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Hayes demos $300 DSL modem

Hayes joins the parade of vendors with DSL products for high-speed Internet and data access.

At the ComNet trade show this week, Hayes (HAYZ) joined the parade of vendors showing off DSL (digital subscriber line) products for high-speed Internet and data access.

Hayes said it demonstrated prototype DSL hardware that allows download speeds at full DSL rates of up to 6 mbps over existing copper phone lines. That's about 100 times faster than dial-up modems, which deliver data at no faster than 56 kbps.

The networking hardware, in the form of a small circuit board that plugs into a PC, will work with DSL technology from Alcatel (ALA). In turn, Alcatel's technology is being installed in central office equipment used by Ameritech, BellSouth, Pacific Bell, and Southwestern Bell. Hayes expects to begin delivery of the networking hardware by the second quarter of 1998.

DSL technology has been slow to catch on in the U.S. consumer market, not only because it is complicated to install but also because of high costs.

For example, Pacific Bell offers to install network interface hardware and a separate DSL modem for its service--the hardware alone costs around $420, and installation costs bring the total to $660, according to the company's Web site. Pacific Bell also has to install a "splitter" which separates voice and data traffic over the phone line, a hardware cost that is underwritten by the monthly service fee.

Hayes says its network interface circuit board, which includes modem functionality, will cost around $300, a potential savings of about $120 over costs for current Pacific Bell customers.

Even with a lower cost of hardware, limitations still abound for DSL service. The splitter still needs to be installed by technicians, adding to the initial cost of the service. For monthly access, customers in the areas served by the four telecommunications firms pay anywhere from $60 to $125 for access at 1.5 mbps, depending on the region.

In some cases, a home user would pay a fee to the phone company and another fee to the Internet service provider and receive two separate bills a month. Other limitations include the fact that customers must be within two to three miles of their central telephone switching office to receive service.

Analysts expect that mass market acceptance of DSL service is several years out. A new industry consortium has been formed to work on bringing an easy-to-install version of DSL called "Universal DSL," or DSL "lite," which doesn't require the installation of a splitter, reducing installation cost and complexity. The modem could also be plugged in to the computer through a computer's Universal Serial Bus (USB) port, rather than a network interface card. Hayes says it will support this effort.