BC Tel promise
to shake up Internet service industry by bypassing phone lines
by Alan Zisman (c) 1996 First published
in Business in
Vancouver , Issue #331 February 27, 1996 High Tech
the talk about
the World Wide Web, very few companies are turning a profit on their
new sites. But companies selling services to those who want to get
onto the 'Net are viable businesses. Until now, it's been an easy
market to enter: lease a high-speed connection to the 'Net, buy or
rent an Internet server, put in a bunch of phone lines, and start to
advertise yourself as an Internet service provider (ISP). With the huge
growth in customers seeking dial-up access to the 'Net, it's been hard
to go wrong.
be the shakedown
year, however. An early sign was the purchase of two of the Lower
Mainland's most established ISPs, Mindlink and Wimsey,
by Ottawa's iStar, creating Canada's largest ISP. And after
persistent rumours that Vancouver's Internet Direct (ID) was
working hard to build a large customer base in anticipation of a
ID announced an agreement with BC Tel under which the utility
would house the ISP's 2,300 lines and manage the hardware, leaving ID
to provide customer service.
size, however, ISPs remain small to mid-sized businesses, and they're
nervously looking over their collective shoulder, awaiting further
moves into the market by corporate giants, particularly the phone
and cable companies.
by the entry of the phone and cable companies into the Internet service
market, if only to break the bandwidth bottleneck. Bandwidth is how
much signal can be pumped down the wire, and at what speed. Internet
users are demanding more and more bandwidth--the 'Net that used to
work fine with relatively few users sending low bandwidth e-mail and
news groups is running out of capacity as a much larger number of users
want to take advantage of graphics, sound and, increasingly, video.
Promises of 3-D virtual reality and Java applications running in real
time will become increasingly difficult for the Internet to fulfil.
As well, while most traditional Internet users were connected to
corporate, government, or university networks, most new users are
connecting via modems over the phone lines.
the modem speeds
have tripled over the past few years from 9,600 to 28,800 bits per
second, even this is much too slow for the sorts of services people
are now expecting from the 'Net. Traditional modem technology is
the limits of speed possible on the copper-wire phone network.
are slowly replacing the millions of kilometres of copper wire with
fibre-optics to allow the high speed and capacity users desire. But
while some new commercial and residential developments are being built
with fibre-optic capability, it will be a couple of decades before
BC Tel provides this capability in my east Vancouver neighbourhood,
alternative is the
cable-TV network. The existing coaxial cabling doesn't provide the
capability of fibre-optics, but it's far superior to copper phone
line. As it is, this system isn't ready for the Internet--it needs
to be upgraded to provide two-way signals--but this is a much smaller
job than replacing all of Canada's phone cable.
is currently testing this technology in Newmarket, Ontario, promising
speeds up to 1,000 times as fast as current modems. Dubbed cable modem,
it is actually a variation of ethernet, a technology widely used in
business-computer networks. Users add an ethernet card to their
and the cable modem connects the ethernet card to the standard TV
Rogers' vice-president of business development, hopes the hardware
costs drop to about $400 soon after becoming generally available late
be offered at a maximum rate of 27 million bits per second
(Mbps) while receiving data (with a slower rate of 128 kilobits per
second while responding). Eventually, service could increase to up
to 38 Mbps.
dubbed WAVE by Rogers, has been estimated at $39.95 per month, after
a $99 installation visit--more expensive than with many current ISPs,
but providing a much more powerful service. And just as TVs are always
connected to the cable-TV signal, Internet users could be always
to the 'Net, with no more need to log on for each use. Rogers expects
to rent cable modems to users.
mean to the local ISPs, faced with one or the other of these corporate
giants moving in on their market? Many are evolving into content
consulting with businesses that want to establish a presence on the
Web but have no idea what it takes to create and maintain a Web page.
make this transition as this new market evolves. Others...?