HDSL2 could mean cheaper T-1s for you

VIENNA, VA. - Heads up: HDSL2 is coming and may well save you money . . . after a bit of work.

HDSL2 (high-bit-rate digital subscriber line, two-wire) is another way to provision a T-1 line, only this technology relies on fewer wires - two instead of four - and therefore costs less to set up.

Digital subscriber line (DSL) specialist Rhythms NetConnections claims it will use the technology to support T-1 services that will cost 40% less than typical T-1 offerings. The carrier is looking to exploit the dramatically lower cost of HDSL2 to undercut T-1 prices of established local carriers such as the regional Bell operating companies.

Eye-popping discounts like this and faster provisioning times than the major carriers offer now for T-1s will attract corporate customers, says Brad Peterson, senior vice president for retail technology at Charles Schwab.

However, RBOCs that charge higher prices for a huge base of already installed T-1s may be less likely to embrace HDSL2 and pass along related cost savings to customers.

"They are still going to want to sell it as a T-1 and get T-1 prices," says Claudia Bacco, an analyst with TeleChoice, a consultancy in Boston.

HDSL2 uses just a regular, two-wire phone line - the kind that's already likely to be strung to customer sites. So the carrier would probably not have to run new wires to offer an HDSL2-based service, according to Dal Veeneman, a senior technologist with GTE Labs in Waltham, Mass.

Bacco notes that the price of T-1s ranges from hundreds of dollars per month to thousands, indicating there's a big profit margin already. "How is it possible for prices to vary that much unless some of the providers have huge margins and some of them don't? There is room to be an inexpensive T-1 provider if you want to be," Bacco says.

So when established carriers start using HDSL2 to support T-1 services, customers may have to argue for lower prices that take advantage of the carriers' lower costs.

While the standard for HDSL2 is just being finished, Rhythms plans to test fresh HDSL2 gear and put it online in the first quarter of 2000. RBOCs have less aggressive plans. Bell Atlantic, for example, says it will test HDSL2 gear later this year but won't roll out a service until the second half of next year. Pricing has not been announced.

Vendors cranked up the hype machine last week at the DSLCon show in Vienna, Va., to elevate HDSL2 technology above the crowded field of high-speed DSL technologies.

Upstart carrier Allegiance Telecom says it is already field testing HDSL2 gear from Adtran in Chicago with an eye toward gauging exactly what services HDSL2 might support. It had no HDSL2-based services to announce.

Adtran projects that carriers next year will buy enough hardware to provision 500,000 new T-1 lines, and between 20% and 25% of that will be HDSL2 gear.

Vendors ranging from chip makers to manufacturers of HDSL2 customer-site modems promised at DSLCon to work at University of New Hampshire test labs to make their gear compatible. 3Com, Alcatel, FlowPoint, Level One Communications, Netopia and Nortel Networks all endorsed HDSL2 and committed to compatibility testing.

Bacco says the interoperability announcement is an attempt to jump-start carrier interest in HDSL2. Carriers are wary of gear that isn't interoperable because it would leave them at the mercy of one vendor's prices and supply chain.

Also at DSLCon, voice-over-DSL continued to generate news. Network Plus announced it will use AccessLAN Communications and Jetstream Communications gear to support voice-over-DSL services in its coverage area in the Northeast. Prices were unavailable.

AccessLAN also announced the release of a quality-of-service feature for its PacketLoop gear. Called Priority-Q, the feature set supports up to four levels of priority to handle different traffic streams such as voice, fax and data. i