Technology Giants Unite to Control High-Speed Internet Access

At a meeting in San Francisco, representatives from Compaq, Intel, and Microsoft warned local telephone companies that unless they joined their new consortium, they would be left behind in the high-speed Internet revolution. The technology giants' aim was to control access to the Internet by standardizing digital subscriber line technology, a faster alternative to cable modems. Most local telephone companies signed on, with Bell Atlantic expected to join soon.

Key Takeaways:

• Compaq, Intel, and Microsoft formed a consortium to control high-speed Internet access through digital subscriber line technology.
• The technology giants aim to standardize digital subscriber line technology to compete with cable modems and gain leverage over future markets.
• Local telephone companies, including Bell Atlantic, were coerced into joining the consortium to avoid being left behind in the high-speed Internet revolution.
• The consortium has attracted dozens of technology companies, many of which have joined in the last few weeks.
• The group's standardization of digital subscriber line technology has alleviated concerns among local telephone companies about the costs of upgrading equipment and deploying the technology.
• Compaq, Intel, and Microsoft have promised to take responsibility for most marketing and retail distribution, reducing the burden on local telephone companies.
• Cable television companies had been threatening the dominance of local telephone companies, and the consortium's formation promises to standardize the technology and cooperate with local telephone companies.
• U.S. West was an early adopter of subscriber-line technology, having deployed it in the Phoenix area earlier in the year.
• Bell Atlantic is expected to join the consortium soon after making a bet on a rival subscriber-line technology.
• Negotiations over hardware have been more difficult, with companies like Alcatel and Aware Inc. playing key roles in the consortium.
• The consortium has delayed its announcement to allow for the resolution of patent disputes and disagreements among its members.

Statistics:

• Only 100,000 households, less than 1% of Internet users, are connected to cable modems.
• A few thousand households are connected to digital subscriber lines, the technology whose development the consortium wants to shape and accelerate.
• The remainder of connected households (15 million) are connected through phone lines, averaging speeds of 28,800 bits per second.
• Digital subscriber line technology could allow consumers to link to the Internet up to 30 times faster than current speeds.
• The new technology promises speeds of up to 1,500 kbps, matching that of cable modems.

Sources:

• Meeting in San Francisco between Compaq, Intel, Microsoft, and local telephone companies.
• Speeches at the Networld conference in Atlanta.
• Executives from Compaq, Intel, and Microsoft.
• U.S. West.
• Bell Atlantic.
• Lucent Technologies Inc.
• Alcatel.
• Aware Inc.
• Yankee Group.