Fast Is Good, But Playing Both Sides Is Better

Author:
Publish date:

Whether or not 'G.Lite' hits the spot, this
latest digital subscriber line initiative is a reminder that high-speed competition is
just getting started. Not surprisingly, Microsoft and its sometimes-collaborator, Intel,
are in the midst of this effort. Microsoft's role, in particular, underscores the
software company's imperative to be part of the digital pipeline into the home.

Every pipeline.

Microsoft, Intel and Compaq have allied with seven
telephone companies, plus a host of technology vendors, to create a 'universal'
asynchronous DSL standard for 1.5-megabit-per-second Internet access, using telcos'
existing wires. (By the way, these are the same wires once envisioned for use in
video-on-demand delivery, when the telcos thought that ADSL was a video vehicle.) The goal
is to establish 'ADSL Lite,' which could rival cable modems for high-speed
access and 'always-on' service to homes.

Does anyone think that it's a coincidence that this
latest telco-Silicon Valley cabal materialized just two weeks after Tele-Communications
Inc. shunned Microsoft's sole-solution set-top box imperative? For that matter,
Intel, which has recently shown renewed interest in cable's MCNS agenda, admits that
it 'is not taking sides.' It just wants to see higher bandwidth and a rich
competitive environment -- no matter who supplies it.

It's easy to dismiss ADSL Lite as another lethargic
telco effort to find a market for its DSL service. But the plan -- especially with the
technology companies' distribution capabilities -- will force consumers to confront
fast choices. The venture could also shift the point of control toward telcos, giving them
the ability to determine the pricing of high-speed services and modems. Telcos -- not
cable companies -- could steer the marketing of these services in some communities.

Moreover, the whole process is a lesson in Microsoft's
hardball tactics to pit its partners against each other -- with Microsoft (and Intel,
Compaq and their other allies) playing on the winning team, no matter who wins.

The overarching ADSL Lite vision of the computer and
telephone companies calls for the new home hardware to be in retail stores by Christmas,
priced at under $200. Last week's announcement was merely a standards alliance,
making it hard to expect that all of the network engineering and modem manufacturing could
be in place that quickly -- at least not on a widespread basis. These companies just
can't work that fast. But they can put some place-holding technology into the arena.

Their standards-setting involves sending a proposal to the
International Telecommunications Union, which is scheduled to take up the standard next
month. (G.Lite is the nickname for the ITU working group that is exploring the 'ADSL
Lite' standard.) The ITU is not under deadline to approve any proposal.

Obviously, a venture of this size has been in the works for
months. Unveiling the plan on the heels of TCI's dual deals with Microsoft and Sun
offers a blunt reminder that Silicon Valley tech merchants will sell their technology to
any and all carriers.

Who can blame them?

Almost lost in the ADSL flurry was another recent Intel
announcement: Its 'Quick Web Technology' software lets Internet providers and
digital distribution companies increase the speed of delivery of Web pages containing
photos, drawings, or other graphics. The software requires customers to change their
Web-browser settings to access and use the technology, which is already being used by
large ISPs such as Netcom and Erols Internet. Quick Web compresses data so that Web pages
move faster to the user's PC, and it caches images to create a kind of desktop proxy
server for graphics-intense images.

These kinds of speed-up techniques will continue to become
more important as the Web becomes more visually complex. The ADSL plan gives telcos a
competitive tool to assist them as they stake out the richer Web.

Significantly, the telco initiative surfaces just as the
cable-modem audience becomes measurable. During the last three months of 1997, the number
of cable-modem users jumped from 55,000 to nearly 110,000, according to our quarterly
census of home online/Internet users. That's still less than 0.5 percent of the U.S.
Web audience, but most of that crowd is still poking along at 28.8 kilobits per second or
slower.

Critics are already saying that the telco-SiliValley ADSL
initiative is doomed because of slow trunk Internet backbones, lack of local switch
equipment and other barriers. But many of the same problems afflict cable-modem service.

As it raised the curtain on ADSL Lite, Intel cautioned that
it didn't want to set expectations too high. But this isn't just about high --
it's about fast. The usual suspects from the left coast are in place to affect how
quickly telcos and cable run this race.

I-Way Patrol columnist Gary Arlen publicly acknowledges
the need for speed.

Related