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Broadband: Beyond DSL and cable

PC World
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By Tom Spring

(IDG) -- DSL and cable modems still too slow for you? Fiber-optic technology could be the answer, offering super-high-speed Internet access and easily variable bandwidth at a fraction of the cost of service on traditional copper lines. Once affordable and attainable only by large enterprises, fiber-optic technology is beginning to attract small businesses and even a handful of consumers. But some major financial and technical roadblocks remain.

Companies such as InSors, an 18-employee videoconferencing firm in Illinois, are discovering that fiber-optic connections make an economical alternative to T1 and T3 Internet lines. InSors pays a $1000 monthly fee to Cogent Communications for network speeds of 100 megabits per second. By comparison, a T1 line with just 1.5 mbps of bandwidth can cost $600 to $1500 a month. And upgrading a T1 to a fractional T3 can take a month, with the resulting 3-mbps service costing $2000 a month or more.

"We've got an enterprise-class network at a small-business price," says Brian Gleason, InSors vice president of business development.

John Holland is director of business development at NxTier Technologies, a logistics management firm for the trucking industry in Worcester, Massachusetts. His company gets fast 10-mbps access for $4000 a month. Better still, on 3 hours' notice, NxTier can up its bandwidth tenfold without having to pay its provider, Yipes Communications, for additional line installations. "Our network can grow as fast as we need it," Holland says.

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Unlike current high-speed broadband technology that transmits data over copper and coaxial cable lines, fiber-optic technology can easily handle massive data traffic, along with voice and video, on a single hair-thin line composed of glass.

And prices for fiber-optic access have fallen, thanks to advances in the technology and to a glut of capacity born of a 1990s construction boom. During that decade, firms like Level 3 and Quest Communications spent billions of dollars in a race to build cross-country fiber optic networks in advance of demand. Burdened with debt, these and other firms went from Wall Street's darlings to dogs.

Meanwhile, a number of relatively small and nimble companies -- including Cogent, Telseon, and Yipes -- have begun to find customers for "gigabit ethernet" services. These newcomers focus on building hookups from underground cables to their customers (which are mostly small and medium-size businesses) in the United States' 20 largest metropolitan areas.

Even so, mass adoption of fiber-optic broadband is by no means imminent.

One complication: Building a network's "last mile" -- the line that branches to a single customer -- is costly, says analyst Sterling Perrin of market research firm IDC.

Today in the United States, copper telephone line touches about 200 million businesses and homes, while fiber reaches only about 40,000 businesses and far fewer residences, says Dave Schaeffer, Cogent's chief executive officer.

Still, some lucky folks are already getting a taste of fiber-optic life. SBC Communications is serving 150 businesses in Texas with fiber-optic lines. It expects to serve about 6000 more with fiber optics by the end of next year, at speeds of 1.5 mbps and up.

That is speed to burn.





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