InformationWeek

April 5, 1999

InternetView:
DSL Heats Up

By Jason Levitt

heap and fast. Those two words sum up the access desires of many Internet users. But trying to obtain the latest speedy technologies--cable and Digital Subscriber Line--to solve advanced computing scenarios is still tricky. Deployment of these technologies is limited, and getting business-class service can be expensive--when it's available.

On the cable side, it's easy to see why Time Warner and other cable providers simply aren't experienced at offering network services to businesses. The data-network game is new to them. Still, they have advantages over DSL providers--the cable companies own their own lines and don't have to allow competitive data services.

Competition is heating up on the DSL side, with national providers such as NorthPoint and Covad competing with local and regional providers, as well as with the regional Bell companies. The Telecommunications Act of 1996 has forced the Bell companies to allow access to their phone lines, but the enforcement of that access, as well as other technical questions, has been the subject of some debate. A recent FCC ruling (www.fcc.gov/Bureaus/Common_Carrier/News_Releases/1999/nrcc9019.html) may clear the air and lower the costs for DSL competition, as well as open new markets.

Essentially, the FCC made three general rulings, all of which seem to favor Competitive Local Exchange Carriers, such as NorthPoint, over regional Bell operating companies, such as SBC. First, a ruling on co-location is supposed to set guidelines to ensure these carriers can get their equipment into the central office. They had been complaining that the regional Bells were slow to allocate available central office space, presumably so that the Bells could get a head start on their own DSL implementations.

A second ruling on spectrum compatibility will allow new, advanced technologies (not necessarily DSL) to be deployed more quickly in the central office. Interested parties must prove only that their technologies don't interfere with existing services. Telecom hardware vendor Paradyne seems particularly happy about this part of the ruling, since the company is hot to deploy its MVL broadband technology.

The final ruling about line sharing is sort of an acknowledgement that DSL actually works. Previously, the FCC didn't let DSL providers use existing phone lines for DSL--they had to run new copper to make sure existing voice services weren't disrupted. Now, they can use existing phone lines.

These rulings will likely bring down DSL prices, encourage new services, and speed up deployment.