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Dangers in the DSL World
shanec writes "As a former NorthPoint subscriber, eagerly awaiting the conversion to Rhythms, this article about the potential of Rhythms, and Covad going down also scares the #$^* out of me!" I think the article is a little inflamatory, but it does underscore a disturbing situation.
Actually, an ADSL line is asymmetric for technology reasons. While it's true that the LEC's don't like the idea of you running high-volume servers, the lower upstream rate is actually a pleasant side effect for them rather than a piece of the design.
You see, when you have big bundles of copper coming back into the CO, there are issues with crosstalk that have to be dealt with due to the density of the bundle, combined with the fact that the upstream signals at that point are fairly weak (since they've already made the trip from your house to the CO). Such crosstalk is easier to avoid at lower line speeds (say, 90 kbps) than it is at higher line speeds (such as 640 kbps). When sending data downstream, crosstalk isn't an issue, because by the time the downstream signals have degraded, they're already at the subscribers' homes and businesses, on individual cables.
ECI Telecom has an excellent presentation on the issues facing ADSL distribution which I highly recommend reading.
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A large part of the problem is the structure that DSL is sold under. The DSL infrastructure CLECs all have to lease their unbundled copper from the ILEC, who is generally also in the DSL business as well and has a financial incentive to make the process as difficult as possible (eliminating the competition). Then the CLEC doesn't (except for Covad's Covad.net) even sell directly to the consumer - all they get to take is a middleman's bite without the retail markup. That retail markup, un turn, is very low because the ILEC is competing with a lower cost basis and driving the price down.
Business-grade DSL (SDSL with speeds of 768K and up) could theoretically be sold at higher margins than consumer-grade DSL, since business DSL is a market the ILEC's are avoiding (they don't want to cannibalize the lucrative T-1 business). This would give the DSL CLECs a chance to make some actual profit per line - but the catch is that they all built out their networks in the pre-2000 funding market and need a higher volume than just small business DSL can readily provide. So they all have been trying to land consumers for the cash flow (though the margins are nonexistent), only to lose money on every one (but they make it up in VOLUME!).
Covad may have a shot at survival just because they'll probably be the last national-scale DSL CLEC standing. A few smaller, regional-scale companies may be able to find niches as well, though it failed miserably for Vitts up here in New England. And through smart business (and/or deep pockets) some ISP's that offer DSL may be able to make a living - Telocity and Speakeasy have a pretty good chance (deep pockets for Telocity, and conservative growth plans at Speakeasy), as do companies like XO that have DSL as a single offering out of many.
There are companies that can make a profit with DSL, but they can't do it by going up against the ILEC. ILECs are on a completely different scale, with comparatively unlimited funds to write off while they crush you.
My own high-speed odyssey began with Flashcom/NorthPoint in mid 1999, and I stayed with them until it was obvious that Flashcom was on the way down (I had pretty good service and the price was decent). I switched to XO (for the deep pockets - Craig McCaw is their sugar daddy), and they provisioned a 768K SDSL line (for a little less than Flashcom was charging for 200K). It was also with NorthPoint, though - the Verizon merger fell through while the install was under way, ironically. I had no problems until NorthPoint went dark last Thursday evening, and XO announced they were getting out of the Home Office business.
So last Friday morning I called AT&T Broadband to see about cable - I live in Salem MA where cable Internet has only been available for about a month. They had a better price, free installation, and could come install this past Monday, which they did. So I simply moved my DNS to Zoneedit (which supports DDNS), and was back on the Net before my inbound mail from the weekend timed out and bounced. AT&T Roadrunner (my service) has no particular restriction on what I do with my line or if I run servers - the only restrictions are that I not run any commercial services with my servers and that I not do anything illegal. No problem. They also block the NetBIOS ports by default, though you can have them unblocked if you really want. And they don't "support" NAT routers, but they don't restrict their use. In fact, when I read the MAC address to the fellow registering my router, he asked me which model router I had and how I liked it (he recognized the vendor ID). He also set up a host mapping for me as well.
What this implies is that ultimately the more "progressive" cable ISP's (like RoadRunner) will get a lot of the business that would otherwise have gone to DSL providers when you have a choice as consumers become more informed (gradually) and home networking becomes more popular. Where there are no choices, you'll have to settle for an @Home-type ISP or whatever the market brings you, which is a pity. Your only other choice will be DSL from the ILEC unless you're a mid-sized business and therefore have SDSL for around $200 and up from a niche CLEC as an option.
Or dialup. Isn't that encouraging?
