Broadband boom gathers speed

ADSL leader sees one third of Internet population wired to broadband in two years - but UK still lags

Broadband is on its way, with experts predicting that a third of the online population will be connected for high-speed access in just two years' time -- although Britain is still lagging in the broadband race.

"We do not find it aggressive to say that in two years 30 percent of Internet users worldwide will be broadband," said Martin De Prycker, chief technology officer for Alcatel, which claims to control the majority of the market for ADSL modems. ADSL (Asynchronous Digital Subscriber Line) is expected to be the most successful broadband technology, with cable modems coming second.

De Prycker spoke at an industry briefing in London Monday.

Broadband is important because it is always connected and is paid for on a flat rate basis, which means homes with a broadband connection tend to double or triple their Internet use, according to Alcatel. De Prycker said the UK is lagging behind the US and some European countries in introducing broadband, partly because there is relatively little competition here for BT. But BT will begin allowing competing telcos access to its copper wires for the first time this year, and technological advances mean British ADSL users may not have to face some of the technology's worst hurdles.

For example, SBC, the telco handling about a third of the US population including Silicon Valley, initially required ADSL subscribers to install complex equipment in their homes, such as splitters, which required a technician to install. Newer ADSL devices are now self-installing, and have fallen in price to below $200 (about £136).

These may seem like low-level improvements but they have held back ADSL so far, according to Alcatel. "We have to make sure that when you plug that box in, your other phones still work," said Peter Radley, chairman of Alcatel UK.

After offering ADSL for several years, SBC has only in the past year reached the point of adding more than 1,000 new subscribers a day. The telco has about 750,000 users now and plans to have 900,000 by the end of the year.

Alcatel does not believe flat rate, or unmetered, Internet calls will steal the market away from ADSL, as some observers have suggested. "The more we introduce unmetered, the more it expands the total number of users," said Radley. "A lot of people who go to ADSL are going to be existing users who see the advantages ADSL can bring."

Broadband will intensify the digital divide, especially in rural areas, since ADSL and cable modem technologies will be rolled out first in areas where telcos can make the most profits, Radley admits. "There will not be full competition everywhere. It will be based on profitability, just as usual," he said.

The problem is not as serious as in the US, with its vast, sparsely-populated rural areas, but Radley said it might still be necessary to introduce a UK government-sponsored programme to bring broadband to rural areas, similar to the government initiatives that funded the process of bringing the telephone network to rural areas early last century.

Another answer -- especially appealing to science-fiction fans -- could be ADSL via satellite. Some satellite broadband systems already offer high-speed connectivity even in remote locations, such as DirecTV's DirecPC system and the Globalstar network, but none have so far lived up to the promise.

For one thing, existing systems still rely on a telephone connection for sending data from the PC, limiting where they can be used. Alcatel is putting its own system in place in 2002, called SkyBridge, which will transfer data in both directions via a small satellite dish.

Services will be available from 2003, but SkyBridge will have to contend with the bad reputation engendered by the spectacular failure of Iridium, another satellite-based communications network. Iridium promised to be a "network in the sky", but turned out to be more of an orbiting white elephant, as the expensive system failed to get many subscribers and finally filed for bankruptcy soon after launch.

Alcatel promises SkyBridge has learned from the mistakes of Iridium, with a less-expensive system and a more sensible business model. Radley estimates SkyBridge can only handle a maximum of 25 million subscribers, but says it is, after all, serving a niche market. "We think that is quite reasonable for delivering ADSL-level service to a camp in the Sudan, or to your croft in the Outer Hebrides," he said.

See ZDII for US tech investor news.

Most of the time getting ADSL installed is not a technology test; it's a bureaucracy test. The more Guy Kewney discovered about it, the more his hair stood on end! If you're trying to get a domestic link, using Universal Serial Bus, or a business line from an outside ISP, or non-NAT services, then frankly, Guy thinks -- BT's apology isn't near good enough. Go to AnchorDesk UK for the news comment.

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