HSA Latest to Add DSL To Broadband-Data Menu

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High Speed Access Corp. is racing to grab morebroadband-data customers by offering digital-subscriber-line service to complement itscornerstone cable-modem networks.

Similar alternative broadband-service strategies areincreasingly being pursued by cable high-speed-data providers like HSA, as itscable-operator customers want to penetrate nontraditional markets such as businesseswithout cable access -- businesses that telcos are courting aggressively with DSL.

"It's not the best solution -- the best solutionis the cable plant," HSA president Ron Pitcock said. "This will keep uscompetitive with other technologies, like DSL players coming into the cable market."

Under its new strategic partnership with wholesale DSLprovider NorthPoint Communications Inc., Denver-based HSA will sell symmetrical DSL,providing bandwidth of up to 1.5 megabits per second over existing copper phone lines inmarkets where it provides cable-modem infrastructure and services to local systemoperators.

Primarily, that will be where customers are outside offranchised areas or are in locations not yet reached by two-way cable plant, Pitcock said.

HSA will use its existing sales and engineering forces tohandle the service, which will be branded by its cable-operator customers.

NorthPoint already provides DSL service in 28 major U.S.markets, with plans to pass 4 million businesses and 50 million homes by early 2000.

HSA has focused on "exurban" areas, catering tosmall and midsized cable operators outside of or on the fringes of major markets. Pitcocksaid that strategy would not change, although it remained subject to customer needs anddemands.

"We won't be offering DSL in areas where we donot have a cable agreement," Pitcock said. "If there's an overbuildsituation and we can help a cable operator with DSL, we'll talk to them aboutit."

Pitcock noted that HSA already used noncable accessplatforms where necessary -- dial-up Internet access, for example -- and it was exploringothers such as satellite-backbone connectivity and, in international markets, wireless"last-mile" access.

Already pursuing similar strategies to penetrateunderserved-by-cable business areas are AT&T Broadband & Internet Services, whichwill use DSL where customers want it and where it has no cable presence, as well as cableInternet-service provider Excite@Home Corp., which offers DSL Internet services throughits @Work business-oriented division.

At the same time, the Road Runner cable-modem system has noDSL connectivity plans for now, according to spokeswoman Sandy Colony. "We'vegot so much business to deploy, DSL is really the competition," she said."We're deploying as fast as we can, so we're focusing on today'sbusiness."

But Jonathan Atkin, an analyst at investment firm Ferris,Baker, Watts Inc., said he expected other cable-oriented Internet providers to reach dealswith DSL-service operators because of the time-to-market advantage it provides.

"Copper already exists and covers all homes andbusinesses, unlike HFC [hybrid fiber-coaxial]," Atkin said. "It's a goodkind of filling option for people like High Speed Access or whoever wants to supplementtheir service offerings and go after a broader market."

There has been speculation that such hybrid cable-DSLstrategies could lead to cable operators essentially offering "overbuilt"broadband-data services in markets where they don't have franchises for their HFCplant.

That idea gained some currency with Paul Allen'srecent investment in cable overbuilder and DSL provider RCN Corp. The question arose againwith the HSA-NorthPoint relationship: Allen's Vulcan Ventures Inc. is a significantinvestor in both companies.

But HSA said it has no interest in using DSL to gohead-to-head with other cable ISPs in NorthPoint's major markets, which alreadyinclude the central business districts of New York, Atlanta, Seattle and other citieswhere incumbent MSOs offer cable-modem services.

NorthPoint chief development officer Whitey Bluestein saidthat while Vulcan encouraged his company to talk with HSA, the pair found their ownsynergies in the process of due diligence, as well as demand from some HSA customers thatcould only be fulfilled by adding another access platform.

"We don't view the world as DSL versuscable," Bluestein said. "We view this as all of the competitive providerscompeting with the phone company, the incumbent, for broadband services."

Pitcock said that besides its footprint, NorthPointprovides DSL skill sets to HSA that would have taken six months or a year for the companyto develop on its own, such as deployment and provisioning of service. NorthPoint willalso provide Internet-backbone connectivity, which is essential for helping HSA toefficiently cluster its markets.

Pitcock said having DSL capabilities will help to cementdeals with some fence-sitting cable operators with plant that might not be ready forfull-blown cable-modem service. He added that HSA would probably announce such newcustomers in the next several weeks.

"Cable operators are the ones that pushed us to dothis," Pitcock said. "We would not have gotten the franchise with these [new]cable operators had we not had the ability to provide DSL."

Bluestein said NorthPoint was seeing the sametechnology-agnostic approach from other customers, which were concerned primarily aboutcompeting for broadband customers.

"As a wholesale provider, there will be a lot of ISPsthat offer our services in areas that are covered either by High Speed Access or theircable partners," Bluestein said. "Customers are going to have to make choices.They're going to make the best choice to meet their requirements."

NorthPoint's other alliances include a deal withMicrosoft Corp. to market NorthPoint DSL service, plus an alliance with Tandy Corp. as thepreferred DSL provider for that company's 1,400 RadioShack electronics stores.

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