Big ISPs face a heavy bill for 56Kbit/s upgrade

Internet providers Xtra, Clear Net and The Internet Group (Ihug) are facing hefty costs as they look at upgrading their Ascend Max hardware to provide 56Kbit/s modem support. Ascend and its agents cannot yet say how much it will cost the ISPs to upgrade - but some sources say it could be as much as two thirds of the original cost of the hardware.

Internet providers Xtra, Clear Net and The Internet Group (Ihug) are facing hefty costs as they look at upgrading their Ascend Max hardware to provide 56Kbit/s modem support.

International Data (IDC) declared that the new modems will be "a major differentiator" in its recent survey of the local Internet market, although at least one company, Ihug, is expressing doubts about their value.

Ascend and its agents cannot yet say how much it will cost the ISPs to upgrade — but some sources say it could be as much as two thirds of the original cost of the hardware.

All three ISPs (and possibly Telecom, which will use Ascend hardware in its IPNet access network) have in the past year invested heavily in Max boxes — wide area network switches which allow ISPs to aggregate many dial-in lines across digital bearers. Each base unit costs around $US21,000 and takes up to six 12-port modem cards, which normally cost about $6000 — although local distributor Asnet has recently been bundling them with base units at no extra cost.

The Max issue looks like being the sharp end of the 56Kbit/s standards battle brewing between US Robotics with x2 and Rockwell and Lucent with K56 Plus. The two proto-cols are incompatible and the vendor which grabs market share most quickly will have the upper hand when a unified standard is eventually formulated.

US Robotics has a head start, because its modems are all software-upgradable, meaning it has been able to conduct trials — including a local one with Internet Prolink — using beta upgrade code. Voyager has also indicated it will probably go with USR.

Rockwell-based modems such as those used in the Ascend products will need entire chipsets replaced, at some cost. This will not necessarily mean anyone will switch to US Robotics’ competing switch products, which are far more expensive than Max boxes, but it may spoil some financial plans — especially for Telecom, which some sources claim has been depreciating its Ascend hardware over a number of years, and for Clear Net, which invested only recently in dial-in hardware.

If IDC is correct, consumer demand will force ISPs into upgrading, and it is hard to envisage consumer modem vendors holding back to ease pressure on ISPs.

But Ihug director Tim Wood is making light of any pressure. For one thing, Ihug is soon to become the first ISP in New Zealand to install Ascend’s new TNT box, which can handle up to 672 lines at once and, says Wood, will not be subject to the same upgrade problems as the Max 4000.

“Apart from anything, I have my doubts about how well 56Kbit/s will go in the real world. I’ve spoken to Graham Rowe at Telecom and he shared that view. From our point of view we’re looking to the second quarter of the year, when we’ll be introducing something that will make 56Kbit/s look like rubbish.”

No Rockwell-based 56Kbit/s modems are in manufacture yet, and Asnet boss Steve Harrington says the company has no upgrade price available. He denies claims that existing modems in Max boxes require analogue input (which would make them completely incompatible with any 56Kbit/s protocol by requiring more than one analogue-to-digital conversion) and Ascend itself describes the modems as digital.

Data Communications recently described Ascend as being a company which, like Cisco, "sells only analogue modems" for its base units. In a white paper, Rockwell itself describes K56 Plus as “another life extension for the ‘analogue’ modem”.

Ascend CEO and president Mory Ejabat admitted in an interview in Hong Kong last week that Ascend does not yet have a 56Kbit/s product and said he too has his doubts about the reality of its benefits. “But, given that, we are going to provide 56Kbit/s-capable product. Now, why are we doing that?

“Because there was lots of marketing hype. You’ve got to react to the hype because customers are expecting to get 56Kbit/s. But, as a company that provides this type of product, we failed to educate the consumer that this thing is not always going to work at 56Kbit/s. In fact, I’m sure lots of people are going to go and buy a US Robotics Sportser and try to communicate at 56Kbit/s and it’s not going to work ...

“For that technology to work, all the stars and moons have to line up in the same direction — there are a lot of difficulties.”

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