Computer Giants Ready ADSL Boost


The self-proclaimed bandwidth agnostics of the computer
industry plan to shower their blessings on telco data technology this week, hoping to do
for ADSL modems what they've already done for cable modems in calling attention to
the benefits of high-speed online access.

Sources said Microsoft Corp., Intel Corp. and Compaq
Computer Corp. were working out the final details last week of a 'consortium,'
the goal of which would be to ensure that easy-to-install modems delivering
1-megabit-per-second-plus data service over telephone lines become as ubiquitous as
today's dial-up modems.

The initiative is based on a version of asymmetrical
digital subscriber line technology that its backers claim will allow anyone to plug the
modem into a telephone jack and begin getting high-speed service without interrupting
standard analog voice service.

'If they're able to deliver modems in huge
quantities that meet these performance standards, it will put the telephone companies in a
position to offer really significant competition to the cable industry,' said Bob
Rusak, senior vice president of business development at Time Warner Cable's Road
Runner Group. 'But we've always expected that we would have competition from

The consortium's founders declined to discuss details
of their plans until contracts were firmly in place. But sources within these companies
and among entities involved in talks with them made it clear that the campaign had broad
support from telcos and their vendors. Still, lingering doubts remained as to whether it
was feasible to meet the goal of making so-called ADSL Lite modems available in retail
stores by the Christmas buying season.

'We're interested in ADSL Lite and in anything
that will make this technology simpler to use in delivering services to the
customer,' said BellSouth Corp. spokesman John Goldman. 'If Microsoft is going
to include software in Windows 98 that will allow customers to plug and play ADSL,
that's great.'

BellSouth, which is now in a market trial of DSL in
Birmingham, Ala., plans to introduce the technology in all of its major metropolitan
regions during the second half of the year, Goldman said.

But, he acknowledged, 'we have problems to work
out' when it comes to making the technology a mass-consumer product.

Microsoft has already gone a long way toward developing
this type of software in projects with GTE Corp. in its DSL trial near Microsoft's
headquarters in Redmond, Wash., and with Ameritech Corp., which has begun commercial
service in Ann Arbor, Mich., said Bill Anderson, director of marketing for
Microsoft's Internet customers unit.

'The code built into our operating system will allow
users to configure DSL services in a fairly straightforward manner,' he said.

Mackall said the availability of DSL modems off the shelf
would pose a major challenge to the cable industry, because telcos don't have to
perform expensive upgrades of their lines to begin offering high-speed services.

'For the telcos, it's a variable-cost factor,
based on user demand, where they equip their central offices with the DSL gear as demand
requires,' he said. 'Even if the cable industry is able to push ahead with
distribution of their modems in retail stores, availability of the service will depend on
whether the local operator has upgraded his plant to hybrid fiber-coax.'

But the realization that DSL was coming has been a primary
motivation behind the upgrade and market-rollout pace scheduled by Time Warner and
MediaOne, soon to be partnered in their high-speed-data operations, Rusak said.

As a result, he added, the head start that cable has had in
getting service off the ground puts companies that have been aggressively upgrading their
systems in a good position to go to mass-market offerings by the time ADSL Lite is a
market reality.

'Over time, high-speed access over various platforms
will become commoditized, so the competitive challenge will be to provide services that
add value,' Rusak said. 'People want simple-to-use interfaces and innovative
content, which are the benefits that companies like ours can provide, in contrast to what
pure commodity-transport sellers can offer.'

Sources said the consortium will also announce a specific
modulation approach to ADSL Lite as its choice for modems to be installed in personal
computers, in hopes of overcoming the endless bickering within the standards-setting
groups over competing techniques.

'We've been working for several months with
companies in the industry to help find solutions,' said Compaq spokeswoman Angela

The telephone industry, after years of tinkering, has begun
moving more aggressively with DSL technology, with commercial rollouts underway in small
segments of territories served by GTE, SBC Communications Inc. and U S West
Communications, in addition to those of Ameritech and BellSouth. Bell Atlantic Corp. has
said that it intends to begin commercial deployments by midyear.

The concept behind ADSL Lite, promoted by several
telecommunications vendors over the past few months, involves the use of advanced
modulation technology to help defeat the noise and interference problems associated with
DSL, rather than merely boosting line speeds to ever higher levels.

While standards specifications for the latest version of
DSL supported by most telcos call for data speeds of up to 8 mbps over standard telephone
wires, the emerging standard for ADSL Lite, also known as 'G.Lite,' will set the
upper limit at about 1.5 mbps, leaving ample 'headroom' to address interference.

'One benefit that makes G.Lite so compelling is that
it is splitterless,' said Vern Mackall, senior analyst for International Data Corp.,
a leading tracker of trends in data communications.

The term 'splitterless' refers to the fact that
while today's ADSL systems require that a separate line be split off at the customer
premises to carry the data signal to the PC, so as to avoid noisy line conditions of home
wiring, G.Lite is designed to allow direct connection of the PC modem into existing

But while the splitterless option would do away with the
need for installers, eliminating the protection afforded by a second in-home line makes
the whole idea of high-speed data over telephone lines vulnerable to the unknowns of the
home-wiring environment.

'When you say that you're going to remove the
isolator, you're subjecting yourself to conditions that vary widely from one house to
the next, which makes it difficult to say what the ultimate performance parameters are
going to be,' said Steve Makgill, director of ADSL product management at Alcatel
Telecom, which is supplying gear in the rollouts by BellSouth, SBC and Ameritech.

But, he added, the involvement of the computer consortium
should help to focus the industry on getting answers to such questions and on reaching a
standardized approach to G.Lite.

'Their sense of urgency will help to move the industry
from resolutions involving various approaches to a single approach,' Makgill said.

No matter what, data rates for the vast majority of users
will be well in excess of any rates available today, outside of cable modems, said Steve
Edwards, vice president for high-speed-data services at Nortel, which was the first vendor
to propose a Lite solution.

'We believe that the real sweet spot for giving
consumers a superior online experience over what they have today is at about 200 to 300
kilobits per second,' Edwards said. 'So operating at 1 mbps leaves you a lot of
bandwidth to work with without worrying about disappointing the customer.'