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Peering into the DSL future

Industry executives ponder the future of DSL technology in the midst of connectivity problems, order backlogs and tough competition.

BEVERLY HILLS, Calif.--Consumers need to buy digital subscriber line modems and have them work with any company's equipment before the idea of high-speed Net access over regular phone lines can become a reality.

Easier said than done. That's just one of the concerns industry executives brought up yesterday at a DSL conference sponsored by ADSL Forum, a trade group with a stake in digital subscriber line technology.

The industry must also make strong strides to fill orders, and market the technology to consumers and small businesses in order to fend off competition from cable modems. So far, it looks like an uphill battle.

Interoperability will be key to the rapid expansion of DSL service across the country. Currently, some DSL modems will not work with equipment from certain suppliers--something that consumers will not tolerate as the industry takes DSL technology to the mass market. Hans-Erhard Reiter, president of ADSL Forum and a marketing and sales manager at Ericsson, called it a "main focus."

The recent adoption of the G.Lite is expected to help standardize equipment and modems required for the consumer version of DSL, ensuring that equipment can speak to hardware from other suppliers.

"Interoperability [problems] cause uncertainty, and people don't want to make big investments and leaps into a technology when there's uncertainty," said David Eiswert, a consultant with Strategis Group, a market research firm. "It's like, do you want to be someone who makes Beta VCRs."

The industry has suffered setbacks in its bid to grow, due to a complicated hands-on installation process. Executives are hoping the new G.lite standard, which does not require a technician to go to the home and install a splitter that separates voice from data, will help relieve the installation bottleneck.

"The promise of G.lite is the technology will make it so the consumer can go buy it at Circuit City, bring it home, and most of the time?plug it in and it works," said Chuck Haas, Covad's vice president of marketing and business development.

Sluggish Sales
In many instances, the Internet service providers (ISPs) and competitive local exchange carriers (CLECs) send in orders for new DSL service by fax machine--not the best system to push high-volume DSL sales.

"The interfaces aren't very good between the ISPs and the carriers," said Joseph Peck, DSL product manager for Concentric Network. "It's an area I think we can make a lot of progress on in the next year."

Bill Euske, chief technology officer at NorthPoint Communications, said the processes weren't available for CLECs, such as NorthPoint, to order local loop access from the local phone companies.

"As the market matures, and ILECs and CLECs have more experience working together these are becoming less and less of an issue," Euske said. "But they still exist today."

Reiter said ordering back logs have less to do with DSL technology, and more to do with "the operators getting their act together and making sure their processes are in place so that they can actually handle the onslaught of tens of thousands of customers."

Quality of Service
Peck said another obstacle that has slowed DSL's push to the market is that service quality is still not up to requirements. Medium-sized businesses may be unwilling to rely on DSL-if it's unreliable.

Meanwhile, small businesses and telecommuters see DSL as a low-cost alternative, but they want a trouble-free connection. "They just won't tolerate glitches in the process," he said.

Some of the CLECs are offering DSL for the business market, but it's still not business quality, Peck warned. "To really be a business service replacement for fractional T1s and T1s, you're going to have to come up with something better than just best effort service," he said.

Some in the industry fear that any further delays will allow cable modems to become the most popular way for consumers and small businesses to access the Net.

"Are service providers, equipment suppliers, going to take advantage of this [technology], or is this going to be another example of an inferior technology winning? And that inferior technology is cable," Haas said.

Haas said that by leveraging existing copper wires, DSL's promise is in "being able to get one megabit per second off of the same copper wires that struggle to get 56 kilobits per second today."

Industry executives also point to marketing and promotions as essential to gaining support for the technology.

"I think the industry has done a poor job," Haas said. "I think we learned our lesson with ISDN. I don't think it can be called DSL, it's got to be called something else to really capture the imagination of the consumer."

There needs to be a drive to demonstrate to people why they should buy DSL, Strategis Group's Eiswert said.

"What's most important for DSL to be successful is for people to be aware of what high-speed Internet access is," he said. "It's like going to the theater. I don't know what the movie is about exactly, but I'm aware it's playing."