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Modems: A year of promise

As 1996 wore on, new high-speed Internet access services through cable and ADSL modems were introduced, and a new technology for analog modems promises to extend the current top speed beyond 33.6 kbps by early 1997.

For most of 1996, modems weren't exactly the hottest topic around. But as the year wore on, new high-speed Internet access services through cable and ADSL modems were introduced, and a new technology for analog modems promises to extend the maximum speed beyond 33.6 kbps by early 1997.

Led by U.S. Robotics, this new speed tops 56 kbps, double the standard 28.8 kbps of most standard analog lines now in use. The consensus for consumers seems to be that 56-kbps modems will rule the roost in 1997 but that business users will have a number of speedier options tailored to their particular needs.

One of those alternatives is the cable modem. In 1996, consumers in selected regions finally saw limited service offered at "all-you-can-eat prices of under $40, including modem," noted Lisa Pelgrim, an analyst with research firm Dataquest. However, she added, it won't become more popular than analog service overnight.

As of 1996, about ten percent of cable companies can handle two-way communication, compared with six percent the year before. In 1997, Pelgrim believes, cable companies will continue to expand their infrastructure, making service available more widely.

Cable companies will face stiff competition from ISDN service in the near term and, further out, from XDSL technologies. In the meantime, the first ADSL services have already been launched by several ISPs.

ADSL trials are being conducted by every U.S. regional Bell operating company, according to Kieran Taylor, an analyst with Telechoice. "These fledgling DSL services are the seed from which less expensive, higher-speed data services will be created," he said.

Predictions for 1997
"This [56-kbps modem] is the most significant improvement in speed that we have seen for traditional modems. Because this jump is so great, it is likely that online and Internet service providers will upgrade the equipment at their own central office level and consumers will [easily] adopt the technology because it's just [an easy upgrade], with no complicated ISDN equipment and installation to deal with."
--Wen Liao, senior analyst, Jupiter Communications

"Next year, we may see cable services extend into the business community, offering remote LAN access over cable, mostly for use by telecommuters."
--Lisa Pelgrim, analyst, Dataquest

"In 1997, businesses will find that they have economical alternatives to fractional T1, higher-speed frame relay and ATM connections and economical, transparent LAN Services--all thanks to ADSL."
--Kieran Taylor, analyst, Telechoice

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