As DSL vendors struggle to stay alive financially, many are also eager to add VoDSL (voice over DSL) capabilities, now considered by some industry watchers to be the "killer" broadband application.
Especially attractive is the notion of paying a single vendor for voice service and broadband connections. Sixty percent of those polled recently by Scottsdale, Ariz.-based market research company Cahners In-Stat said they prefer to buy bundled communications packages from a single provider.
However, VoDSL is not yet a reality because hardware makers such as Alcatel and Cisco Systems, which make DSLAM (Digital Subscriber Line Access Multiplexer) devices, still have technical hurdles to clear, according to Cahners.
Specifically, DSLAMs, integrated access devices, and voice gateways will have to work seamlessly, and quality of service will have to improve, Cahners analyst Ernie Bergstrom said.
To match traditional voice services, VoDSL equipment must be able to do a better job of prioritizing traffic as it passes through the line, as voice is extremely sensitive to latency and delay, Bergstrom added.
Once these technical barriers have been surmounted, VoDSL is expected to take off -- perhaps as early as the third quarter -- and hit 10 million active lines by 2004, according to Cahners.
DSL money matters
Covad fares best in a financial pulse check of three DSL vendors that aimed to roll out nationally.
Aggressive accounnting with ISP customers in the red and recent SafetyNet plan for customers of "distressed" ISPs
Large infusion from Baby Bell SBC, which recently took 6 percent equity stake in Covad for $150 million
Recent direct sales channel established to build up small businesses through subsidiary BlueStar.net
This week filed a $1 billion lawsuit against Verizon for scuttling plans to merge companies' DSL efforts
Forced into bankruptcy Jan. 16. Company assets now being sold off through open bid procedures in U.S. Bankruptcy Court
Laid off 450 employees in January
Discontinued direct sales channel to the enterprise
Exploring financing options in a cash position now guaranteed only until 2002
Also working aggressively with financially distressed ISP customers
DSLnetworks quickly retaliated this week by hauling Covad into court. The ISP filed an injunction to stop Covad from contacting DSLnetworks' customers.