Like any company with dozens of small branch offices, Norman, Okla.-based McSha Properties Inc. was limited to communication by phone or e-mail via modem. When Atlanta-based Cox Communications Inc., the local cable provider, gained 70 percent market penetration in Oklahoma, the coast was clear for the developer and property manager to finally get broadband out to 25 of its 30 sites.
The company's experience is a prime example of how the emergence of new broadband technologies, such as cable modem, Digital Subscriber Line (DSL) and two-way satellite, is finally making broadband possible - and affordable - for remote branches and telecommuters. For McSha, the price will be US$89 per month to service each two- to three-person site, a fraction of what T1 or frame relay would cost, says Andrew Carlson, McSha's vice president and CIO.
For that price, many companies can now afford to have enterprise applications spread much farther out into their enterprises, and telecommuting may become a more practical option for more workers. For McSha, cheap, ubiquitous broadband means PCs located at small sites hundreds of miles from headquarters could be centrally managed using NetMeeting and other Windows 2000 technologies.
While the price may finally be right to get broadband out where it couldn't go before, some big questions remain: Has broadband technology stabilized to the point of being safe for business deployment? Are providers ready to offer business-class service levels? And most important, is it available everywhere that businesses need it? The short answer is that the technologies and the vendor infrastructure are still works in progress. Not only is the infrastructure incomplete, but in many cases, commercial enterprises are having a hard time getting service because many providers are targeting residential customers first.
Spotty but Expanding Coverage
Broadband options for business have traditionally consisted of T1 or frame-relay lines, which cost up to $1,500 per month. Capacities ranging from 256K bps to 1.5M bps, which could be cost-justified only for large offices with hundreds of people, cost $1,500 per month and up.
By contrast, cable and DSL alternatives promising speeds from 256K bps to Ethernet-like 10M bps are becoming available for prices ranging from $50 to $200 per month for residences and businesses, based on bandwidth and whether the connection is equally fast in both directions. Meanwhile, new two-way broadband satellite access promises uplinks at up to about 1M bps to remote regions. Each broadband technology provides different access methods, bandwidth choices and security concerns.
But availability remains spotty. Nationally, suburban areas have generally gotten the head start on broadband because construction costs are lower than in downtown areas and the potential market is more lucrative than in rural areas. The cable industry, which hopped on the broadband bandwagon first, is roughly halfway through the job of rewiring its service areas, according to Gartner Group Inc. in Stamford, Conn.
Coverage areas further complicate the picture. For instance, although the cable industry is rapidly consolidating, service providers often vary by town. When New York-based investment firm Merrill Lynch & Co. began its first large-scale telecommuter broadband program to serve its central New Jersey offices, it partnered with Comcast, the area's largest cable provider for remote access. Yet only half of Merrill's local telecommuter base fell within the Comcast service area.
Choosing a DSL service provider can be confusing. Local telecommunications companies - which own the last-mile connections between long-distance lines and homes or offices - are the logical candidates, but while some have built out their DSL capabilities aggressively, others haven't.
Then there's the new breed of so-called competitive local exchange carrier DSL providers, such as Covad Communications Group Inc. in Santa Clara, Calif., NorthPoint Communications Group Inc. in San Francisco and Rhythms NetConnections Inc. in Englewood, Colo., whose share prices and financial stability have gone south due to the up-front costs of building thousands of local switching facilities nationwide. Last but not least are the established national long-distance providers, which are still literally piecing together national rollout strategies.
With all of these uncertain options, the risk of making a wrong choice is real.
"You may have to worry about picking winners," says Beth Gage, a vice president at TeleChoice Inc., a telecommunications market research firm based in Tulsa, Okla.
The bottom line is that one-stop shopping for broadband isn't likely. "There is never going to be one solution that goes everywhere," says Alexander Winogradoff, an analyst at Gartner's Dataquest.
Mason Rotelli, CIO at cabling supplier Communications Supply Corp. in Carol Stream, Ill., agrees. The company is using Sprint Corp.'s new ION bundled services program to add T1 access to many of its 28 regional offices, but Rotelli says he views DSL as promising for telecommuters or smaller offices.
"We will look seriously at Sprint DSL options because I would like to roll them into my corporate bill," he says. "I think it will be a long cycle, however, before DSL is provided ubiquitously."
