April 03, 2001, 3:45 PM — DESPITE ALL THE TALK of competition in the high-speed access space since the passage of the Telecommunications Act of 1996, there haven't been many competitive offerings available to most enterprises, at least not in terms of the last-mile connection to the nearest Internet point of presence. For most businesses, the only real choice has been the local telephone company's venerable T1 connection -- a couple dozen pairs of ordinary copper phone lines aggregated into a bundle that offers speeds of no more than 1.5Mbps. The only options generally have been a fractional T1 or a multiple T1 at correspondingly lower and higher monthly tariffs -- in other words, not much in the way of alternatives.
Seeking to fill the need for options, several challengers have appeared recently. DSL was supposed to offer T1 speeds at a much lower price, but real-world implementations seldom matched T1 performance. And when they did deliver the speed, their prices were apt to be equally elevated. In any event, DSL services as a whole have yet to demonstrate enterprise-class reliability and, moreover, the services have been plagued with well-publicized security lapses as well as disquieting business failures among the providers. Other high-speed access technologies -- such as broadband wireless, cable data, two-way satellite and fiber to the building -- either haven't happened yet or at least haven't been available in the bulk of business districts.
Dawn of the D-LECs
Then, with little advance publicity, a host of new companies called variously data-centric local exchanges (D-LECS) and building local exchanges (B-LECs), derived from the fact that many of these companies bring their services to multiple companies in a building, began to challenge the incumbents with services that offered throughputs in the tens or even hundreds of megabits per second at prices in the hundreds or low thousands of dollars per month. The list of insurgents is long: Dallas-based Allied Riser Communications (ARC), Cogent Communications in Washington, D.C., OnSite Access in New York City, Terabeam in Seattle, New York City-based Winstar and San Francisco-based Yipes, just to name a few.
While none of these upstarts share identical service offerings or business plans, all place their emphasis on high-speed data as opposed to voice -- hence the name, data-centric local exchanges. But that's far from all they do. Quite a number, including OnSite Access, Winstar and Yipes Communications, offer voice as well -- generally in a bundle combining local and long-distance calls with high-speed Internet access and LAN extension. Some of the companies provide Web and application hosting. A number, including ARC, even sell LAN consulting services.