Who You Gonna Call for Broadband? - Technology Information

EXPLAINER: Talk high-speed Internet access and most people think cable and DSL. But at home and at work, there are other options.

CABLE

More than 90 percent of cable operators nationwide offer Net access, up from 32 percent in late 1999. And cable is the top broadband choice for home users today. AOL Time Warner, for example, added 400,000 new broadband customers in the first quarter, for a total of 2.1 million; the company's Road Runner service adds 1.2 million. Upstart Charter Communications (partly owned by Paul Allen) has seen its stock rise more than 30 percent since last year. The only bad news: Excite@Home, the country's top cable provider, has been laying off workers (800 in January, with more rumored soon), and its stock has plunged more than 80 percent in the past year.

SATELLITE

The number of U.S. satellite subscribers will grow from less than 200,000 today to more than 4 million by 2005, according to the Strategis Group. The reason: Satellite dishes can deliver service to places -- particularly rural areas - that cable and DSL lines can't reach, and still offer download speeds up to 400Kbps (uploads poke along at dialup speeds) at competitive prices ($30 to $50 a month). By acquiring a controlling interest in Hughes Network Systems, Rupert Murdoch has become one of the key players in the satellite broadband market.

DSL

The DSL market is in transition, thanks to a surplus of vendors, lower-than-expected demand and dangerously thin profit margins. Independent service providers are hurting financially - Northpoint, for example, recently filed for Chapter 11 protection - leaving the market to the big telcos. Meanwhile, rates for home DSL service (which typically downloads data at 128Kbps to 384Kbps) from major telcos and bigname ISPs are rising. In February, for instance, SBC raised its monthly rate from $40 to $50. But the pain could be short-lived: DSL is expected to surpass cable by 2005 as the broadband favorite for home users.

FIXED WIRELESS

Fixed wireless subscribers transmit their data to the Net -- at speeds up to 2Mbps -- from a transmitter on the roof. But it's talking to a nearby receiver, not a bird in the sky. AT&T, MCI and Sprint are among those that have rolled out fixed wireless services or announced such plans. With good reason: A report by CSFB Research notes that while only 3 percent of U.S. commercial buildings have a fiber connection, almost anybody in a market served by fixed wireless can put a transceiver upstairs.

DSL

DSL is relatively cheap, and corporate customers have faster options than home users (SDSL lines, for example, download and upload data at 768Kbps). But DSL may not be reliable enough for business use. Three separate vendors - the local telco, a carrier and an ISP -- could be involved in supplying a single line, making it hard to know who to call when the line goes down. And the lack of service-level agreements means that if your carrier goes AWOL, so could your Net connection.

T1/T3

Before DSL, T1 and T3 lines were the standard high-speed data lines for businesses. They had the advantage of being leased, with telco service-level agreements guaranteeing availability and speed (1.5Mbps for T1, 44Mbps for T3). Of course, reliability and speed come at a cost: Monthly charges for a T1 line from Pacific Bell currently run in the neighborhood of $600 per month (plus a one-time $800 expense for the hardware).

SATELLITE

Next time you stop for gas, look at the station's roof. Chances are you'll see a satellite dish, which is used to beam your credit card information from the pump to the bank. For that, you can probably thank the same Hughes Network Systems configuration that's behind DirecPC. Hughes is taking aim at business users, touting easy installation (you don't have to wait for the phone company to roll a truck or flip a switch), availability in remote areas and data speeds of up to 45Mbps.

GIGABIT ETHERNET

The latest buzz in high-speed Net access for businesses, gigabit Ethernet connects your existing office network directly to a fiber-optic line outside the office at a blazing 1Gbps. Because Ethernet has been around for years, the hardware (from familiar names like Cisco) is relatively cheap, and network admins know how to deal with it. That combination of speed, low price and usability explains why startups like Telseon and Yipes have been pulling in big VC investment ($100 million and $61 million, respectively) despite this year's chilly financing market.

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