GTE Plots Huge ADSL Rollout

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GTE Corp. will soon add its name to the list of
local-exchange carriers moving to mass-market availability of ADSL services, well ahead of
industry efforts to achieve a standardized consumer-oriented version.

By this summer, the carrier will announce the launch of
asymmetrical digital subscriber line services across a wider region than any targeted so
far by the Baby Bells, offering consumers data services with speeds ranging from 256
kilobits per second to 1.5 megabits per second, said a company source, who did not want to
be named.

Prices in these multiple tiers will average $50 to $60 per
month, including the Internet-service access charge, he said, declining to be more
specific.

GTE thus joins U S West Inc. and Ameritech Corp. as the
carriers committed to wide-scale delivery of consumer- and business-class ADSL services.
This is in advance of the recently formed Universal ADSL Working Group's completion of a
standardized approach to "plug-and-play, splitterless" consumer service.

While SBC Communications Inc.'s Pacific Bell unit has
launched a service starting at $80 per month, excluding Internet access, through 13
central offices in the San Francisco Bay area, this is considered a market trial until
tariffs are filed, which won't be until sometime this summer, said PacBell spokesman John
Summerfield.

While PacBell will broaden its offering in Northern and
Southern California, it remains to be seen whether it will price its service for
consumers. Summerfield said reports that the carrier was promoting a service price of $40
per month or so to be offered by year's end were in error.

Other major carriers have yet to announce their plans, but
they seem likely to pursue slow rollout courses, pending the completion of a
consumer-friendly standard.

But U S West, Ameritech and, now, GTE have made it clear
that they're going after the consumer market as a major part of their strategy, without
waiting for the "ADSL.Lite" standard.

The GTE source said the company's huge midyear announcement
will target markets in Florida, Texas, California, Washington state and elsewhere.

U S West, with its "MegaBit" 192-kbps consumer
service under way in Phoenix, has already announced plans to provision central offices
serving 5.5 million lines in more than 40 cities for the launch of 256-kbps and
higher-rate services by the end of June.

Ameritech, which is still in its initial launch phase in
Ann Arbor, Mich., and which is about to extend service into nearby Royal Oaks, remains on
track to be in several cities, including Chicago, with its $49.95-per-month, 1.5-mbps
service by midyear, said spokeswoman Jean Medina.

GTE is not under any delusions that plug-and-play will
drive its market early on in the rollouts.

"One of the differences that we have with the PC
[personal computer] manufacturers is that although our deployment plans will be strong,
we're not going to give the impression that consumers will be able to walk into computer
stores this Christmas and choose a PC equipped with an ADSL modem," said the GTE
executive.

GTE was about to make a choice of technologies and vendors
at press time, the source said, declining to say which modulation standard the company
would pursue, DMT (discrete multitone) or CAP (carrierless amplitude phase).

While GTE, along with all of the regional Bell operating
companies, is a member of the UAWG, which has selected DMT, its choice of vendors will be
based on which suppliers can meet "our short- and long-term strategies at cost levels
that support delivery of services at affordable prices," the executive said.

U S West, while strongly endorsing the UAWG, has selected
equipment from NetSpeed Inc., which employs CAP modulation techniques. But NetSpeed's gear
is designed so that DMT solutions can be implemented over embedded equipment if U S West
wants to, said Sharon Power, marketing-communications manager for NetSpeed.

The carriers that are currently moving ahead with
consumer-grade service deployments are willing to gamble that market demand and the
opportunity of being early to market are worth the encumbrance of having to send
technicians to hook up customers.

The two key impediments to eliminating the truck roll are
the lack of software plug-and-play components and the need to run a second line to the PC
from a splitter attached to the drop at the side of the house. ADSL.Lite is designed to
overcome both obstacles.

Carriers pursuing aggressive rollouts of consumer services
now are probably better off than those that wait for the completion of the UAWG standard,
said Paula Reinman, senior broadcast consultant for TeleChoice Inc.

"Just like anything else in technology, I think that
the UAWG initiative won't go as fast as some people hope," Reinman said.
"Carriers might find that they're waiting longer than they'd like if they wait for
everything to be resolved before they launch services."

Another contrasting factor between carriers that are moving
aggressively into the consumer market and those that are holding back is the extent to
which they're willing to risk cannibalizing existing service markets, such as the market
for ISDN (integrated services digital network).

"We won't abandon ISDN, but there will be price
pressure on that service," said the executive quoted earlier.

"We've performed extensive testing of ADSL in five
trials, so we've learned a lot about who will use the service and who won't," he
said. "Our research has convinced us that even in the early stage, when we have to
send out installers, casting a wide net in our marketing efforts will be the most
rewarding way to use this technology."

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