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New DSL Technology Lets You Browse the Web

Twenty Times Faster!

Interview With Flashcom's Brad Sachs and Scott Campbell

by Don Hamilton

Copyright © Don Hamilton. All rights reserved.

Until now, the phone company has been charging thousands of dollars per month for T-1 lines. This will change when these lines become commonly known as High-data-rate Digital Subscriber Lines (HDSL), which cost only hundreds of dollars per month. Better yet, you can get an Asymmetrical DSL (ADSL) for around $60, including ISP and constant connection, seven days a week, 24 hours a day, with no per-minute charge. But DSL won't work everywhere. You have to be close enough to one of the telephone hubs. About 80% of Southern California meets that requirement.

So who's going to cash in on this golden opportunity?Flashcom, that's who. The company, headed by former electronics engineer Brad Sachs, manufactures computer chips among other things. However, Flashcom has invested a few million dollars in switching systems and is on its way to becoming the DSL company of choice.

What does this mean for Southern California? In the words of Flashcom's Marketing VP, Scott Campbell, "The phone company rip-off is about to end."

WWWiz: How do you get that much information on a telephone line?

B.S.: It's magic [laughs]. All smoke and mirrors. They've found a way to use the frequencies on the phone lines that are not used by the voice traffic. Voice uses 30Hz to 4kHzs frequency range. That's why when you hear a phone it's not really high fidelity. The 300kHzs to 700kHzs will be used for the up side of the ADSL line.

WWWiz: What is the speed of ADSL for both directions?

B.S.: The A in ADSL stands for "asymmetrical," which means a different speed up to the server, then down from the server speed. The upstream is generally a request for a file and the downstream is the return of a large amount of data.

WWWiz: Why have they not used the higher speed capability before?

B.S.: They have. If you have a T-1 in your office, you've been using an HDSL which uses those higher frequencies. They have been commercially available for 15 years now. I have a couple of Ts here in my building and basically it's a pair of copper wires.

S.C.: We're using a Competitive Local Exchange Carrier (CLEC) for our T-1s and we brought them in for our telephones. Even though we're using a CLEC, GTE still has to deliver it to us. After GTE installs the line, they call to test it and the person says, "Hi, this is Carol and I need to test the DSL line." I'm sitting there laughing to myself and thinking, "What a great scam."B.S.: For years they've done this. Two phone lines is all it is and they want a couple grand a month.

WWWiz: When did they start installing DSL?

B.S.: The whole T-1 scam is going to be unveiled at this time. So the point is that DSL has been around for years but it hasn't been commercially deployed until recently. They started in the Bay Area in February or March-you know that's the hot testing bed for everything new. They've had a chance to work all the bugs out and there were a lot of bugs in the beginning. They wanted to get it right before they went into the L.A. market, as far as deployment, scheduling and coordination, including the technicians installing the modems and splitter and testing the new lines. Now they have everything worked out, which is good because it'll make the installations a lot smoother. It's like cable modems. They've been around for a while also, because they were made for video-on-demand, but can you get one? No. Not unless you live in certain areas, because you're going to need fiber for these, because it's a big shared network where users are sharing the same connection.

S.C.: If you use pay-per-view, Internet, TV or…it's all going through one fiber loop for your neighborhood.

B.S.: So what happens when at 5:00 everyone is coming home and using all these components, and people are downloading photos from the Hubble, or radio, maybe some streaming video and everything else? What happens to bandwidth? It just starts to drag and gets consumed. When everyone gets on, the line speed goes down as with all shared networks. When you're by yourself, the cable gives maybe up to 3 megs. The DSL line gives you 1.5 megs but it's a dedicated line. Only you have that line and it's secure. If you put your card out on a cable line, you can be snooped so easily it's ridiculous. When you put something on there unsecured the whole world can know about it. Anyone else in your neighborhood can pick those numbers off that line even if they're amateurs.

WWWiz: So the DSL has a lot of advantages: dedicated, secure, high speed and low price?

B.S.: We have to compete with the 56K dial-up guys right now, and they're about $20 per month and all you can eat. You pay for your phone line and your Internet service, or about $45 dollars per month for 56K. We're going to go to $60 dollars a month on the low end, and it includes an Internet account, and the phone line is already there so you've already been billed for that. So all you have is us at 650K, or 10 times the speed, for $10 more per month.

WWWiz: What about business and the ISDN comparison?

S.C.: The ISDN lines that are being used right now have different levels. Most businesses will get the two bundled loop where they're 64K and have a potential burst of 128. I talked to two companies that called yesterday that said they were spending $350-400 per month just on our dial-up. After I talked with them, they realized they could get five times the speed for the same amount of money or less, depending on what speed they wanted to go with. When you talk to the MIS or creative people at these small companies, their minds start to fly when they realize that the line is on 24/7. In essence, I could put my own server here and my customers could come in any time they want and review styles or whatever.

