPs have begun to promote the service
"We just launched last week in New Orleans, so while
we're equipped to provide service at most of the central offices there, it's
going to take a while for the ISPs, which will market the service directly to the public,
to gear up to accommodate demand," BellSouth spokesman John Goldman said.
So far, the carrier's only ISP contractor for the
service is BellSouth.Net, but the company is "on the verge" of signing a number
of ISPs for this and other markets, Goldman added.
BellSouth will launch services in Atlanta and Birmingham,
Ala., this week, and it will add four more markets before the year is out, Goldman said.
The company sells its adaptive-rate, 1.5-megabit-per-second maximum-speed service at a
wholesale rate of $45 per month to ISPs, with discounts for volume purchases.
BellSouth.Net is charging its customers $59.95, with a $10
discount for those who take BellSouth's voice-service features.
GTE Corp., which has been offering services in a few
markets for several months, has now equipped more than 100 of the 300 central offices in
the 16 states that it targeted for ADSL by year's end, said Jeff Bolton, director of
the carrier's ADSL program.
"The product is meeting our expectations, and
we're getting tons of equipment from our supplier, Fujitsu [Network Systems
Corp.]," Bolton added.
But ISP sign-ups are progressing slowly, largely because it
takes time for ISPs to prepare their facilities to handle the added traffic and to set up
their marketing programs, Bolton said, adding that his company's GTE Internetworking
unit has begun signing up some customers and taking orders in the Dallas area.
GTE said it was too soon to assess customer response, but
early reports backed up the telco's projections on the percentage of lines that would
support delivery of services. For example, a North Carolina branch showed 30 percent of
its lines as nonqualifying.
That's "pretty close to our expectations that
we'd be able to qualify 65 percent, on average, across all of our markets,"
GTE expects to extend service by early next year, following
Fujitsu's expected delivery of DSL-access multiplexers (DSLAMs) for installation in
the remote terminals served by digital-loop carriers (DLCs). DLAMs extend the reach of
central-office switches beyond their local-loop bases.
Bolton said this will happen "where we see enough
customer activity to justify the cost of installing DSLAMs in DLC terminals."
GTE Internetworking is offering DSL at several price
points, in keeping with the wholesale rate structure set by its parent. The lowest-cost
service, operating at 256 kilobits per second downstream and 64 kbps in the return, costs
$60 per month, $35 of which represents the tariffed cost of the carrier's ADSL. A
1.5-mbps/769-kbps service costs $210 per month.
At U S West -- which, as of this week, was to have its
"MegaBit" service up and running in 36 cities in 12 states -- preliminary
reports showed "strong demand from online users of all descriptions," spokesman
Jon Lentz said.
MegaBit, which has been in operation longer than most
carriers' ADSL services, has more than 100 ISPs on board, including U S West.Net,
Lentz noted. Unlike most other carriers, U S West is directly marketing the service
through mailings to online users, as well as relying on the marketing efforts of its ISP
affiliates, he added.
Telco strategists see the ability of carriers to offer ADSL
through any ISP as a significant marketing advantage as they gear up to take on cable
operators, which typically require customers to sign up with their ISPs to get service.
"People really like the fact that they don't have
to change their ISP to get ADSL," Bolton noted.
But telcos conceded that it's too early to judge if
DSL is having any impact on cable-online services.
One of the first Bell companies to launch ADSL, Ameritech
Corp., is proving to be one of the most cautious in expanding its market base.
At the end of last year, the telco announced plans to bring
services to several Midwestern cities, including Chicago, by midsummer, with the intention
of expanding the reach of its services to 70 percent of its five-state customer base by
sometime in 2000.
But so far, the service is up in only three cities -- Ann
Arbor and Royal Oak, Mich., and Wheaton, Ill., which, as a Chicago suburb, represents the
Chicago-area launch that meets the carrier's earlier commitment, Ameritech spokesman
Rob Lanesey said.
Ameritech won't say how widely available the service
is in these communities or how quickly it will proceed to broader rollouts, other than to
note that in the Michigan cities, service is limited to people within one mile of the
DSLAM-equipped central offices.
"We're moving ahead according to the schedule
that we had at the time of the announcement, but we're not going to go into details
because of competitive considerations," Lanesey said.
One of the ISPs that would have been a potential Ameritech
customer in Chicago -- InterAccess Inc. -- has decided not to wait for the carrier. The
regional ISP, with a customer base of 20,000, has chosen instead to become a CLEC in order
to avoid having to depend on carriers for support, said Lyn Flannery, InterAccess'
vice president of marketing and sales.
"We're betting a big piece of our business on the
future of ADSL by taking this step," Flannery said. "But we believe that
there's a huge opportunity for us here."
DSL rollouts are also moving ahead of the local carrier in
Boston, where San Francisco-based CLEC Northpoint Communications Inc. has signed up five
ISPs to offer high- speed-access SDSL (symmetrical DSL) to their customers.
Northpoint's rates to ISPs start at $109 per month for 160-kbps service, and its
highest rate is $219 for 1.04-mbps service.
The Boston rollout marks Northpoint's first launch
outside of California, where it now offers business-oriented services in its home market,
as well as in Los Angeles.
Bell Atlantic, which serves Boston, will soon announce its
initial launches on schedule with its June announcement, spokesman Larry Plumb said. He
declined to go into any details, but he noted that tariff filings are still pending.
Telcos are also proceeding on schedule with completion of
the standard for so-called splitterless ADSL, which is designed to allow customers to hook
their modems to the service without running lines from premises-mounted splitters to their
The framework draft document for what will become known as
the "G.Lite" standard within the International Telecommunications Union has
moved through the discussion process with a minimum of contention, said Mark Peden, senior
technologist for ADSL at Intel Corp. and marketing chair at the Universal ADSL Working
Group, an ad hoc body that has been spearheading the process.
"We're very close to completion of this part of
the process," Peden said.
While ratification is not expected until early next year,
Peden said, vendors will begin announcing rollouts of G.Lite products next month, and he
expects to see them in stores by the end of the year. He added that vendors will likely
support upgrades to conform to interoperability requirements next year.
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