- -Josh Turiel
-- Josh Turiel
"2. Do not eat iPod Shuffle."
We're in the situation where ILECs are going to underprice CLECs out of the DSL business, and form an actual monopoly (together with poorer performance).
This is thanks to everyone who believes in the concept of "natural monopoly," that lead to ILECs being granted monopoly franchises by local governments to wire up telephones.
If you think the DSL debacle is bad, wait for the other "regulated monopolies" like power and cable...
As someone who was affected by the northpoint fiasco and recently re-signed with another DSL company despite the lower costs of cable solutions, I think I can shed some light on the subject.
DSL is a tremendously important technology because it brings you greater than T1 performance (both download AND upload) at a fraction of the cost of a T1. This scares the sh*t out of incumbant telecoms- They have ZERO reason to spend money buying DSL equipment only so that they can make less money on data services.
Local and national telecoms have, as far as I can see, done everything in their power to prevent DSL technology from taking hold. When independent startup (rhythms, northpoint, covad, etc) companies attempt to go around the stalling telecoms and provide the DSL service that customers demand, their job is made as difficult as possible due the local telco's control of CO's.
At the same time that the incumbant telcos are sabotaging independent efforts to offer DSL service, they are telling their current and potential T1 customers how unreliable and poor DSL solutions are (First hand experience here). It's a brazen display of market power that should give anyone pause. There's a reason why AT&T on one hand declined to smoothly transition Northpoint's business DSL clients, and on the other hand sent out letters to @work businesses offering to "upgrade" them to a T1. AT&T sends the message of their own making loud an clear- DSL is "unstable", buy our expensive T1's like everyone else. It's a total racket.
The only vision that incumbant telcos have for DSL is in a crippled ADSL form. Unsurprisingly, this is very similar to their vision for cable modems.
ADSL, and asymetric cable modems, *by design* turn a generic internet connection into a consumer-only connection. Don't let the marketing fool you- This isn't a feature. Your ability to publish information is strongly and arbitrarily curtailed.
Ever notice how you can pay more money for faster download speeds with cable modems, but your upstream stream is always the same? Haven't you ever wondered why *no* decent upstream bandwidth is advertised by cable companies? Most cable and ADSL providers even go further than this and explicitly forbid "servers" in their terms and conditions. Why is this? Certainly it's not a question of bandwidth, since they are handing bandwidth out left and right (so long as it's downstream).
This effort to "consumerify" as many internet services as possible has far reaching affects besides simply protecting the inflated revenues of T1 sales. It effectively takes away your press. The harder Time Warner makes it for people to self-publish on the internet, the less competition will exist for their own offerings.
I'm not saying that everyone would want to publish information on the internet, or that people who really want to publish on the internet won't be able to, but the "war on upstream bandwidth" does weigh the dice in the favour of media and telco interests.
People don't demand one-way bandwidth- A feature that would truly be in the customer's interest would be a protocol where you could dynamically configure upstream and downstream bandwidth from a fixed pool. I find it highly suspicious that *no* cable company or telco-operated DSL service provides even an option for increased upstream bandwidth. It's certainly not a question of demand.
Anyway, I've ranted long enough on this, and it's just going to be marked flamebait anyway. But I'm voting with my wallet, and I'm giving money to companies who are stepping up and offering SDSL because because I believe that it's important, and I'm not going to sell out to AT&T or Verizon or roadrunner or @home, who are manipulating the low end of the bandwidth market to turn us all into happy little consumers.
-DM
Speakeasy, and other companies like it, like my service provider, Telocity, do not actually provide the DSL service. Speakeasy goes through Covad, Telocity through Rythms. Basically, all the DSL service is provided by only a handful of companies. We had NorthPoint until recently, now there's only Covad and Rythms, not counting the ILECs (Ameritech, Verizon, whatever)...
If Rythms and Covad fold, my only alternative would be to go through Ameritech. Cable modems just started being available in my area, by I don't like the idea of being behind a router with 30 of my closest neighbors.
My journal has hot
When it comes to running servers/services, I called and asked, and after I explained what they were to the lady, she told me they had NO policy regarding anything like that, so go ahead. She may not have had any idea what she was talking about, but she did tell me it was OK
Dude, if she doesn't even know what you're talking about, the likelihood that she actually knows what the policy is in the first place is pretty slim. I checked with MediaONE, Time Warner and ComCast, all have policies against running any sort of server.
