StatCenter: The DSL Market

Is DSL the answer to low-cost, high-speed, "always-on" Internet access? Telecom companies and ISPs are betting on it. Here are some DSL stats that might shed some light on the industry.

Fast access and “always on” Internet is becoming a hot commodity with consumers and small businesses, and DSL technology has been slated—primarily by phone companies and Internet service providers—to meet the growing demand. Digital Subscriber Line (DSL) technology uses existing copper phone lines to deliver fast dedicated connections to the Internet (at speeds 50 times faster than a 28.8K modem). There are several flavors of DSL, so it’s often written as xDSL, with the x being the particular flavor, such as ADSL, HDSL, IDSL, RADSL, and more. (For definitions of these terms, see our Jargon Watch on Telecommunications .)

While many parts of the country do not have DSL available, the online publication DSL Prime estimates that DSL will soon be available to 80 million homes. However, where DSL is available, installation and service have often proven to be a problem, with long waits for hookups, poor connections, and billing and tech support problems.

To ensure their own survival in this “need-for-speed” race, Internet Service Providers (ISPs) and others are planning big rollouts of DSL service in 2000. However, Cahners In-Stat Group estimates that cable and DSL combined will make up only 3.1 percent of ISP business in the United States.

DSL expenses for small businesses include up-front costs of $250 for installation and $400 for a router. Monthly costs range from $40-$75 for entry level service and approximately $600 for T-1-equivalent speeds. This is less expensive than a full T-1 connection ($800-$1200 month, generally), but more expensive than cable Internet access, which costs approximately $200 for the modem, $100 for installation, and $30 a month for the service. In fact, DSL is lagging behind cable modem access in providing consumers with the high bandwidth they want. Cable subscribers number 1.3 million, but there are only half that many DSL subscribers. Still, Interactive Week (Nov. 8, 1999) says that DSL is poised to take over cable in the small and medium-size business market. Cahners In-Stat Group estimates there were 1.3 million active DSL lines by the end of 1999.

Besides telecom companies like MCI/Worldcom and Bell Atlantic, and ISPs like Flashcom and Earthlink Z, some of the providers of DSL service include Covad Communications, NorthPoint Communications, Rhythms NetConnections, MegaPOP, and Ziplink.

Rates of speed and maximum distances of the phone company’s central office from the subscriber’s location vary for each type of DSL.

DSL is in a head-to-head battle with cable modem technology to provide broadband services to small businesses and residences, and, thus far, cable is winning.

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