What Businesses Really Want
Businesses don't like to share networks, and they don't want to wait in line behind dozens of consumer calls to get problems fixed. And in most cases, businesses need service levels that they can count on. The network must deliver specified levels of availability, problems must be resolved within a definite time period, and bandwidth must be guaranteed. Requirements are usually higher when a branch office, rather than a telecommuter, is involved, because branches house more people.
In contrast, most of the new broadband alternatives, including cable, DSL and satellite, are still delivered on a "best-effort" basis, and not all providers have yet set up the dedicated teams for commercial customers that business-grade service may demand. Furthermore, there are real technology limitations. For instance, the shared nature of cable means bandwidth and message delivery can't be guaranteed.
Business-grade systems are coming slowly but surely. Some cable and DSL providers are adding special business service tiers that dedicate separate installation, service and support teams for business customers. In some cases, they may add new LAN integration or application service provider services that go beyond the modem, the traditional edge of coverage. And some technology innovations, such as the emerging Data Over Cable Services Interface Specification for cable broadband service, will let cable providers reserve bandwidth for premium customers and thus start selling guaranteed service levels.
While many of these service bundles target small to midsize businesses that lack their own IT support staffs, larger enterprises are keeping control of managing their own networks and supporting their own users. For instance, Merrill Lynch continues to manage its own networks, issuing each telecommuter a standard package of hardware and software. It also handles technical support calls during business hours, redirecting off-hours calls to the normal Comcast residential support queues.
The degree to which broadband in new locations affects LAN and Web infrastructures often depends on whether there was one in the first place.
At Merrill Lynch, the core infrastructure was hardly affected because adding telecommuters was simply a matter of accommodating the same users from different access points. Cable modem clients are connected to the Merrill Lynch network via a virtual private network (VPN), bypassing the cable company's Internet server. Security is managed through use of the VPN and corporate standards dictating hardware and software configurations on Windows NT platforms. Merrill Lynch is also considering adding personal firewalls and encryption.
At McSha Properties, the installation of cable broadband service prompted a monumental upgrade of the primitive internal infrastructure. "We ended up doing a cable and [Windows 2000] machine upgrade concurrently because there was such a synergy between the two," says Carlson, listing benefits such as in-the-box VPN and encryption support and the ability to remotely manage client desktops.
Similarly, the installation of high-speed satellite downlinks prompted the Modoc, Calif.-based Joint Unified School District, which serves a remote California county, to expand its Novell LAN environment to 300 desktops.
And at Alamosa, Colo.-based El Telar, an e-mail and Internet service provider affiliated with the regional economic development agency, the installation of high-speed satellite connections provided the impetus to bring the hosting of its Web site and e-mail server in-house. That created a need for a firewall and several Windows 2000 and BSD Unix servers.
The impact of broadband may depend on user behavior. At the University of Cincinnati, which added broadband DSL and cable modem access for telecommuters to supplement 650-line modem banks, so far, faculty and staff rather than students have been using the broadband access.
For the most part, this group's usage patterns have remained bandwidth-friendly, involving transaction applications and research-oriented document retrieval. If more users take advantage of broadband access, the university might have to ration bandwidth, says Fred Siff, the university's CIO. Before the school shut off Napster access last spring, the music service hogged half of the bandwidth on the modems.
"We already have an OC-12 ring around campus, and we don't expect to expand that anytime soon," Siff says.
With the cable, DSL and satellite industries just starting to get serious about business services, ramp-up problems have perhaps been inevitable. At El Telar, it took several months to diagnose a faulty router in its satellite transceiver and then get the replacement properly configured. Modoc had to tweak its Novell proxy server.
As one of Cox Business Services' earliest customers in the Oklahoma City area, McSha initially encountered problems finding knowledgeable support staff, recalls Carlson. Additionally, just after Cox acquired a rival system in the area, there were intermittent router problems.
In some cases, the hurdles may be application-oriented. Bob Evans Farms Inc. in Columbus, Ohio, is upgrading its 450 restaurants to faster, IP-based asymmetric satellite links to integrate inventory management. To do this, the company needs to reconfigure its Lotus Notes replication features, which would otherwise tend to clutter the transmissions with lots of background low-level communications.
The bottom line is that cable, DSL and satellite broadband are undergoing the shakedowns that are typical of any emerging technology.
"Cox hasn't been 100 percent [available]," says Carlson. "But you have to ask yourself, Is your phone really 100 percent?"
Baer is a freelance writer based in New York.