The @Work unit of @Home Network said it will use
digital-subscriber-line links, becoming the first cable-backed company to exploit the
leading alternative to hybrid fiber-coaxial networks.
@Work is contracting to use DSL links that will be supplied
nationwide by start-up NorthPoint Communications Inc.
Company officials stressed that they undertook the deal --
which includes a small equity stake in San Francisco-based NorthPoint -- not to compete
with cable, but to give @Work the broad-based access to the business community that it
Nonetheless, with cable companies of every description
moving to target businesses with high-speed-data capabilities, there was little reason to
doubt that @Work would find itself competing with nonaffiliated cable companies for
commercial accounts. @Work will use NorthPoint's symmetrical DSL facilities.
"Our optimum transport medium is HFC," said Eric
van Miltenburg, director of business operations for @Work, "but while @Home has more
than one-dozen affiliates on the consumer side, we only have three on the
He cited New York; Boston; Washington, D.C.; and Los
Angeles as cities where SDSL will make wide-scale commercial access possible for @Work.
"We don't have an opportunity to leverage HFC in these areas," he said.
NorthPoint, which now operates in the San Francisco Bay
area and Los Angeles, has plans to launch in seven to 10 more first-tier markets before
the year is out. This would help @Work to reach markets that it lacks in its affiliation
with Teleport Communications Group -- the nation's largest competitive local-exchange
carrier, which is soon to be a unit of AT&T Corp. -- van Miltenburg said.
"We're using TCG largely to deliver services over
traditional T-1 and fractional T-3 connections, but, as TCG's management has
acknowledged, TCG hasn't had a sharp DSL focus, so it doesn't give us the reach
that we need to get to the smaller businesses," he added.
The plans to purchase access transport over
NorthPoint's SDSL facilities were formulated prior to the announcement of
AT&T's agreement to acquire @Home's largest shareholder, Tele-Communications
Under deregulation, the unbundling of telco loops has
opened an opportunity for providers of every stripe to make use of DSL technology to enter
the high-speed-data market. This includes not only CLECs, but also long-distance carriers,
such as Sprint Corp., which recently announced its plans to use the telco platform.
AT&T has not made it clear how it intends to get into
local markets where it has no cable affiliates, but its CEO, C. Michael Armstrong,
stressed his intention two weeks ago to offer high-speed data, along with telephony,
everywhere -- whether or not the company has access via HFC.
The first commercial launch of @Work's services over
HFC is under way in the San Diego and Orange County, Calif., franchises of Cox
Communications Inc., where system performance and market demand have more than lived up to
expectations, said Don Hutchison, senior vice president and general manager of @Work.
"We have well over 100 accounts after only three weeks
of operation on the Cox systems," Hutchison said.
@Work is also planning to make use of affiliates' HFC
plant to launch a commercial telecommuting service in unnamed territories, starting at the
end of this month, Hutchison noted.
"Our market trials of this service have gone extremely
well," he added.
Technicians from @Work took a long, hard look at
NorthPoint's SDSL system, supplied by Copper Mountain Networks Inc., before agreeing
to use the system, van Miltenburg said.
NorthPoint has developed a tool that works well and that is
better-suited to our needs than ADSL," he added.
NorthPoint's SDSL-transport service is priced at
between $100 and $200 per month, and it operates at speeds ranging between 160 kilobits
per second in both directions to just over 1 megabit per second.
SDSL differs from ADSL (asymmetrical DSL) not only because
the line rates are the same in both directions, but also because it uses the older, more
robust line-modulation technique employed in T-1 and ISDN (integrated services digital
network), known as 2B1Q.
"We're frequently able to turn up customers that
Pacific Bell can't reach with its ADSL facilities," said Michael Malaga,
president and CEO of NorthPoint.
He noted that SDSL can be delivered over lines up to 24,000
feet in length, versus the 18,000-foot ceiling on ADSL.
Malaga declined to name the cities that NorthPoint has
targeted to move into next, but he stressed that the company has what it needs to achieve
nationwide reach very quickly. He said NorthPoint has venture-capital backing from three
large firms, and its leadership consists of former top executives of Metropolitan Fiber
Systems, the CLEC that is now owned by WorldCom.
"There's tremendous demand everywhere for
affordable high-speed-data access, and no infrastructure that's been optimized to
supply it," Malaga said.
NorthPoint, by colocating its DSLAMs (DSL-access
multiplexers) at key central-office locations in target markets, will offer
Internet-service providers use of its facilities to connect with customers as they secure
service contracts, leaving up to the ISPs which ones get which customers.
@Work and other ISPs will add charges to the basic
transport costs for the supply of Internet access and value-added services, such as
outsourced e-mail and management of customer-premises equipment -- two areas that @Work
sees as strong suits for its product.
Incumbent carriers remain a challenge to NorthPoint's
deployment plans in some areas, notwithstanding the rules that federal and state
governments are implementing under the Telecommunications Act of 1996, Malaga said.
"As veterans of MFS, we knew what the issues were
going to be," he added, noting that in some cases, telcos are doing everything that
they can to prevent colocation of NorthPoint's gear within the central offices.
Like HFC, DSL connections open a means of delivering
packetized-voice services, which is something that @Work is likely to do, along with most
other high-speed-data suppliers, sometime over the next two years or so, Hutchison said.
Malaga noted that by optimizing his company's
regional-network architecture for the delivery of IP (Internet-protocol) services, the
facilities are "IP-voice-ready," leaving up to ISPs the timing of getting into
the voice-services business.