TECHNOLOGY - The wire brigade

BT has dropped the charge of ISDN installation, but will this be enough to fight off the threat from competing technologies?

A sure sign that innovations have made it beyond their initial waveough to fight off the threat from competing technologies? of PR hyperbole and escaped the attentions of the Tomorrow's World team is when competitors fall over themselves to produce a rival product. And so it is with ISDN.

There was a time when ISDN was the only choice if people wanted to surf, rather than paddle, the Net. But times have changed and several other technologies offer viable alternatives to ISDN, including V.90 modems, cable modems, ADSL modems and satellite.

So has BT left it too long? Should it have dropped its ISDN 2 installation charge 10 years ago? Is ISDN dead in the water or will it be able to see off the competition?

A major drawback to ISDN is that it is no longer the fastest system on offer. Even if you link together two separate ISDN channels, you still have only a single 128Kbps link - and you are paying for two telephone calls.

Worse still for ISDN, modem manufacturers such as Diamond have developed ways of aggregating two V.90 modem sessions, theoretically enabling a 112Kbps link. The greatest threat to ISDN comes from asymmetric digital subscriber line (ADSL), which is about 70 times faster than ISDN. In the US, Hayes has developed ADSL and cable products, but has yet to announce UK availability.

Hayes chief engineering officer Bill Pechey says: 'Tariffs have not yet been announced for ADSL, although BT has been running trials for a long time now.'

But BT has problems with ADSL. For example, how much does it cost to provide the service? To offer an ADSL service to a particular area, BT must invest in a digital subscriber line access module (DSLAM). If only a few subscribers in the area want ADSL, revenue will be low.

In addition, a network operator has to provide an asynchronous transfer mode (ATM) connection for the DSLAM to carry the traffic; this may already exist or may have to be provided specially for the purpose. This does not offer a rapid return on investment.

Additionally, BT must consider how the ADSL tariffs fit in with tariffs for other services. If ADSL is priced lower than BT's leased line circuits (kilostream), then its customers will migrate to the new service en masse.

Worse still, as ADSL is, in most ways, better than ISDN it should be more expensive. BT can't price ADSL too low or it will start losing other business - which is why it has kept the price of basic rate ISDN so high. But if ADSL is going to see off competition from cable modems, then its tariffs have to be set close together. Cost is now a crucial factor.

One technology that has attracted a great deal of publicity is the system proposed by Nortel in conjunction with the North West electricity company, Norweb. The basic idea of the Digital PowerLine is to use existing electricity mains cabling to provide links to the internet. The system will provide an internet link running at approximately 1Mbps.

The advantage to this approach is that you don't need to dial a number - instead you have a permanent live internet connection. In terms of cost, this is highly attractive since you dispense with call charges.

The catch is that, in effect, all the people connected to the system - which could be anywhere between 150 and 250 households - are sharing the same bandwidth.

John Cunningham, MD of PMC, which makes Pace modems, says: 'The best thing you could do is not tell your neighbours about the system. Otherwise, you'll find the house next door but one is hogging all the bandwidth.

It will be great before 8.45am, but between 3pm and 6pm you'll find your PC is dying.' The same is true of systems which use the networks built to deliver cable TV.

Cable modems are similar, in principle, to Digital PowerLine and ADSL.

The cable companies' impact on other services will be much smaller than BT's, but if hundreds of consumers start attaching cable modems to a TV network, this will cause a large increase in the bandwidth required by cable companies. Cunningham says: 'You're just moving the bottleneck elsewhere.'

The availability of cable networks is poor compared with the almost universal availability of ISDN, so the competition factor will come into play only in areas where both ADSL and cable modems are available.

In the opinion of Nick Hunn, product development manager at TDK Grey Cell, the big disadvantage of ADSL is that it is not a standard and everyone who wants a piece of the action has a different perception of what the standard should look like. He also points out that one of the interesting points of contention is whether ADSL should be a splitterless system - allowing users to dictate what equipment they install.

The alternative is a more conventional approach based on rented equipment (for example, the BT wall socket) installed in the home by the service provider. In some ways, this appears to be a re-run of the debate about ISDN (interface built into product) versus S/T (BT supplies a box on the wall) and may polarise ADSL implementation on both sides of the Atlantic.

But ISDN is fighting back. At the end of March, BT announced that in certain circumstances it will charge only #99 to install basic rate ISDN.

Indeed, tariffs have been falling steadily over the years but are still considered too high for the major applications of internet access and teleworking.

'There has been an increase in competition for BT recently with many cable companies finding ways of offering basic rate ISDN at lower prices,' Pechey explains.