The main problem with sharing bandwidth, though, is that everyone in your neighborhood is behind a router with you... There's no security. Services and protocols that are normally not accessible via the Internet because they aren't routeable (Netbios, for one) are available to everyone in your neighborhood. This is particularly a problem if you run Windows and do not use a firewall (90+% of all cablemodem subscribers run Windows and have no firewall)
I've also heard that with some cablemodem services, they put you behind NAT and don't give you a real IP. I don't know which ones do that, or really if they do that, but that's what a guy who used to install for Comcast told me they did.
My journal has hot
"I've also heard that with some cablemodem services, they put you behind NAT and don't give you a real IP. I don't know which ones do that, or really if they do that, but that's what a guy who used to install for Comcast told me they did."
I'm with Adelphia 2-Way Cable, and they do this. Drives me _nuts_. No IP addy, no DNS server numbers, no _nothing_.
OTOH, the service works, and is reasonably speedy. I sure would be willing to drop another couple of bucks if it meant that I could have a static IP, with real DNS numbers to look stuff up against.
Redhawk
I don't know firsthand, so I may be talking out of my ass.. but reading the comp.dcom.*.dsl group up to last year, it seemed the safest bet for DSL service was the telco themselves. As soon as you add more layers of providors, you add more layers of woe: fingerpointing of who drops the ball, who should do what service, etc etc.
I'm currently cable modem, but the area I'm looking to buy a home is rural enough DSL will be my only real hope.* Given whatever options I have at the time, I'm betting I'll still stick with the local telco providor (BellSouth) and try to ride it out.
* sorry, I don't count satellite yet. Think it's still kinda impractical
-'fester
I don't care how my service comes, but this is what I want:
(1) minimum 384 kbps, both ways, 24 hours per day
(2) static IP addresses with reverse DNS set to my domain name
(3) permission to run (low-volume) servers
I haven't found any cable provide that has that, but Speakeasy DSL and Telocity DSL do.
My DSL provider, Reflex, was a company that decided not to work through the phone company's lines or the cable company's lines like most broadband providers. Instead, it was setting up wireless links to apartment complexes, then running its own lines through the whole apartment block. Then, when it couldn't keep up with the wireless connections started using temporary land lines of some kind. But the temporary land lines for the most part never got converted to wireless. I'm not exactly sure why they went out of business, but they sure seemed to grow fast. My bandwidth was even faster than they guaranteed, mostly reliable (about what you'd expect with DSL), and I had my static IP without NAT which I just loved.
s html
Anyway, a couple of weeks ago they let go 250 employees (most of the them) then just recently filed Chapter 7 bankruptcy. In other words the company is going away forever. Too bad for all those apartment complexes advertising DSL, all that dark (unused) wiring, and those 10,000 customers like me suddenly without our ISP.
I had to dig out my 56K (i.e. 40K) modem from my closet. I've been looking around for a good new DSL provider but I wonder if I'm better off just doing without the luxury. I think it would cost my at least $200 just to get hooked up and a ton of cash per month ($60 or more) if I want an ISP with a static ISP.
Unlike Northpoint, when you had Reflex for DSL you also had Reflex as an ISP as part of the regular price which was about $30 for the whole package (the lowest price package).
Article about Reflex going out of business here:
http://seattlep-i.nwsource.com/business/reflex30.
Here's another idea. If DSL providers actually policed their network, and culled all the script kiddies, nukers, DVD-downloaders, DDoSsers etc., they could save themself one hell of a lot of money on bandwidth charges to their upstream provider.
Regarding your comment: people (around here anyway) are willing to pay more for good service, in the broadband department. My recommendation will also improve this service, by freeing up bandwidth.
So:
1) remove lamers
2) actually charge a price that reflects the service's worth, not cut-price crap.
There are 3 companies (not Bells) that have their OWN dsl equipment. Covad and Rythms have been mentioned, but don't forget about DSL.net. Unlike Speakeasy or Telocity, DSL.net is a DSL provider AND an ISP. I have a 1.5Mb SDSL line from them in Connecticut and have never had a problem with it (over a year now). They DO have a service level agreement that specifies exactly what I'll get and what they'll do. For markets that they don't have their own DSL equipment they partner with Covad. And I sleep easy, DSL.net has one of the best balance sheets of anyone in the industry. They had some lay-offs last year, but now they look good (look at their SEC filings online).
The only purges that Covad has been doing are those where they're pulling gear out of thoroughly unprofitable COs - because, for instance, there aren't enough subscribers to afford the cage (we're talking two or three people in the CO here) - and the shutdown of service to those ISPs that are unwilling or unable to pay their bills to Covad. If anything, this made them MORE reliable as a long-term prospect. They dropped their dead weight, and their customer service at it's worst was light-years better than Northpoint's average - and still a bit better than Northpoint at it's best.
