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Re: Microsoft offering xDSL access
From: Dave Siegel <dave () rtd net>
Date: Fri, 23 Jan 1998 12:36:37 -0700 (MST)

connections, doesn't go through the phone switch.  Whoever handles
that IP traffic needs a router or something similar next to the phone
switch to connect to those DSL pairs.  Do the Bells plan to hand all
the traffic to their oh-so-independent ISP subsidiaries?  Will it be
gold rush time as every ISP in the country scrambles to get colo space
for a router in every central office in the territory they want to
serve?  Do the Bells plan to sell MAN connections between telco-run
routers at the phone office and the ISPs?  Who knows?

Allow me to shed some light on how great this could be for everyone,
as well as share some insights as to the problems they are currently having.

First of all, there are two different kinds of xDSL service one can buy.
One is a subscriber side, and the other side is a server side (which US West
calls MegaSubscriber/MegaOffice/MegaBusiness and MegaCentral respectively).

My guess is that they're using an ATM based network to bring the subscriber
line into a packet switched medium, pointing the traffic through the network
by way of a PVC, and into the MegaCentral device which has the opposite 
asymetrical characteristics of a subscriber line.  In this fashion, any ISP
can buy a port, plug it into an ethernet, and provide service.  And the
pricing isn't bad, either.  $400/month for a 1.5Mbps outbound connection.
Subscriber side is great, too.  $40/month for the 192Kbps...  Do the math,
you dialup providers, and see how much money it saves you over dialup modem
banks.  The cost savings are enough to put in more bandwidth, and still have
a higher profit margin than before.

As for what US West tends to do with the bandwidth, they have an unregulated
division called !nteract that will take care of that part.  It is
my understanding that !nteract will advertise directly following US West
commercials, but US West must still give you the choice of your IP provider
when you order it from them.  Here's the kicker...!nteracts price is just
$20/month.

Since you 
a) can't colocate gear in a US West CO
b) can't get the raw copper from US West, and in some states, not even if
   you are a CLEC (like arizona, thanks to our lovely state congress)
c) can't cost justify it even if you could do above
you may as well buy their service.

Economics:

It's good for the ISP...it lowers their costs to deliver consumer 
access services...great dialup replacement.  It may adversely effect the
ISPs high speed products, as those business that previously would have bought
that 56k frame relay line may choose DSL instead.  I believe that there will
still be a market for the higher quality higher cost line, though.

It's good for the phone company.  Imagine how much they will save over the
next 5 years (if deployment is high) because it will free up tons of
congestion on the phone network, and they won't have to upgrade it for
quite some time.

It's good for !nteract...they are just an ISP

It's good for customers.  There are a lot of benefits to having a dedicated
connection...no more "NO CARRIER", no more "FAST BUSIES" (or slow ones), no
more MS DUP hassles.  This is regardless of any speed improvement they  
might see, so even if you heavily aggregate, there is still a lot of new
value for them.

Problems:

Intelligence that I have suggests that in phx, USW's beta area, only 
20% of those that have asked for DSL service have loop qualified for it.

Oops...

I also hear rumblings that the current pricing is considered "promotional"
and may change soon.

Dave

-- 
Dave Siegel                             dave () rtd net
Network Engineer                        dave () pager rtd com (alpha pager)
                                        (520)579-0450 (home office)
                                        http://www.rtd.com/~dsiegel/


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