Policy Forum - Putting on the Brakes?

Posted 11/2000

Policy Forum

Putting on the Brakes?
Users Charge SBC Intentionally Slows DSL Rates
By Kim Sunderland

The inability of DSL providers to provision service to keep up with demand has been a widely reported problem. Now SBC Communications Inc. (www.sbc.com) is grappling with another DSL problem--the fact that some of its DSL users believe it is intentionally slowing their connections and reaping financial gains as a result.

A class-action lawsuit filed against SBC makes the claim that the company purposely slowed DSL-based Internet access rates to preserve bandwidth while pulling in thousands of DSL customers through its Project Pronto. The $6 billion project is SBC's large-scale effort to roll out DSL as fast as possible to as many customers as possible. It is part of the pact SBC made with regulators to win approval to acquire Midwestern Bell Ameritech Corp. and to get the OK to offer in-region long-distance services in Texas. The DSL service is slated to be available to approximately 77 million SBC customers by 2002. SBC spokesman Selim Bingol says that so far SBC is on track and expects to have 1 million customers signed on for the service by year's end.

Whether the lawsuit and the publicity it brings will affect these goals remains to be seen.

The lawsuit involves several dozen Houston DSL users who have jointly complained to a Texas district court that SBC is intentionally delivering less than its guaranteed minimum DSL connection rate of 384kbps, instead offering only 128kbps connectivity for e-mail and newsgroups. The users also say that SBC is doing this "without notifying customers or giving any discount for the inferior service," says Geoffrey Berg, an associate attorney with Berg & Androphy (www.bafirm.com), the firm handling the case for the DSL users.

Berg says that if the case goes to trial, his firm will show that SBC is capping access speeds "in order to preserve bandwidth space and avoid upgrading their systems." By withholding bandwidth, the DSL users claim that SBC is able to resell it. In fact, according to the lawsuit, the Internet users don't believe that SBC owns enough bandwidth to deliver on its promises. In Internet message board postings, Southwestern Bell (www.swbell.com) technical support people have admitted there's a cap on speeds, the lawsuit says.

SBC isn't denying rate variation.

In fact, marketing material from the company indicates speeds may vary (see "Southwestern Bell DSL Marketing Material"). Bingol says that SBC's DSL service delivers the speeds as guaranteed for customers within 12,000 feet, or 2.2 miles, from a DSL-enabled SBC CO. Lines also must meet certain transmission criteria. Beyond that point, there are many factors that can impact the rate at which data is transferred online, including Internet congestion, server or router speeds, protocol overheads, etc., Bingol explains.

Also, speeds at which people access different websites, including public news servers, may vary based on the performance characteristics established by the service provider or website operator, he adds.

Speeds for accessing newsgroup data are maximized at 128kbps in order to provide a more reliable service for customers using newsgroups, and access to e-mail and to other Internet applications aren't affected. Bingol says that only about 1 percent of its DSL subscribers use the newsgroups. DSL connection speeds and the speeds that data is accessed from newsgroups are two different issues and shouldn't be confused, he says. Optimizing newsgroup speeds doesn't free up bandwidth that would allow SBC to sign up other DSL customers, but it does help balance the load on the Internet news servers operated by SBC, Bingol says.

But Jonathan Atkin, senior analyst of broadband services with Dain Rauscher Wessels (www.dainrauscherwessels.com), an investment banking and brokerage services firm, says that many of the Bell companies appear to be offering a consumer-grade Internet service that is oversubscribed. "Thus, what may nominally be, say, 384kbps or 512kbps bandwidth to the end user, effectively becomes far less throughput when one considers congestion in the metro-area backhaul legs," he says.

Meanwhile, Berg says that the class-action lawsuit continues to attract more plaintiffs, who as of late September numbered near 30.

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