DSL not derailed by AOL-TW merger

Although the America Online-Time Warner merger turned many eyes to the broadband cable access market, Digital Subscriber Line (DSL) companies have declared the high-profile union and surrounding publicity a victory for DSL as well.

Among enterprises looking to outfit remote workers, DSL has been largely favored over cable modems, and the AOL-Time Warner move is unlikely to change that, many industry watchers agreed. Time-Warner owns cable systems.

Along with the boost in visibility it received from the merger, DSL also gained some momentum last week with two other developments.

First, Covad Communications, a leading DSL provider, for the first time offered DSL service via a shared voice line owned by a local phone company. The Federal Communications Commission in November had ordered local service providers to share their lines with smaller competitors such as Covad.

DSL standards also took a step forward when the DSL Forum announced that 12 vendors -- including Lucent Technologies, Intel, Nortel Networks, and Motorola -- had worked together on the interoperability of DSL equipment based on the G.lite standard.

G.lite is a protocol that allows DSL modems to robustly connect with a single piece of equipment in a phone company's central office, eliminating the need for a "truck roll" to install DSL service in the home.

The number of cable modems in play at the end of 1999 outpaced DSL, mostly because cable access is cheaper. But DSL -- registering 100 percent growth nearly every quarter -- is gaining market share swiftly.

And in the corporate setting, DSL is heavily favoured -- not so much because of security issues associated with cable but because of cable's stigma as an entertainment medium, according to "Broadband Bob," president of Gecko Research and Publishing, which tracks the advanced telecommunciations market. Broadband Bob declined to give his formal name.

"When it comes to something as serious as moving data around, corporations are not going to be as comfortable with cable companies as they are [with] phone companies," Broadband Bob said.

However, many of the same networking companies participating in the DSL Forum's G.lite interoperability tests have lately churned out cable products, which build firewalls and other safeguards into cable connectivity.

But analysts, such as Telechoice's Laurie Falconer, concluded that DSL remains the better choice for business because it enables virtual private connections.

AOL, prior to the merger, had been lobbying for government intervention to break exclusive deals between cable operators and ISPs. But the company now is leaning toward letting market forces decide.

G.lite DSL facts

* It is a version of asynchronous or Asymmetrical Digital Subscriber Line that accesses the Internet 30 times faster than a 56Kbps modem.

* It contains a "splitter" signal that separates voice and data.

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More about America OnlineAOLCovad CommunicationsFederal Communications CommissionIntelLucentLucent TechnologiesMotorolaNortel NetworksTeleChoiceTime Warner

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