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DSL to make its mark in 2000

Use of cable modems will continue to dominate DSL in the near future, but new studies show the high-speed data-over-copper technology may get increased play after 2000.

    Use of cable modems will continue to dominate digital subscriber line (DSL) in the near future, but two new studies show the high-speed data-over-copper technology may get increased play after 2000.

    The Strategis Group, a telecommunications market research firm, forecasts 6.2 million cable modem households by 2003, up from roughly half a million users today. Approximately 9.1 million households will subscribe to a broadband service in 2003, making it a $3.8 billion business.

    DSL will reach 2.9 million households in 2003 with much of its growth coming after the year 2000, the Strategis study found.

    G.lite makes the connections
    The G.lite standard, adopted in October, is the key to DSL's growth, analysts said.

    "G.lite is going to become a reality by then and we'll have more standardization from folks like the [International Telecommunication Union] and ADSL Forum," said David Eiswert, an analyst with Strategis Group. "By that time [2000] there's going to be a certain level of regulatory certainty."

    The G.lite consumer-ready version of asymmetric digital subscriber line (ADSL), with download speeds of up to 1.5 Mbps, will allow customers to install the equipment themselves--a major hurdle to mass market penetration.

    Currently, only technicians can install DSL modem technology for consumers, creating an "installation bottleneck" which has limited the spread of DSL and cable modems alike.

    Of course, standards-based Data Over Cable Service Interface Specification (DOCSIS) cable modems will begin to roll out in significant numbers next year, alleviating similar installation constraints on cable modems.

    ADSL in the lead?
    But others project DSL will outpace cable modem use in five years.

    ADSL technology--the most popular DSL "flavor" See related story:
How real is DSL?for consumers because of its fast download capabilities--will account for 37 percent of the U.S. broadband services market in 2004, according to communications consulting firm Allied Business Intelligence. Allied pegs ADSL's broadband market share at just 6 percent in 1999.

    The Allied study shows ADSL topping cable modems with 26 percent market share in 2004. Two-way microwave will account for 11 percent, while satellites will represent 7 percent of broadband services in five years. The report expects broadband subscribers to increase to 21 million by the end of 2004, up from 4.2 million expected next year.

    ISDN takes a hit
    The big loser? ISDN.

    Allied expects ISDN leased lines to fall to 17 percent of the market from an estimated 74 percent for 1999.

    ISDN, or integrated services digital network, is a high-speed alternative that has been around for some time, yet has never caught on with carriers capable of providing the service.

    Some experts have argued that Baby Bells are unlikely to roll out DSL in earnest for a couple years, at least until a ground swell of support for the technology exists. Many telecommunications companies would rather opt instead for the higher profit margins on ISDN and T1 lines, some critics have said.

    "Telcos are not going to move until they have to," Eiswert said. "Everywhere they don't have competition you're likely to see slower [DSL] rollouts."