WWWiz: Who is your market?

B.S.: The market is guys that ISDN is too slow for at 128K, but who can't afford a T-1. A T-1 is $2000 dollars a month and that's a lot of money. We have two T-1s that we're changing out for DSL. It's a no-brainer. We save $3000 a month.

WWWiz: Who needs one?

S.C.: A lot of companies say, "We've got to have a T-1," but do they really utilize one? The answer is no. If you do a performance analysis to find out how much bandwidth they're really using, you find many don't need it. We can go to a company that was forced into a T-1 and doesn't really need it, and offer them a solution that's a much better fit at a much better price. We can give them a 750K line or half a T-1 and fit them perfectly. The nice thing about DSL is there are so many speed options. We have 12 speeds potentially. They can now tailor their speed to the need and objectives of their company.

B.S.: Before they were faced with an all-or-nothing approach.

S.C.: You had the choice of an ISDN or a T-1. When I worked for the long-distance company the minimum we would sell a 384K for was $1,500. Now you can get that line for about $200. It's a big difference. The MIS people like it but you have to talk to our controller. You talk to the controller and say, "I think I can save your company's bottom line about $18,000 dollars a year," and I can assure you it's not a hard sell.

WWWiz: How does DSL compare to a metered T-1?

B.S.: Basically if you use a metered T-1 you'll end up paying for the T-1 if you burst up to the maximum. What we are saying is give us the full pipe and use as much as you want. We don't really care. I can tell a person that they should have a 384K and they want a 784K. I'll ask them to try the 384 first and we can monitor usage, we can look at your last five minutes or last hour or last week. We can see your peak usage and let you know what and when you use it. They say, "Okay, Brad. What if I have to move up to the next speed?" Not a problem. We do it over the phone; it takes about five minutes. All we do is call the carrier and they send a digital signal to their modem, and zap! They're now a 784K. No one comes to your house. No tweaking and hardware adjustments. Nothing. Just the change done.

WWWiz: So do you guys feel guilty about stealing all this money form the phone company?

S.C.: We ask Pac Bell that question. We know it's a big profit item for them so we asked them, "How do you feel about cannibalizing your T-1 business?" They said, "If we don't do it ourselves, you guys will do it for us." This way they can keep them in-house as DSL and the Pac Bell lines will stay in house. They're all pushing in that area so they can maintain some of the business locally. The phone companies have had free rein for a long time, and great profitability. Their employees make very good incomes and they make those incomes off our sweat. It's like anything else; as technology changes it allows us to get things faster and cheaper. Why hold those back from the consumer? It's not right.

WWWiz: What sets Flashcom apart from others doing the same thing?

S.C.: With DSL it takes the right equipment, plain and simple, and we took the time and energy to find out what would service our customers' needs the best. As the markets down the line begin to require VPNs [Virtual Private Networks] and the like on a daily basis, we'll have the right equipment in place to handle the changes. We have to make sure we're not sitting there wondering if our router is going to work for new applications. You have a lot of providers out there that don't have the equipment to support the DSL services. B.S.: Yeah, they're set up for dial-up account and we're set up for DSL only. We don't offer dial-up. The equipment we selected also allows people to move. People move, right? You can move anywhere in the United States and still get service from Flashcom. Our routers work with any vendor out there. Any digital modem they come up with will work with our routers. S.C.: We have the only router in the market that has been tested to work interchangeably with all the carriers.

WWWiz: I assume that I don't have any portability with the DSL line?

B.S.: No, because it's running over your phone line and you'd have to move your phone line. It also isn't that hard because if you buy the modem it's yours to keep and you can go somewhere else because it runs on any phone line in a DSL-enabled area.

WWWiz: I go to Georgia at least once a year. Is there any way I can use the DSL line while in Augusta?

S.C.: If you had an office out there, you could have two. You could have a line there and one here. You can pick your email from us anywhere in the U.S. because we're a Web-enabled email provider, so you can pick it up on any system. We use NT servers, and the routers we use cost double what you can buy routers for because we want to be able to provide the best future capabilities for our customers.

WWWiz: Where are your routers?

B.S.: Locally they're co-located at Exodus, which puts us right on the Internet backbone. We wanted as direct a connection to the Internet as possible. It would be way too costly to upgrade our facilities here to do what we can do in a co-location. We wanted to make sure our customers had multiple entrances. We looked for a large access to the "pipe" so our customers would have the best possible experience. They were not the cheapest, but they allow us to provide connections in all the major markets. We plan to be U.S.-wide immediately.

WWWiz: Do you use any of their equipment?

B.S.: No. We use their connection but all the equipment is ours. It's our routers and servers. We own it all.


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