Multiple DSL Voice Lines May Be Available Soon

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Preparations to deliver low-cost multiple-line voice
service over DSL-equipped standard telephone lines are heating up.

Lucent Technologies is sporting a new product line for the
market amid indications that some competitive local-exchange carriers will begin offering
services before the year is out.

Lucent said last week that more than 20 carriers here and
abroad are testing a newly announced next-generation digital-subscriber-line concentrator
that will support up to 16 lines of voice service, along with high-speed data, over the
various DSL flavors.

Its first announced U.S. customer, Primary Network
Communications Inc., plans to get voice-over-DSL service under way as early as the fourth
quarter.

Another CLEC, Picus Communications, said it would deploy a
competing vendor system for commercial launches in several mid-Atlantic cities starting in
November.

"We're taking DSL to the next generation by
combining bandwidth and quality-of-service management, loop qualification,
multiple-DSL-system support and other features, together with voice, in a single,
high-density unit," said Amra Taren, product-marketing director for access products
at Lucent.

Lucent and other vendors are working with the three leading
suppliers of the integrated-access devices and voice gateways that allow the packet-based
voice signals from the end-user to interface with the public switched telephone network.

These interfaces use the same technique -- known as GR 303
-- used in the extension of class-5 circuit-switch functionality to remote terminals via
digital-loop carriers, simplifying the transition to packet telephony.

No carrier has worked longer at developing voice-over-DSL
service than Rhythms NetConnections Inc., a CLEC devoted to deploying DSL facilities that
is now operating in more than one-dozen markets nationwide.

The company partnered with MCI WorldCom Inc. at start of
the year, and in June, it conducted the first publicly announced test of voice-over-DSL
with MCI in New York.

"We're working with several CLEC partners in a
number of voice tests," Rhythms director of innovations Rob Kelley said.
"Everything is on schedule for commercial launches at the start of next year."

By facilitating provision of high-speed data and voice over
existing telephone wires, Rhythms is positioning itself to give CLECs a broader reach into
small offices and homes than they've had using earlier facilities technologies.

"There are 11 million to 13 million small businesses
that use one-dozen or more phone lines and 20 million to 30 million home offices with
multiple-line needs, which CLECs see as a major market opportunity for delivery of
combined voice and data services," Kelley said.

Picus -- a Swiss-based firm with U.S. headquarters in
Hampton Roads, Va. -- plans to deploy 126,000 voice-over-DSL lines within the first year.
The first launch markets would be Hampton Roads and Richmond, Va., as well as Washington,
D.C., and the capital area in November.

Its gateway supplier is privately held Silicon Valley firm
CopperCom, which is one of the three firms -- along with Jetstream Communications and
TollBridge Technologies -- working with Lucent and other suppliers of DSL-access gear to
support voice-over-DSL. Picus gets DSL-access equipment from Nokia Inc.

Gateways from these suppliers provide CLECs with an
opportunity to move immediately to packet-voice services without waiting for IP (Internet
protocol) voice systems to mature, Kelley noted.

"Over the long term, we'll evolve to the IP
platform, but our strategy now is to leverage the class-5 switches with our CLEC partners
to enable delivery of service in a way that fits the current infrastructure," he
said.

A crucial question confronting all of the voice-over-DSL
players is whether their services can be offered as a first-line option and, if not,
whether customers will be willing to go with the multiline DSL service while using a
standard POTS (plain old telephone service) link as lifeline backup.

"It's an interesting question that we're
hoping to answer with a number of tests we have under way," Taren said.

Kelley said trials so far had found the voice-over-DSL
service to be far more reliable than originally anticipated, so it could be offered as a
first-line service with appropriate powering backup.

But, he added, the business community is already accustomed
to bundling data and voice over T-1 lines, with the data and circuit-switched signals
operating over separate frequencies, while using POTS service as a lifeline backup.

TeleChoice Inc. DSL analyst Claudia Bacco agreed that
business users are not likely to have a problem with taking multiline voice-over-DSL and
using POTS for lifeline backup. But residential users might not be so amenable, she added.

"Lifeline is an issue on DSL because if the IAD dies,
the service dies," Bacco said. "It's a lot more feasible for a business to
accept that it will use cellular phones or POTS for 911 service if there's a problem
with DSL than it is for residential users."

In general, Bacco added, voice-over-DSL has become a
must-have feature for DSL vendors, much as G.Lite did a year ago.

Taren said companies testing Lucent's new
"Stinger" concentrator include incumbent telcos that are interested in offering
multiline voice services at the low-cost levels made possible by DSL. "There
aren't that many copper wires out there, and there is a need to conserve switching
capacity," she noted.

While ILECs are likely to stick with the much costlier
second-line and multiline structures they now use wherever possible, a combination of
competitive pressures and "line exhaust" will likely push them into the
voice-over-DSL space over time, Bacco said.

"Looking forward, we expect to see DSL-deployment
figures grow tenfold by the end of 2002," she added.

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