Pipe Dreams

By Cassimir Medford
Original Post on ZDNet
January 22, 2001

David Baylor is exactly the kind of customer broadband Internet service providers strive to attract. The 32-year-old computer consultant, who works out of his home in Waukesha, Wisconsin, knows what he wants from a Web experience, and he's certain that it isn't what he had before. So about a year ago, Baylor dropped his dial-up Internet service provider (ISP) in favor of the relatively new digital subscriber line (DSL) service offered by Seattle-based Speakeasy.

"I switched to DSL primarily to have an always-on connection," says Baylor.

Justifying the cost was easy. "I pay about $50 a month for DSL. With a dial-up account I was paying $20 for the ISP, plus $12 for the extra phone line."

Such simple logic is echoed by many these days. The buzz surrounding high-speed Internet services -- primarily DSL, from phone companies and regional start-ups such as Speakeasy, and competing cable-modem service offered by cable TV carriers -- has reached a fever pitch.

Everyone Wants It
The reasons are obvious. Broadband Internet service in many cases is "always-on," meaning you don't have to dial in to your ISP's server and wait for a connection (and potentially not get one during peak times). Just launch your browser and you're there.

But the real allure for many is the speed. Cable and DSL connections generally deliver an average minimum of around 150 Kbps (kilobits per second) and an average max of around 1 Mbps for cable and 2 Mbps for DSL, versus the theoretical maximum of 53.3 Kbps for dial-up Internet service. The extra speed not only makes Web page download seemingly instantly (a huge benefit in itself), but it also enables subscribers to use the Web for things that are impractical over a regular phone connection: streaming audio and video, virtual private networks (VPNs), extranets, and more. Broadband's fat pipe also makes it practical for a small business or home users to share a single connection and ISP account among several PCs -- a prospect that would bring a dial-up connection to its knees.

The number of high-speed lines connecting homes and small businesses in the U.S. to the Net reached 4.3 million in the first half of 2000, according to the Federal Communications Commission. Even so, that accounts for only 3 percent of the nation's total homes and businesses.

Not Everyone Can Get It
While a majority of people would switch to broadband service tomorrow given the chance, the unhappy truth is that most U.S. homes and businesses don't have that choice. Though about two-thirds of American households have access to cable television services, only about one-third of those are served by the two-way cable needed to deliver high-speed Internet services, according to Zona Research of Redwood City, California.

What's the holdup? Simply put, DSL and cable-modem service suppliers need time and money to upgrade the infrastructure as required by broadband.

The copper loops that connect most American households to local telephone central office (CO) switches were not designed for data traffic, particularly high-speed data traffic. Many of these copper wires require upgrading before DSL suppliers can begin force-feeding high-speed data to their customers. Some of these loops have been unused for 50 years, and others are equipped with electronics designed for efficient voice communications. But the electronics that enhance voice communications are murder on data transmission (microfilters installed to eliminate noise or hiss on voice lines disrupt frequencies used for data).

Cable service providers are also having a difficult time. The cable infrastructure was designed for one-way television programming communications -- that is, from the programmers to the consumer. Internet communications require two-way service.

"We are working as fast as we can, but we aren't completely there yet," says Steve Gorman, director of marketing for residential data services at Cox Communications, an Atlanta-based cable television and broadband supplier that serves 6 million customers in 23 states nationwide. "By the end of the year we will be upgraded to 70 percent two-way-capable," he says.

For those not inclined to wait -- and for those in rural areas that may never get wired broadband service there are alternatives. Hughes and StarBand each provide high-speed Internet access via satellite, and more competitors are joining them. There's also WLL (wireless local loop) service delivered by a range of local competitors. With WLL, a provider blankets an area with transceivers that pass the data signals via radio waves to a small antenna at each customer site.