GTE to offer ADSL access
As part of its strategy to expand its telecommunications presence, the company will roll out the high-speed access in 16 states starting in June.
ADSL (asymmetric digital subscriber line) is an Internet access technology that uses conventional copper telephone lines to provide access at speeds of up to 8 mbps. The technology lets users talk on the phone and surf the Internet simultaneously over the same line.
GTE's ADSL offering is part of the company's ongoing strategy to expand from a telco to a one-stop telecommunications shop. The company already offers consumer Internet access alongside telephone service, and last year it acquired BBN to expand its data and Internet services for businesses.
GTE will divide its ADSL offering into five categories tailored to various markets. On the low end, casual consumer Internet users can purchase access at 256 kbps. The increasingly speedy and expensive categories offer service at 384 kbps, 768 kbps, and 1.5 mbps. The company also will offer solutions with throughput higher than 1.5 mbps on a custom basis.
As an aside, the "A" in ADSL refers to the different rates at which information is uploaded and downloaded. But some varieties of the technology still known as ADSL, including some of the GTE offerings, actually upload and download information at the same speed. GTE will probably wind up dropping the "A" and calling it DSL service, according to the company.
For consumers, GTE's ADSL service may prove costly compared to today's common $20 to $25 monthly rate for unlimited Internet access. GTE's low-end 256-kbps service will cost $40 per month, but the consumer must also pay for Net access from an Internet service provider. In addition to those monthly charges, users will shell out for an ADSL modem, which costs $300 or leases for $12 per month from GTE. Getting started requires another chunk of change: installation costs $60 for the outside wiring and $80 for the inside wiring.
Are average consumers willing to pay that much money for fast access?
"I think it will be a while before we know the answer," said GTE Network Services senior group product manager Jeff Bolton. "But if you look at the industry, you'll see ISDN offers that run from $80 a month, in some cases plus usage fees, and ISPs charging an additional $40 for 128 kbps. Our entry is twice that bandwidth and half the price."
ISDN (Integrated Services Digital Network) has not made huge inroads into the consumer market, acknowledged Bolton, but the fast access technology helped prove significant consumer interest in higher-priced, high-bandwidth solutions.
ADSL will compete head to head with other high-speed access technologies, including cable access from companies such as @Home and Time Warner's Road Runner. GTE itself offers cable Net access in Florida and California markets.
Even if GTE's ADSL service proves too rich for the average consumer's blood, the company is counting on higher-end corporate and telecommuting markets to drive demand for the new service.
The company initially will target business and university markets, and later will focus on consumers, according to Bolton.
"Currently, it's very difficult for students and telecommuters to be very effective working on the LAN [local area network]," Bolton said. "We're going to provide speeds much closer to what you get at work or at the university."
Data services are growing roughly three times as fast as voice communications, and are expected to grow to a $400 billion market ten years from now from an estimated $100 billion in 1995, according to GTE.
GTE's announcement comes shortly after a related DSL technology made news and attracted the interest and investments of major software and hardware vendors. So-called splitterless DSL technology does not require an on-site installation. The splitter divides the standard telephone line so it can carry both voice and data simultaneously; splitterless DSL achieves that division with software rather than hardware, but with a cost to performance. Although standard DSL can provide up to 8 mbps throughput, splitterless technology tops out at 1.5 mbps.
GTE will use a standard DSL technology that is convertible to splitterless technology. The company expects to switch over to splitterless DSL when it becomes widely available in the next year to 18 months, according to the company.
GTE will limit its standard solutions to 1.5 mbps for a number of reasons, said Bolton. One of these is that the company expects the Universal ADSL Working Group that is ironing out a DSL standard to approve a 1.5 mbps version of the technology. Another is that the higher the throughput for a DSL solution, the shorter the distance the end user can be from the provider. A third reason is that access providers offering speeds in excess of 1.5 mbps may find those demands excessively taxing on their own capabilities.
GTE is currently hammering out deals with ISPs to provide the service, but the company declined to disclose which ones. GTE has 425,000 of its own subscribers through its GTE Internetworking division, through which it will offer a $60 rate for combined Internet access and ADSL service.
GTE will begin rolling out the ADSL service in June in the following states: California, Florida, Hawaii, Illinois, Indiana, Kentucky, North Carolina, Oregon, Texas, and Washington. Michigan, Ohio, and Virginia are scheduled to follow in July. GTE will add Missouri, Pennsylvania, and Wisconsin in the fall.