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DSL refers to digital subscriber lines, which are technologies that use sophisticated modulation schemes to pack data onto copper wires. In simple terms, they are a kind of high-speed data connection to the Internet and they are typically used only for connections from a telephone switching station to a home or office.
In the United States these financial circumstances are highlighted by the continued problems being experienced by the San Francisco-based broadband service provider, NorthPoint. In January the company filed for bankruptcy (Chapter 11) after the termination of a potential merger with Verizon worth USD800 million. Subsequently the company has urged its 100,000 customers "take immediate action to secure alternate services."
In Europe, most independent telecoms operators have large debts but are still waiting for the unbundling of the local loop to offer DSL services said Scott Rankin, telecoms analyst with Davy Stockbrokers.
Rankin said these operators have invested large amounts of money in licences and are not in a cash positive position. Plunging technology stocks are not helping this position according to Rankin.
Even though many incumbent operators claim that they have unbundled local loops, the level of unbundling varies considerably from country to country.
He said some incumbents have misleadingly claimed that they have rolled out DSL when in fact they have only upgraded switching in networks without upgrading lines.
Significant investment is needed in fixed line networks to upgrade them for use for broadband services, but Rankin said investors and companies were not interested investing money at all at the moment.
Despite European Commission regulations that mandated access to the local networks of incumbent operators by 01 January 2001, not a single local loop has been unbundled in Ireland.
Rankin said telecommunications regulators were finding it difficult to come down hard on state operators because of the investment involved and the financial pressures on the telecommunications industry currently.
Other Irish telecommunications operators have accused Eircom of frustrating their attempts to gain access to its network at cost effective prices.
Eircom said it believes local factors make it uneconomic to offer access at a price less than EUR25 (IEP19.69), is currently in talks with Doyle on the issue.
In a ruling yesterday, the ODTR, directed Eircom to change its procedures for providing information to other licensed operators on local-loop unbundling.
Eircom recently scrapped the technology platform upon which it was developing its digital subscriber line (DSL) offering. The company cancelled a contract reported to be worth IEP12 million which was agreed with Newbridge Networks in January 2000.
Although Eircom is in negotiations with equipment vendors to replace the platform, it is thought the introduction of DSL will be delayed.
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