DSL IN A CRUCIBLE.

• Author: FONTANA, JOHN
• Position: Statistical Data Included

WHOLESALERS STRUGGLE, BUT DON'T RING THE DEATH KNELL YET

DIGITAL SUBSCRIBER LINE SERVICE, ONCE touted as the golden freeway for high-speed, inexpensive computer network connections for business users, is starting to hit a stretch that resembles 20 miles of bad road. DSL is delivering the promised speed, but with plenty of caveats. A lethal shakeout is burying major DSL providers and leaving customers with dead lines. And the service is plagued by limited coverage areas and a tiered delivery system that can produce more finger-pointing than problem-solving.

Still, analysts' projections for DSL growth remain sky high.

Some think DSL will be energized by long-sought equipment standards and value-added services, such as voice-over-DSL, which allows a single DSL line to carry multiple voice conversations. If that happens, the technology could become a de facto standard in the broadband market.

Why DSL rather than cable, satellite or wireless?

Aside from sheer speed and low costs, DSL works over ordinary copper telephone lines, requiring no additional wiring or satellite dishes. Once connected, it is always on, so no waiting for a modem. And some DSL variants carry a data line and a voice line, thus allowing the receipt of phone calls while on the Web or exchanging e-mail.

Connection speeds typically range from 1.5 megabits per second to 512 kilobits per second downstream (Internet to PC) and around 128K bps upstream (PC to Internet). Business-class DSL is symmetrical, with the same speed in both directions. That compares with 56K bps for the best dial-up modem on the same copper phone lines and 1.5M bps for a Tl line, a reliable but expensive dedicated digital telephone circuit. Tl costs average about $800 per month, but can be as much as $1,200. Monthly DSL pricing varies from $30 to $300.

There are other options, though. Cable is one, but has been more popular for residential customers because so many office buildings aren't wired for it. Wireless and satellite have limits, and aren't yet as developed as DSL. ISDN (integrated services digital networks) is an older, slower, and more expensive copper-wire technology, and it and requires more infrastructure than DSL. It was once considered to have the potential that people now ascribe to DSL, but never lived up to it.

MARKET SHAKEOUT

There were 2.4 million DSL subscribers in the U.S. last year, a jump of 366 percent from 1999. Only 29 percent of them were businesses, according to TeleChoice Inc., a research firm with offices in Colorado, Oklahoma and Texas. Subscriptions are expected to increase to more than 17 million in the...