Telephony revolution on line two

I have heard the future, and it is speaking to me over a DSL line.

It’s all starting again, the excited buzz over the possibility that next generation DSL modems could come equipped with a phone jack that would connect to more than one phone line. Using asynchronous transfer mode adaptation layer number 2, or AAL-2, the technology could potentially allow organizations to make much better use of the broadband available to them while gaining T1 capabilities at much lower costs. Could this be convergence?

A lot of people thought we should have made more progress on voice-over-DSL (VoDSL) by now. Around this time last year, research firm TeleChoice predicted that 100,000 lines would be used for this purpose by the end of this year, and projected 1.75 million by 2004. That’s a pretty inflated forecast which clearly didn’t anticipate the financial challenges which have killed of so many CLECs, including Axxent, Cannect and most recently Norigen. It’s difficult to innovate when creditors are breaking down the door, and VoDSL seemed to fall off the radar.

There’s some great promise to this technology, and already there are a number of firms jumping on one of the few networking bandwagons that haven’t fallen off the tracks. These include JetStream Technologies and Accelerated Networks, among others. But with so few customers left standing, VoDSL might not get the demand it needs to thrive. While this could be a profitable area for many companies due to the services and competitive advantages it would offer in the local phone market, by no means will it put anyone back in the black, either. Lucent, Nortel, 3Com and Cisco all have the expertise and assets necessary to dominate over the startups, and certainly all four of them are desperately seeking new revenue streams.

In the meantime, there may be some major glitches in VoDSL that would make most customers pause before signing up for the service. There has been grumbling, for example, about latency over backhaul circuits — a pretty important flaw that could impede the ability to redial emergency numbers. Echo cancellation and network management are other possible bottlenecks.

It’s easy to imagine a scenario in which a small business would eagerly opt for VoDSL service for a couple hundred dollars a month compared to the expense of a T1 line, particularly if, as research suggests, many use only 50 per cent of the bandwidth on their phone lines. If the performance doesn’t meet their expectations, however, the technology will look more second-rate than innovative. Many business owners know they get what they pay for, particularly with regard to infrastructure.

Moreover, expectations for phone services are usually so high that some customers will not want to take the gamble. Time and again companies like Mitel Networks and Cisco have pointed out that the 99.999 per cent reliability of the old-fashioned telephone system has kept convergence from becoming a reality. It’s bad enough when the server goes down and you can’t access e-mail; would anyone want to have to switch over to cell phones at their desks as well in the event of a power failure?

Those CLECs which remain in business will demand strict guarantees from vendors before they deliver VoDSL solutions to market. It would be wise to do so. How sad if, once VoDSL hits the mainstream, the extra phone lines are used to log angry phone calls at the help desk. Before we all get caught up in the Next Big Thing, it would be nice to see this roll out right the first time.

sschick@plesman.com

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