'In addition, BT is conducting trials of an ISDN service called, provisionally, Home Highway. BT has not yet announced tariffs for this service, but all the indications are that it will be competitive and will represent a significant reduction in both installation and rental charges.'

BT is highly optimistic. According to Nick Jones, ISDN marketing manager at BT: 'The demand for ISDN has never been so high. It accounts for one in three of all the business lines we sell, and with this new offer, the price of connecting to ISDN is the same as connecting to a standard business line.' This is only true, of course, if no BT line to the premises already exists. If you possess a BT line, reconnection is only #10.

'This special offer will be of particular interest to businesses that have been considering using ISDN as a migration from their normal business line,' Jones adds.

Faced with all this impending competition, is ISDN rapidly heading towards oblivion in the UK? Hunn says: 'There's a good market for dead ducks - look in any Chinese restaurant. I don't know whether ISDN will ever acquire critical mass in the UK, but then again, what's the alternative? ISDN has lagged behind in the UK because of installation and pricing problems, not because of the technology. Why should we assume that the path of ADSL should be any smoother?'

Asked what effect he thinks BT's #99 installation offer will have, and Hunn replies: 'Not a lot. It's a marketing figure. They need to do a better job of selling the applications. For a business user, #99 for a line is largely irrelevant - they need to know what the commercial justification is, and the same will apply to ADSL.'

So will the advent of ADSL provide opportunities for the average PC dealer?

Not in Hunn's view. 'If the telephone network operators opt for splitter-based systems, they will be looking at equipment from a single-source supplier,' he says.

That supplier will be the manufacturer which makes the box for the telephone exchange end of the ADSL connection. 'They will buy ADSL boxes in bulk and install them themselves. I have yet to be convinced that there will be a user market for ADSL equipment,' Hunn suggests.

So should resellers still push ISDN now rather than wait indefinitely for ADSL? Hunn says: 'Absolutely. Especially as I couldn't suggest what they might be able to sell in relation to ADSL.'

One scenario is that the ADSL box that the phone company installs in the home will contain a 10Base-T ethernet connection which you plug into your file server or PC so that the ADSL link looks like a Lan connection.

'On the consumer side, the same model will apply, at least in Europe, where we normally let companies like BT put terminal boxes in our homes,' Hunn continues. 'I suspect the only application consumers will pay for is internet access - every recent cost analysis of video on demand has suggested that it won't cover costs.'

What conclusions can we draw from all this? ISDN is available everywhere and the tariffs are on the way down, while ADSL and cable modems leave many questions unanswered. In many areas, ADSL and cable modem services are unlikely to be available to offer users a real choice for a long time.

The advantage ISDN has is that it is here, and there's already a good infrastructure to support further growth. In addition, ISDN is seen as a standard - or as near as one can get to a standard.

Hunn says: 'I suspect ADSL will start making its mark in the consumer rather than the business market. As far as business is concerned, ISDN is tried and tested, and business is remarkably conservative in its approach to communications. If ISDN is correctly marketed, it could give ADSL a run for its money.'

Rival technologies

Analog The humble modem refuses to die. The top throughput speed modems offer is 56Kbps using 3Com's x.2 technology or the alternative K56Flex technology from Rockwell-based modems. Both methods will soon be combined into one standard called V.90.

Older V.34+ modems offer 33.6Kbps for uploading and downloading.

Cable modems These are designed to work over the proprietary data networks that TV companies operate and provide throughput speeds of about 3Mbps.

An interesting variant of the same approach is the Digital PowerLine service from electricity supplier Norweb, which uses mains cables rather than TV cables to carry the data.

A technology that was developed initially for the cable TV market has been taken up by telephone companies. This is ADSL, which provides a very impressive 8Mbps for downloading and about 640Kbps for uploading. This makes it ideal for dial-up internet access.

Rockwell is claiming it has developed a variant of this technology, which it calls consumer digital subscriber line (CDSL). It provides 1Mbps links and shouldn't require telephone companies to install additional equipment in their exchanges.

Home highway BT is planning a variant of basic rate ISDN, which will effectively give the consumer a single ISDN channel plus a second, ordinary (analog) telephone line.

Considering that ISDN now has fewer facilities than everyday BT lines, this could be a much better deal for the small office/home office worker.

Satellite

A number of organisations are planning to offer satellite-based communications to the business market, including Globalstar, ICO, Odyssey and Iridium.

There is also Teledesic, a satellite venture in which Microsoft CEO Bill Gates has invested his own funds. For internet access, there is DirecPC, which uses a satellite dish to download Web pages to your PC, but still requires a modem to upload information to the internet.