InformationWeek

December 13, 1999

InternetView:
DSL's Time May Be Now

Jason Levitt he FCC has finally opened the door to widespread deployment of competitively priced digital subscriber line service. Everyone knew it was coming. The FCC disclosed its intentions in March (April 9, p. 76). Last month, the FCC adopted an order saying that owners of the local phone loops-the phone companies-had to give competitors access to those lines. While it may be months before the economic fallout of this ruling reaches consumers in the form of lower DSL pricing, it's already clear that this was DSL's last big hurdle to widespread deployment.

One of DSL's strengths, especially for residential and small- and home-office customers, is that it can work on the same wire with existing analog telephone service. But until this ruling, only local phone companies could offer DSL service over existing analog phone lines. Other DSL providers had to install a second phone line in order to offer service. The extra installation time and hassle required to install a new line made offering DSL service a costly proposition for competitive local exchange carriers. And that translated into lackluster pricing for most customers.

The FCC ruling, however, provides a payoff for all the hard work DSL vendors put into standardizing the G.lite and G.DMT versions of DSL. These flavors of DSL can be deployed on existing analog phone lines, often by users without the help of a technician, making it cheaper, faster, and easier to get Internet access via DSL.

The phone companies can't be happy about this ruling. Like the cable carriers, they'd like to maintain sovereignty over access lines that they have traditionally "owned" and with which they have earned their bread-and-butter income. How to assure quality is likely to be a hot issue, since the phone companies will probably be responsible for maintaining the quality of the analog phone service, even if sharing the line with a third-party DSL provider causes problems. State regulators in Minnesota have already worked out an agreement between US West and several third-party DSL providers, and DSL line sharing could happen there as early as January. However, most DSL markets won't see major changes until well into 2000 as regulators and service providers hash out the technical, operational, and administrative details necessary to implement the FCC's ruling.

DSL pricing isn't bad, but it could be better. I'll soon decommission my venerable ISDN line, which has served me well for the past six years, and replace it with 384-Kbps symmetric DSL. The cost? About $50 less per month than my ISDN line. Adding spice to the broadband competition is AT&T's announcement last week that it will open its cable system, the country's largest, to sharing by third-party Internet service providers. It's an obvious end run by AT&T to avoid having the FCC force it to share.

Telephone line sharing and cable sharing will initially lower prices for home consumers and low-end small- and home-office users of DSL. But mass-market deployment will ultimately affect pricing and availability for business users as well. Line sharing is a big win for both consumers and business users of DSL.

--Jason Levitt can be reached at jlevitt@cmp.com. You can read his Internet Zone column on InformationWeek Online at informationweek.com/author/internet.htm.

Back to the Columnist page
Send Us Your Feedback
Top of the Page