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May 1999

xDSL. Cable. Broadband Wireless: As the battle for consumer broadband access heats up, which technology do you see as the frontrunner and why?

We asked several industry-leading vendors for their views on the Internet telephony industry. Their responses appear below.

Any of the three technologies can deliver on the promise of increased bandwidth to the consumer. The challenge for broadband data is as much an issue of network infrastructure design as it is an access link technology issue. Cable is currently the frontrunner because it can spread its transmission plant capital expenses across multiple services (digital video, data, telephony), and because it has already begun deployment at a viable price point for the consumer market. Economies of scale for cable modems are already being realized through volume manufacture by multiple vendors to a common DOCSIS standard. Today, DSL technologies suffer from too many standards and a lower number of homes already passed by upgraded plant. The proposed G.lite DSL standard will help, but it is 2 years behind the DOCSIS standard created in early 1997. In addition, DSL pricing has to consider cannibalization of existing telephony service offerings. Wireless technologies have not yet reached the maturity needed to realize economies of scale. If cable can execute its broadband data rollout well, it can establish a self-sustaining leadership in its installed base that will be difficult to overcome.

- Buddy Snow, Sr. Director, Product Management, General Instrument Corp., SURFboard Cable Modems

In my view, operators offering broadband access are best served with a hybrid fiber/coax (HFC) solution than with competing choices such as xDSL and broadband wireless. xDSL is a point-to-point connection, requiring a modem on each end of the line. While this is practical for a dedicated link, it is a costly network solution for multiple connections requiring a modem per subscriber in the headend. In contrast, an HFC solution takes advantage of modern digital multiplexing techniques and TCP/IP protocols to minimize the amount of equipment per subscriber required in the headend.

In addition, it is estimated that only 30 percent of today's copper plant can support xDSL, requiring a significant up-front capital expenditure for plant upgrades. In total, xDSL solutions are capital intensive when compared to other broadband technologies.

Wireless also possesses significant technological challenges for operators, not only because of line of sight issues, but also because of unexpected interference inherent with rain fade and foliage-generated seasonal variations. And, wireless has not proven to be cost-effective in high-density applications.

Hybrid fiber/coax is a cost-effective, reliable broadband solution leveraging an existing and ubiquitous facilities-based infrastructure to allow operators to incrementally generate added revenues by offering bundled cable TV, high-speed Internet access, and premium-quality telephone service to their subscribers. In fact, the prospects to gracefully merge voice, video, and data onto a single platform inherent in an HFC IP scenario offers the prospect of ultimately changing the landscape with respect to how these services are delivered.

- Jim Lakin, Vice President, Arris Interactive

Although most of the hype these days would lead users to believe that some flavor of wired DSL or cable modems will be the answer to users' demands for high-speed access, the only real ubiquitous high-speed access to both homes and businesses will come from wireless solutions.

A wireless solution using MMDS frequencies is not dependent on a wired infrastructure and thus, can be deployed easily to both residential and business customers across a 70-mile coverage zone by putting up a single radio wave transmitter. Competing technologies such as DSL and cable modems will take years and billions of dollars to yield the same potential coverage areas because they will have to tear up the streets and recondition hundreds of thousands of miles of outdated cable plant.

To make things worse, the RBOCs seem to be stalling their rollout of DSL due to fears of cannibalizing their existing T1 business as well as stifling competitors who are trying very hard to deploy DSL solutions using leased local loops.

Cable modems are making better progress, but they still place users in a bridged or shared network environment where everyone on a network has the ability to sniff packets destined for their neighbor's PC. Security will become more and more important as e-commerce grows. A shared environment also means that as more and more people install cable modems, the available bandwidth will shrink and users could quickly be reduced to speeds comparable to dialup 56K modems. Sad, but true.

As pointed out in earlier, high-speed wireless access is a much more flexible technology to deploy and also provides a much more secure environment to compute in due to the fact that every wireless modem has its own static Internet Protocol (IP) address.

Being first to market with high-speed access data/Internet service for both business and residential customers will be a major factor in who wins market share in the local access market. Regardless of what the cable companies or the RBOCs are saying, wireless has a major speed-to-market advantage over any wired solution.

There are many classic examples driving broadband such as telemedicine, CAD/CAM, and telecommuting. Instead of focusing on existing on these high-bandwidth applications, it might be more interesting to consider the new era of products and services that would arise if 1.5 Mbps connections were available to everyone.

- Matt Oristano, CEO, SpeedChoice

The broadband turf wars are only beginning. Cable modems have the early lead and, I believe, will continue to dominate the consumer market because the technology is easy to use and, most importantly, is inexpensive. Residential users are very cost sensitive and the $30-$40 monthly cost is all the average Web surfer is willing to pay (if that). In addition, the costs involved for CLECs to penetrate the consumer market with DSL are prohibitive for most to gain significant market share, as well as the RBOCs being slow in rolling DSL services out. Those factors are joined by the fact that cable companies are the obvious winners in bringing video to the home, and are leveraging that existing data pipe to include Internet access.

With that said, however, the larger market for broadband services is with business customers and, in this market, DSL will dominate. The primary reason is security but the technology also provides business customers with value-added enhanced services, including virtual private networks. In-building, multi-tenant unit, and campus applications will further expand the business customer market for DSL and also eliminate the most pressing major problem for DSL service providers - distance limitations.

- Chris Whalen, Vice President of Sales and Marketing, Interspeed, Inc.

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