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US DSL indie market ‘near total collapse’

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Around 700,000 Americans managed to get DSL access in the fourth quarter of last year.

This brought the total number of DSL lines in the US to 2,429,189 at the end of 2000. But between 40 per cent and 60 per cent of the country's households still have a long wait ahead of them to get this form of high-speed Net access.

Traditional local phone companies, or ILECs (Incumbent Local Exchange Carriers) like Verizon and BellSouth, dominated US DSL in the quarter with 78 per cent of lines (increasing their installed base by 46 per cent). Independent providers, or CLECs (Competitive Local Exchange Carriers) like Covad, accounted for 22 per cent (up 25 per cent).

Altogether, the US market grew 41 per cent for the quarter, according to US research company TeleChoice, which says it interviewed every DSL facilities-based service provider in North America.

Canada got more than 150,000 subscribers in the last three months of 2000, giving it 431,856 DSL lines in service by the end of 2000.

"The big story this last quarter was the near total collapse of the CLEC market," said Adam Guglielmo, a TeleChoice DSL analyst. "Yet the continued strong growth of the overall market shows an undeniable demand for DSL. We do not expect this to slow down."

In total, North America saw DSL users jump to nearly three million, compared to 570,000 at the end of 1999.

"These next two quarters will really be about who is left standing," said TeleChoice DSL analyst Pat Hurley.

"There is still room for competition, but some of it may be coming from a different quarter than we originally thought. Value-added services like voice over DSL should finally start becoming a real factor by the end of this year."

TeleChoice predicts the number of DSL users in the US will more than double this year, reaching 5.7 million users the December, and 17.4 million by the end of 2004.

But Hurley estimated that around 20 per cent of US homes would not be able to get DSL for at least three to four years due to being too far away from their main DSL office (18,000 feet is the maximum line distance). "It's not really a high priority for phone companies," he told The Register. "They can continue to make money and keep going without addressing this problem."

And another 20 per cent to 40 per cent of homes are behind the digital loop carrier - when phone companies run a fibre optic cable to one point in a neighbourhood, then connect individual copper lines from this to each house. DSL equipment has to be fitted in each of these 'boxes' before the service will work. Although the installations are being addressed by the telcos, this process will also take "several years", according to Hurley. ®

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