MSN said it is testing digital subscriber line (DSL) access to the Internet in Atlanta and Seattle, and will begin tests soon in Chicago and San Diego. Microsoft (Nasdaq:MSFT) plans to offer the service, called MSN Internet Access DSL, in at least 20 major cities by this fall.
DSL, offered mainly through regional Bell operating companies (RBOCs) such as Pacific Bell and Bell Atlantic, and cable-modems, offered through cable television companies, are the two main consumer options for high-speed Internet access.
"It's important for us to continue offering the services that our customers are looking for, and broadband access is high on the list for some of our more skilled users," said Will Diefenbach, group product manager at MSN's Internet Access group. "The experience of the Internet is incredibly different in a broadband scenario."
Microsoft said UUNet, a national backbone provider, will be handling the DSL infrastructure.
Earlier this month Microsoft made a $30 million investment in Rhythms NetConnections, a competitive telephone company that sells DSL access to corporate customers.
The software giant's entry into the high-speed access business could benefit consumers in two ways, by increasing competition in the market for broadband consumer services, and between the telcos and the cable companies.
America Online Inc. has so far taken the lead among mainstream online services in pursuing broadband. The company began DSL trials with GTE Internetworking in April of last year, and this year has forged DSL partnerships with SBC Communications (which includes Southwestern Bell and Pacific Bell) and Bell Atlantic.
"This deal just shows that DSL is moving more and more into the mainstream," said Rob Enderle, an analyst at Giga Information Group.
DSL so far has lagged behind cable-modem access in consumer adoption, but more aggressive marketing and rollouts by telcos (notably SBC's ambitious rollout schedule, announced early this year ) have begun to narrow the gap.
Giga predicts that, despite cable's sizeable lead, DSL will surpass the rival technology in usage within 18 months.
"The reason is that with cable modems, at least in some implementations, users are complaining about poor performance," said analyst Enderle. "As more people in their neighborhood get on the system, they're finding it drops close to modem speeds."
Broadband services not only speed up home Net access, but are "always on" -- in other words, you don't have to dial up a connection. Experts say the "always-on" feature tends to turn the Internet into a constantly-used resource, rather than something that's occasionally dipped into.
Cable modems use two-way coaxial cables, the same ones that provide cable television, while DSL works over standard phone lines.