If someone got caught in a purge, then they went with a dinky little ISP that didn't pay their bills and didn't let it be known that they were in danger of losing connectivity. These providers - ALL providers that sold Covad DSL for that matter - were notified of the impending shutdowns. Covad even had a project set up to help customers transfer to new ISPs. Speakeasy was one of them - and it's still going on. (Semi-Disclaimer: I work for RCN, but Speakeasy is my DSL Provider. There's reasons, but most of it boils down to cost.)
Rule Number One of DSL: If your business relies on it's net connection, DO NOT UNDER ANY CIRCUMSTANCES USE DSL AS A PRIMARY CONNECTION! I cannot stress that enough! DSL has absolutely NO service agreements, beyond a guaranteed 80% of rated line-speed for "business" class SDSL circuits. DSL is great for the home, and good for a backup circuit, but don't think it's a T-1 for cheap.
Trust in the fact that, if ANYONE goes ANYWHERE anytime soon, it won't be Covad. They're running strong, they laid off a few people back about 6-8 months ago. After that, their support IMPROVED. They reorganized, and they're running better than ever. And their service is better, more reliable, and usually more intelligently-staffed than just about any of the local Telcos are. Do your homework on DSL, and you won't get burned.
You thought that this sig was what you think that I thought you wanted me to think. I think.
This isn't necessarily true. The local telcos are legally only able to charge a minimal fee to CLECs - Competitive Local Exchange Carriers, which is technically what a DSL provider is - of around $7 for the local loop. The DSL providers then turn around and sell access to their network for X number of dollars, plus a fee per circuit of - I THINK - around $40 per line. (This is what it was about a year ago; whether or not that's changed since then, I don't know.) On top of that, you get whatever else the ISP charges. The rates aren't cut that much really; you're looking at an over 300% profit on the loop charge alone, and I know that most DSL ISPs that are worth looking at twice are charging around $60 for a 608/128 line, $90 for 1536/384 lines, and around $50 for a 192k SDSL line, working up. (Highest I've seen is $450/month for a 1.5Mbit SDSL line with some real nice side perks.)
DSL is far from cut-rate; the companies involved just happened to jump in too early to gain the early ground on it. Support costs a lot for DSL, although that's changing with the new Rate Adaptive Error Correction software out there. My line had a hard short on it at one point about two months ago, that I found out about quite by accident. My DSL line was still up through it, and - having troubleshot for umpteen million DSL circuits - I know that a hard short on a SDSL line takes it down. (In case you're wondering, the reason it isn't applied is because it would break the guarantees of speed on an SDSL line. The error correction drops your speed to compensate for loss of signal strength.)
I agree that DSL doesn't really work - currently - but I don't agree that it's because of cut-rate pricing. These companies are making up lost ground, but they're doing it slowly, because they can't afford to tinker with it to get it to work better.
Semi-useless factoid for the day. Copper-based T-1s are usually HDSL, which is the oldest of the DSL types. It's the repeaters and switching equipment - along with the cost of the loop and REALLY strict Service Level Agreements - that make all the difference in the world.
You thought that this sig was what you think that I thought you wanted me to think. I think.
For starters, there's the old saw about the shared node. With DSL, you don't need to wonder what's going to happen to your bandwidth when the rest of the neighborhood wakes up and smells the fat pipe. Another big one is, 99% of the cable providers out there throw a fairly big stink when you try and run a server over a cablemodem - once they get around to noticing it. My DSL ISP - Speakeasy - has two restrictions: No porn websites, and no IRC Servers. (And even that they can overlook if it's a single-node server and not part of a network, I think.)
In addition to that, DSL is cheaper. How? What if I don't WANT cable TV? Most cable companies won't sell you cablemodem access without a TV subscription as well. (Rare, but true. One of my friends is stuck with this dilemma.) Also, DSL is available where many times cablemodem isn't. Reverse is also true, of course, but unlike cablemodem access, you don't need to upgrade the existing infrastructure to accomodate DSL. Just stick a DSLAM in a central office and start plugging in lines.
Lastly, very few cable companies want to give you the same bandwidth upstream as you have downstream, without paying a LOT of money for it. DSL is comparatively cheap for synchronous speeds.
Hope that answers some of your questions. Incidentally, line conditions for DSL and Cable both are much better than average in Seattle, since there isn't a couple hundred years of cruft in the way.
You thought that this sig was what you think that I thought you wanted me to think. I think.
I though the printing press got its start print the bible. Of course, I could be wrong about that.
