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Internet

Microsoft ups DSL interest

Along with its foray into high-speed cable Net access, Microsoft also is rapidly expanding its reach into high-speed access over copper wires.

Although gaining much attention for its foray into high-speed cable Internet access, Microsoft also is rapidly expanding its reach into high-speed access over copper wires, dubbed DSL (digital subscriber line).

The software giant had a high-profile presence at a big conference of DSL executives and analysts in San Francisco last week, known as the ADSL Forum. Craig Mundie, senior vice president of Microsoft's consumer platforms division, was a keynote speaker.

Mundie told the audience of 450 from the communications and PC industries that all future Microsoft Windows operating systems will incorporate support for ADSL (asymmetric digital subscriber line) technology. It is another example of how software and hardware makers are hedging their bets in the upcoming battle for Net access between telcos and cable television companies.

Microsoft also disclosed that it is expanding an ADSL trial with GTE during the next several weeks to include more than 1,000 homes and use of 6-mbps ADSL.

"They've been involved in the GTE ADSL trial before they invested in Comcast," observed Randy Carlson, an analyst for the Yankee Group consulting firm. "They're just trying to control the CP [customer preference] equipment as much as they can. It's a very powerful strategy."

This comes on the heels of announcement by Microsoft last week that it would team up with Ameritech to offer DSL access in the Midwest. The companies said they are working with hardware makers to make their PCs and equipment ADSL compatible. The telco also will package its DSL service with Microsoft's Internet Explorer browser.

Microsoft says its strategy is to make installing DSL as easy as Plug and Play.

Telcos, using DSL, and cable television providers, using cable modems, are fighting for a small but expanding share of the high-speed Net access market.

Microsoft says it is determined to provide software for both technologies, although its involvement in the cable-modem end has received more attention. As previously reported, Microsoft has invested $1 billion in Comcast and indicated it would be willing to spend more money in the industry. Many analysts see Microsoft's investment as a catalyst in jump-starting a sluggish industry. Cable-modem service is expected to be one of the industry's biggest growth areas, although it is costly and highly competitive.

By contrast, Microsoft has not indicated it has any plans to make any big investment in the telcos. But as its deals with GTE and Ameritech illustrate, the company is not going to stand on the sidelines either.

A recent study by the Pelorus Group predicts that the market will generate $1.5 billion in revenue by 2001 in the United States and $2.9 billion worldwide, a small but rapidly growing segment of the Net access business.