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DSL SURPRISES - NO PICNIC:  

(NOTE:  What does this mean to our industry?  We are taking a poll - please email us with the DSL service you are currently subscribing too, with level of service you have been receiving.  We will publish the results in June.  editor @e-street.)

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Businesses that use digital subscriber line (DSL) for high-speed Internet access are in for a bumpy ride. Thousands of small and midsize businesses lost their DSL service with no notice when NorthPoint Communications Group shut down services last month after filing for bankruptcy. Troubles plague other once-promising DSL upstarts such as Rhythms NetConnections and Covad Communications. The fallout doesn't surprise Mike Lauricella, an analyst at Boston-based The Yankee Group. "You can't just sell DSL nationwide in a couple of years," he explains. 

VARs such as Oli Thordarson, president of Alvaka Networks in Huntington Beach, Calif., have been looking at a range of strategies to help customers get reconnected, including using a wireless broadband network, installing T-1 lines, or getting DSL service from a traditional telephone company rather than a start-up whose future is uncertain. 

Telephone companies stand to reap benefits in the fallout, Lauricella says. "You'll see them price DSL less attractively to push people into getting a [more expensive] T-1," he predicts.

DSL By the Numbers The seven largest providers of DSL service in the United States at the end of 2000:

Company

Number of subscriber lines

Market share

SBC

767,000

33 percent

Verizon

540,000

23 percent

Covad

274,000

12 percent

Qwest

255,000

11 percent

BellSouth

215,000

9 percent

NorthPoint*

100,000

4 percent

Rhythms

67,000

3 percent

Other

129,084

5 percent

*Filed for bankruptcy in January 2001

Source: The Yankee Group

 

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