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As the other DSL providers go under I see the Speakeasy network grow. I had requests in for DSL from three providers for over a year, one folding, one just flat out ignoring all new requests and one not able to get the bell company around here to put in a line because you didn't go through the local bell company. I wonder how many of those smaller companies went under because of non-responsiveness of the bell companies?
Speakeasy took less than a month and service has been outstanding for the three months that I've had service.
DanH
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It won't be long before the companies that still exist as major internet players will be noticed again and everyone will be happy.
So...when can they install the fiber to my house?
--
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"The difficulty of taking on equipment, other than what your own network is designed for, is severe. There's almost no market for an arbitrary piece of equipment."
Apparently this guy has never heard of eBay. This is as good of a time as any, for just one company to pick up the slack and firesale prices as well as customers of some of these companies. Sure the market is grim right now but as history shows it cannot stay there, and should a company jump up and purchase the equipment and accounts, they could actually make money.
First off with the economy in a slow downturn, you'd save a heck of a lot more money buying surplus stuff from companies like these, at the fraction of a cost. Secondly you'd already have accounts from them as well, the question is whether or not DSL is actually a dead technology, and the answer is no.
Given the monopolization of the Bells over phone lines, this is the only issue truly affecting these companies. If customers aren't paying, then its the company's own fault, not the Bells.
All you need is one company to face the facts, sure the market is bullish, which also means no one is going to be spending an arm and a leg buying newer equipment and technologies for a while, so why not capitalize on whats in front of them right now. DSL isn't going anywhere, even if AT&T isn't buying any new DSL assets, who the hell said they were the definitive *anything* of DSL to begin with? So I truly believe there is money to be made as long as the company believes in long term growth as opposed to short term profits, which is one of the biggest problems that lead to most of the Venture Capital firms demise in funding. Everyone thought about making the fastest dollar, and shitty technologies messed things up for a lot of good business ideas, and companies.
Now for those customers using the services such as Covad, or any other that may have gone under or are going under, I saw a judge forced a company to pick up the slack, and what I would do is re-check some of those legally bonding contracts you signed when you purchased the service, and make sure these companies no matter what hold up to their end of the bargain or refund the difference.
Ghost in the Shell
360 degrees of Karma
The article left me wondering just what it is that the DSL companies were selling. They weren't selling services to the customer, ISP's did that. They can't run DSL lines to the customer -- only the local phone companies may do that, and quite often they can't (either don't know how, or the lines are too long or too patched-up). And finally, the local telcos are selling ADSL and T1 lines plus ISP service in competition with the DSL company & it's ISP's. So how in heck do you make a profit acting as a middleman when the company you depend on most to deliver the service you sell is also a competitor for the whole chain?
There is one ray of hope for the stockholders (not the customers or employees). It is probably possible in many cases to convince a court that the telco deliberately fouled up delivery of DSL in order to sell much higher priced T1's, or fouled up third-party DSL the better to sell DSL directly. So they should be able to sue under antitrust laws. This is in the tradition of Staq and CDC, which were rescued from bankruptcy by lawsuits after losing their markets.
For those who were born yesterday: Staq had a program which compressed data on the fly, so you could store twice as much on a small hard drive, if you didn't mind losing all those CPU cycles compressing and decompressing. This was briefly useful when Microsoft released Windows 3.x and made most existing drives too small, but MS-DOS 6.x included a program which looked suspiciously like Staq. Next year, much bigger hard drives were cheap and nobody cared about compression -- but Staq's lawsuit for patent or copyright infringement ground on and eventually won a big settlement. CDC built large mainframes in competition with IBM in the 60's. When they started, IBM didn't have anything near as powerful as the CDCs. So IBM announced the System 360, then tried to build it. The 360 hardware might have been on schedule, but the OS was several years late -- but still, many IBM customers waited for it instead of buying CDC. CDC filed an antitrust suit, claiming that selling vaporware was unfair competition. Long before the suit was settled, the full 360 line was out and delivering the promised power, and CDC was bankrupt. But finally IBM paid them to settle the suit -- and allegedly also to erase a database of IBM misdeeds that cost $16M to compile, before the Feds got interested...
I wonder if the disintegrating DSL market has anything to do with the fact that(at least in Seattle area) cable service is better, cheaper, and faster? I've been much happier w/ my cable(Millenium Digital Media) than any of my buddies w/ DSL. For that matter, can anyone help my clueless self with an idea why ppl would choose a DSL company(esp. one that has to go through another layer of ISP) over cable? Not trying to be inflammatory, if anyone cares, just curious.
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