ADSL Forum predicts ubiquitous U.S. access by year 2000 But telecos are still figuring out how to profit from the technology By Kristi Essick

April  1997

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Amsterdam (March 18, 1997) -- ADSL will be the favored choice, over cable modem or fiber networks, of small business and home users for the next several decades, experts said at the ADSL Summit here today.

Asymmetric digital subscriber lines (ADSL), a telecommunications technology which promises to boost data transmission rates to up to eight megabits per second over regular copper phone lines, offer a low-cost solution to installing expensive fiber-optic networks and offer several advantages over cable, said William Rodney of Westell Technologies Inc.

"ADSL pushes existing copper to multimedia speeds," Rodney said. In addition, unlike fiber-to-the-curb, fiber-to-the-home or cable modem installations, the hardware is redeployable if a user cancels service for some reason, he said.

Cable modems offer access speeds of up to 10 megabits per second, but since access is shared between households in a given area, access times can "slow down dramatically when a lot of people are online," said Phil Skeba, strategic standards manager for telecommunications company, Ameritech Corp. Traditional ISDN access is less than half what is offered by the lowest-speed cable and ADSL modems, he said. ADSL could be used by content providers to send updates of news and information, for home shopping, telecommuting, distance learning, videoconferencing, video delivery, and collaborative computing, said Rdiger Slabon, group research and development strategy for Deutsche Telekom AG.

"ADSL is the next step from ISDN," Slabon said.

However, ADSL also faces serious roadblocks to adoption that telecommunications companies and Internet service providers will need to address in the next two years, said Kim Maxwell, chairman of the ADSL Forum, an industry group that represents over 200 telecommunications, networking and computer companies interested in ADSL.

These roadblocks span from hardware issues to confusion within the telecommunications industry of what to charge for ADSL service.

Wiring homes for ADSL comprises the installation of a POTS splitter, which allows the modem to deal with incoming ADSL data. The splitter, which has been located in the modem in the past, now needs to be somehow located outside of the modem box in order to provide other services, such as interactive television and video-on-demand, at the same time as online access, Maxwell said.

In addition, ADSL modems must be made more intelligent so that they can distinguish between types of communications in order to split traffic as necessary, he said.

Other problems, such as migrating existing hardware (telephones and PCs) to work with ADSL modems and assuring that network protocols such as IP, ATM and frame relay are compatible, also plague ADSL, Maxwell said.

"An ADSL modem is not a protocol-independent device," Maxwell said.

Another speaker called ADSL and cable modems "isolated high-speed islands of public relations media coverage" which currently fail to interoperate with existing PC and network protocols, according to Skeba.

And while telecom companies worldwide may be rushing to build up their ADSL offerings in hopes of luring consumers away from the cable companies, no one is sure what to charge for the services.

Most telecom companies already offer ISDN and leased-line services at higher prices than ADSL is forecast to cost. While offering low-cost ADSL would undercut the telecom companies' own high revenue-producing ISDN and leased-line services, consumers may choose cable if the cost for ADSL is over $40 or $50 a month, said Bobbi Murphy, chief analyst of telecommunications remote access for market-research firm Dataquest Inc.

"No one is sure what will happen with the pricing model," Murphy said. Telecom providers don't want to drive down the costs of leased lines, but they also want to offer comparable access rates with ADSL at much lower prices, she said.

Why ADSL?
Despite the roadblocks, ADSL seems to be the most viable "interim" solution for high-speed broadband networking over "the next 40 years," Maxwell said. While replacing copper lines with fiber-based ones is the ultimate goal, this won't happen for 40 or 50 years, he said.

"Fiber is the endgame, but ADSL will be here for a long, long time," agreed Murphy.

The major advantage of ADSL is that it works with existing copper phone lines, which have much more widespread penetration than cable, Skeba said. Currently there are only about 4.5 million homes that are "passed" by cable lines in the world, he said.

In comparison, there are 750 million existing copper phone lines in the world, Murphy said. When it comes to laying cable to homes, cable providers could never catch up to the number of copper lines already in place, she said.

"We can mine gold from the copper that's in the ground today," said William Barlet from U.S. West Communications Inc.

Fiber options, such as fiber-to-the-curb and fiber-to-the-building, are still way too expensive and disruptive for anyone but a large corporation, Murphy said. The telecom company has to dig up the ground to lay the cable instead of building on what's there, she said.

However, large corporations will have, or already have, fiber to their buildings. ADSL is better suited to the home market and small branch-office segment, Murphy said.

Estimates about rates of penetration for ADSL service vary greatly between industry experts.

While about 10,000 ADSL modem trials are under way around the world and Saskatchewan Telephone is offering the first tariffed ADSL service, users won't start to flock to ADSL until 2000, Murphy said. Even then, the bulk of users will be businesses.

The ADSL Forum is more bullish with its predictions. By 2000, there will be "virtually ubiquitous access in the U.S." to ADSL services with Europe and Asia following "about two years behind," Maxwell said. By the end of 2001, 25 percent of Internet and remote LAN users will be using either ADSL or cable modems, he said.

No matter what the predictions are, it is clear that companies involved in producing ADSL products are excited about the possibilities ahead.

Motorola Corp., which is developing semiconductors for ADSL network interface cards, chose to put most of its research and development muscle behind ADSL, instead of other emerging technologies, said Jacques Issa, marketing director for broadband access at Motorola.

"ADSL is based on standards and we are big on standards and interoperability," Issa said. While Motorola will continue to support and develop ISDN products, the broadband access department is putting a lot of energy into ADSL right now, he said.

Ericcson Telecommunications Ltd. is also getting into the ADSL game by developing an access system for telecom companies wishing to offer ADSL services, said Piotr J. Korolkiewicz, product manager for broad band copper access products at Ericcson.

"All traditional telecom companies are interested in this technology," Korolkiewicz said. "The Internet has been waiting for fast access such as ADSL."

Resources

• ADSL Forum
  http://www.adsl.com/

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