Tuesday, January 27, 1998

Internet access speeds up: Phone, computer firms to unveil ADSL lite

By Jennifer Files

The Dallas Morning News

(KRT)

Telephone companies and computer makers detailed plans Monday for a new kind of high-speed Internet access, up to 30 times faster than today's modems, priced at $40 to $60 a month.

Called ADSL lite, it's a slower but cheaper version of the asymmetric digital subscriber line technology that phone companies, including Southwestern Bell and GTE, are already testing in roughly 4,000 homes across the country.

Previous attempts by phone companies to sell superfast Internet access never took off because lack of availability, frustrating delays and service problems dissuaded people from paying the extra cost.

Though ISDN phone lines transmit information faster than today's fastest standard telephone modems, that technology is probably better known by its nickname "It Still Does Nothing" than the more proper "integrated services digital network."

The latest effort, however, has several advantages.

First, it's much faster, offering speeds that make Internet access practical for videoconferencing or other business applications.

Current tests have been priced at up to $250 a month with the assumption that businesses would subsidize the costs when employees used ADSL.

"We've had customers who have told us we would have to pry the modem away from them after the trial ended," said GTE spokesman Bill Kula. Others threatened to move to cities where they could get it.

With support from technology giants including Compaq, Intel, Microsoft and Texas Instruments, consumers will be able to buy PCs with ADSL modems already installed.

Also, ADSL works over existing phone lines.

Although installing today's version requires a visit from a phone company worker, the next-generation technology won't, and that will significantly reduce installation costs, thus making ADSL affordable for a wider segment of residential customers.

"If you have to send a service person to every home, it's never going to fly," said Krish Pradhu, chief executive officer of Alcatel Network Systems, which makes ADSL modems and related equipment for four of the nation's largest phone companies.

"This latest initiative ... provides the grass-roots market pull that a lot of skeptics have been saying could be missing because the phone companies can't do it on their own."

Analysts say ADSL could be a threat to new cable modem technology, now available in about 10 percent of American homes.

Cable modems, which cost consumers about $40 to $70 a month after installation charges, have been seen as a potential industry savior, providing higher profits and keeping subscribers from abandoning cable for satellite television.

"There will be a real battle between cable providers and the ADSL providers," said Kula of GTE, which currently offers both services in different parts of the country.

Wary of making promises they can't keep, phone companies are already backing off from last week's reports that ADSL could be a hot holiday season product.

Southwestern Bell and GTE say the technology could be available in the Dallas area this year, but they haven't set the schedules in stone.

"Dallas is always one of our very high priorities," said Ed Reisner, executive director of SBC Operations Inc., which develops technology for Southwestern Bell.

"I would say within a year is very reasonable."

Kula said GTE plans to first convert its current test markets but added that the Dallas suburbs it serves also would be among the first markets offered ADSL service.

Small towns will see it more slowly, however, and it is unclear how widely the built-in modems will be available.

"The general public shouldn't expect to walk into any computer store and acquire an ADSL modem this Christmas," Kula said.

Still, Alcatel expects to sell equipment to North American customers supporting 1 million modems a year within three to five years.

Such sales could bring in $500 million annually for the division, a significant contributor to the unit, whose 1997 sales totaled $1.3 billion.

(c) 1998, The Dallas Morning News.

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