Paradyne DSL is a winner

Every month, we at Current Analysis select the vendor event or announcement with the most long-term significance for our RadioActive Award.

Past RadioActive winners have included the AOL/WorldCom/CompuServe deal this past September, Microsoft's $1 billion investment in Comcast in June, and Intel's price war with 3Com for 10/100 adapters in early 1997.

Hotwire MVL overview From Paradyne.

This month, we focused on the recently concluded ComNet '98 - the industry's second major show (right behind NetWorld + Interop). Our choice? Paradyne Corp.'s Hotwire Multiple Virtual Lines (MVL) announcement.

First, the digital subscriber line (DSL) access market is incredibly hot overall. (The three big technologies at the show were DSL, voice over frame/IP, and Gigabit Switch/Routers). And with wide-scale carrier deployment of DSL technologies set to begin this summer, it looks to continue that trend.

Second, Intel Corp., Compaq Computer Corp. and Microsoft Corp. (along with a group of regional Bell operating companies) last week announced the formation of the Universal Asymmetric DSL Working Group. The goal of this group is to define a true standard for DSL services that improves Internet access speeds to both business and residential customers (faster Internet speeds mean more bandwidth for interactive and multimedia applications, which will lead to increased demand for improved microprocessor, computer and operating system support).

However, US WEST last week said it will initially begin deploying MVL, in addition to the new working group's standard when it becomes available.

Third, Paradyne, along with some integrated circuit help from its technology friends at the Burr-Brown Corp., has built a really nice product: 768K bit/sec of bandwidth, shared among up to eight Ethernet devices (computers, servers, printers, voice-over-IP terminals), over existing POTS wiring within the house and into the telco point of presence (up to 30,000 feet).

With a price target of below $300 by year-end, this is a product any telco could deploy on a massive scale - and then bundle the cost into an affordable monthly service charge.

One of the reasons for the device's low cost is its ease of installation - comparable to that of an answering machine (easier, actually, since you don't have to record a pesky message to get the thing working). That's right - the user can install it himself; no service call needed.

True, this system is as proprietary as they get. While it plugs into Paradyne's existing DSLAM equipment, it is still a single-source product in a world where "multivendor" and "standard" are considered holy grail material. But still, it is likely to do well, especially with a distribution deal through Bay Networks and carrier service plans through the likes of US WEST.

If nothing else, MVL puts some real heat on the other vendors to further improve the cost/performance ratios of their own soon-to-be-announced DSL offerings.

And that is why this is our choice for the RadioActive Award for ComNet. For more information on the market impact of this announcement, and our analysis of this particular event, check out our RadioActive Awards and Public Analysis sections of our Web site at www.currentanalysis.com.