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"DSL lite" provider in the spotlight

Aware, a small DSL provider, watches its stock leap more than 27 percent after gaining the attention of industry giants Microsoft, Intel, and Compaq.

Aware (AWRE), a small DSL provider in Bedford, Massachusetts, enjoyed the spoils of Internet stardom today as its stock leapt more than 27 percent and its Web site was jammed for hours with onlookers eager to find out about the company that has captured the attention of industry behemoths Microsoft, Intel, and Compaq.

Twelve-year-old Aware, which went public in 1996, How real is DSL? claims to be the first and so far the only company to have combined two technologies that may play key roles in the widespread deployment of high-speed DSL (digital subscriber lines) Internet access. But some analysts question whether the company's technology, which it demonstrated last November, is sufficiently distinguished from or superior to that of its competitors to have earned the company its current celebrity status.

Digital subscriber line technology allows Internet access of about 8 mbps over existing copper phone lines. But phone companies have resisted implementing DSL on a widespread basis because of the expense required to deploy it: each DSL-enabled household requires that the phone company send a service person to install a POT (plain old telephone) splitter, which divides the existing connection into upstream, downstream, and voice.

Enter "splitterless" technology, which "dumbs down" the access technology so that it can fit into a PC modem that consumers could buy in a store. A great deal of speed is lost in the process: splitterless DSL lines, dubbed "DSL light," clock in at about 1.5 mbps. But the advantage of not having to install millions of individual units makes the technology something that full-speed DSL is not: practical. The stakes in this battle are high, because cable television companies are rolling out their own brand of high-speed Net access to compete with the telcos.

The second key technology that Aware uses, after splitterless DSL, is a modulation technique called Discrete Multitone Technology, or DMT. Its benefits, according to the company, are that not only is DMT used with full-speed ADSL, but it is endorsed by the American National Standards Institute and several European standards bodies.

But DMT faces competition from other modulation techniques, and the ultimate standard for splitterless DSL will be handed down from the International Telecommunications Union. Because interoperability is an extremely high priority for computer makers, phone companies, and DSL providers alike, that standard will determine the technology that ultimately is used to propel DSL to the consumer market.

"I don't have any reason to believe that one vendor's technology is going to be made the standard over any other," said Dataquest analyst Lisa Pelgrim. She said that some of the other splitterless technologies were also DMT-based, and added: "DMT vs. CAP [Carrierless Amplitude Phase modulation, a DMT competitor] is not that big of an issue as far as the public is concerned, because whatever the phone companies adopt will be the de facto standard."

Meanwhile, Aware is holding its cards close to the vest. When asked what exactly Microsoft, Intel, and Compaq found so compelling about Aware's technology, company spokesperson Kristin Griffin replied, "That's something you'll have to ask them. It's not really for us to say what the value is."

Griffin did, however, suggest that a major announcement was forthcoming. "In the next week or so there will be [an announcement] that will make this very clear," she said.