NANOG Folks; Some of you engineers need to take a stint in product development to see how alternatives like xDSL play out. :-) This note is a bit long, but if you are interested in how DSL services work, read on. I'll make it worth your while. First, Microsoft/Intel/Compaq don't care who provides the xDSL and Internet services -- they will have nothing to do with the service delivery. They simply want to sell one type of xDSL modem and they want to be able to integrate these modems into their systems and they want simple installation (hence the interest in "splitterless" xDSL modems). This troika is simply trying to get the phone companies to pick ONE DSL standard or set of compatible standards NOW so they can sell hardware SOON. Money will be forthcoming to support these commitments, much as MS invested in Comcast and has offered financial incentives to use WinCE in set-top boxes. xDSL-based Internet services have three components: 1) the copper cabling 2) L2 aggregation 3) Internet service Only the incumbent local exchange carriers (ILECs), or as they are often called, the regional bells (including GTE), can provide the copper circuits through tariffed unbundled services. I suppose you could pull copper to every residence and small business, but I don't know of any really serious proposals to do so. The L2 aggregation can be done by the ILECs or by the competitive local exchange carriers (CLECs). The non-ILEC DSL service providers MUST be CLECs, else they can't interconnect with the ILECs. CLECs can have a variety of interconnection agreements, but *any* CLEC can get *some* kind of interconnect agreement with *any* ILEC, by law. If not, sue and make your business plan that way (what I call The Lawlor Plan B). ISPs often cannot get co-lo space, but CLECs always can, just not always on the most favorable terms. The Internet service can today only be provided by non-ILECs, since the ILECs are, for now, prohibited from carrying data traffic between LATAs by the Telecomm Act and the MFJ before that. But that will change soon. In the case where the ILEC provides the DSL service but not the Internet service, the ILEC installs DSL access multiplexors (DSLAMs) in their central offices, aggregates DSL traffic from their circuits and pipes it to the various ISPs. The subscribing ISPs are buying the aggregated DSL service from the ILECs, typically via one or two ports. In the case where the CLEC provides the DSL service, the CLEC rents unbundled conditioned copper circuits (not alarm tariffs) from the ILEC. The CLEC rents co-lo space for its mux equipment or else it backhauls the DSL circuits to a nearby facility (thereby reducing the DSL service radius from that central office). The CLEC backhauls the traffic from the many COs via a local network. The CLEC then sells aggregated DSL service to the ISPs via one or more interconnects to the local CLEC network. Of course, if the CLEC is national, then they might offer access to a national DSL service via one or more access ports. (It could happen.) Now, an ISP can become a CLEC and provide DSL-based Internet access, but the ISP needs to lease the copper circuits from the ILEC and install the mux equipment in COs like a CLEC. Realistically, you can't backhaul DSL very far, so trying to avoid the co-lo space is difficult, unless you can rent facilities next door to the CO. Depending on whether the ILEC or CLEC is offering the aggregated DSL service (or you are doing it yourself as a newly-franchised CLEC), there are choices as to access method. The ILECs are trying to preserve their investments in ATM networks, so they would prefer you to connect via the ATM (or SMDS) networks that they already have in place. Then they can bill out the depreciation of the copper and ATM networks to you, keeping the DSL price up. The CLECs just want to satisfy the customer, so they may offer you an Ethernet port or a DS-1 or DS-3 cisco HDLC circuit. You usually have to pay a port fee and pay for the access circuit and then pay for the DSL circuits as ordered. Not every ILEC offers the aggregated DSL service to any and all ISPs. Pacific Bell started out that way, but SBC has different ideas, so I would expect the DSL services in SBC/PacBell/SNET territory to change over time. GTE has no legal restrictions at all, so they shouldn't be expected to offer DSL services to competitive ISPs. If the ILEC doesn't believe in "open and equal access" for their DSL services, they will use DSL as access for their own ISP subsidiaries and will not offer DSL to competitive ISPs, who will have to buy aggregated DSL services from CLECs, if any. In this case, the ILECs don't need to use ATM or any other L2 muxing technology if they don't want to, since they will aggregate all of their DSL circuits to only one IP network. However, with the inter-LATA restriction still in effect (for now), they need a wholesaler ISP to carry the traffic inter-LATA and pay for all the backbone expenses. If the "repeal" of the '96 Telecommunications Act holds, then this inter-LATA restriction will be relaxed, the ILECs will enter the long distance voice market (just as the long distance voice market peaks and starts to decline), and they will build or buy an IP backbone and do the whole DSL/ISP thing end to end. At that point, the ISP's only choice is via a CLEC, if any, via DS-1s, or as a CLEC doing self-xDSL. xDSL has other problems, including bandwidth v distance curves that aren't very good for Internet access margins and a relatively high cost compared to POTS and cable, but still somewhat lower than T-1 (which is usually HDSL technology). Prices range from $40 to $50 per month for so-called telecommuter services (no IP backbone included) up to $250 per month or so for 1Mbps asymmetric, getting up into the T-1 price range. Once a large number of residential and small business sites are getting anywhere from 384k up to 10M, the World Wide Wait is going to be a real deflator of consumer expectation regarding the performance of their new high-speed access service. Milo Medin of @Home properly anticipated this scenario and long ago designed a proxy-caching scheme for the @Home eyeballs that the content providers can live with. Most other ISPs are either still throwing expensive backbone bandwidth at the problem or struggling to get 25% to 35% cache hit rates out of proxy-caches. As Paul Vixie pointed out, you need to interconnect many proxies with some hierarchical inter-cache communication and cover large populations of browsers to get hit rates up to perhaps as high as 50%. You also need to install proxies transparently in the data stream to avoid "minor configuration changes" as Intel calls it and that takes expensive high performance hardware. It is a rather poor business model, since almost no one (Intel excepted) expects the consumers to pay for better performance, so ISPs have to pay for proxy-caches with expected backbone bandwidth savings. Still in all, MirrorImage, Inktomi, Cisco, and CacheFlow should make some money on selling proxy-caches. Enterprise proxy-caches should work better if everyone on the intranet is looking at the same small data space (perhaps an internal web site). Better performance will have to wait for someone to shim some sort of real data architecture into the Web either through protocols (did I hear someone talking about URNs five years back?) or some other high-performance web hosting service (with mirrors or mirror-like servers). --Kent Kent W. England Wireline-> fon:650.596.6321 VP of Technology Receptionist-> fon:650.596.1700 GeoNet Communications, Inc. Facsimile-> fax:650.596.1701 555 Twin Dolphin Drive Email-> mailto:kwe@geo.net Redwood City, CA 94065 Web Site-> http://www.geo.net Wireless Text-> mailto:pagekwe@geo.net PGP Key-> http://keys.pgp.com:11371/pks/lookup?op=get&search=0x6C0CDE69