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US West speeds up Net

The company is leading the Baby Bells in widespread offering of high-speed Net access over copper wire, in an effort to compete with cable modem providers.

After hitting some roadblocks, the Baby Bells finally are starting to roll out higher-speed Net access over copper wires, dubbed DSL, hoping to compete with cable modem providers.

US West said today it was the first of the seven regional Bells to offer commercial DSL (digital subscriber line) service for business and residential customers, and Bell Atlantic and Bell South plan to follow suit by mid-1998. Nearly all the other Bells have launched trials, although some, such as one by Pacific Bell in Silicon Valley, have run into delays. Still, Pac Bell plans to get its market trial under way by next month, joining the rest of the pack.

"This, we believe, is the first wide deployment of DSL commercially to large businesses, small businesses, residences, and Internet service providers," said Greg Gum, executive director for "megabit" services at US West, the smallest Baby Bell but the one with the largest territory. US West's speeds are not "megabit" yet, however--they only go as high as 704 kilobits per second. Higher speeds will be added next year, Gum said.

US West is debuting its DSL service in Phoenix to 500,000 potential customers, but plans to expand it to 12 cities in the western United States, including Seattle and Denver, by the first half of next year. It is providing access at speeds of 192, 320, and 704 kilobits per second for as little as $60 per month, plus $200 for installation. By contrast, cable modem operators such as @Home say they typically operate at speeds of 1,500 to 3,000 kpbs for $40 to $45 per month. However, the DSL is faster than ISDN, which typically runs at 128 kbps. DSL also is a dedicated line; using shared lines, such as those run by @Home, theoretically could lower the speed.

US West has struck deals with companies such as Microsoft and Intel, so their workers can telecommute over the high-speed lines, a growing trend. Also today, US West launched its own Net access product, dubbed USWest.net, using Netscape Communicator as the standard browser software. It costs $19.95 per month, although a premium plan (with five instead of two email boxes, for example) will be offered for $25.95 per month by year's end.

As the Bell's DSL service expands, it hopes to compete with the likes of Time Warner, Tele-Communications Incorporated, and Cox Communications, which are starting to offer high-speed Net access via cable systems. (See related story) @Home is jointly owned by TCI, Cox, and Comcast.

The Baby Bells and cable TV operators are seeking to tap a small but rapidly growing market, and their huge communications networks give them an edge over the growing field of players. By the year 2001, the DSL market alone could generate $1.5 billion in revenue, according to a recent report by the Pelorus Group.

But the Bells face hurdles, too. Although their networks are powerful, their ability to market competitive services often is criticized. Until DSL came along, the Bells relied heavily on ISDN as their weapon for providing high-speed Net access. But the penetration rates have proved disappointing, according to many analysts, and consumers have criticized some of the companies for the reliability and servicing of ISDN.

"If the market takes off as expected, this will become a much more competitive offering" than ISDN, said Bruce Leichtman, analyst for the Yankee Group consulting firm.