The Future of Broadband is... DSL

It’s not news that demand for bandwidth is growing exponentially. But here’s a surprise: The fastest-growing technology for wired broadband is still DSL. That’s right, DSL, the aging technology based on copper telephone wires that, if you believe the conventional wisdom, is being buried by cable and fiber. 

DSL still accounts for 70% of all broadband connections, and by the end of the year it will claim just fewer than 400 million subscribers worldwide, compared to 116 million for cable (mostly in the U.S.) and 64 million for fiber, according to Point Topic, a U.K. research firm specializing in broadband communications.

What’s more, advances in technology are making it possible to squeeze surprisingly high data rates out of the copper-wire infrastructure that exists in nearly every U.S. community. AT&T, for example, offers subscribers download speed up to 24Mbps - far higher than the pokey, single-digit speed that most DSL customers are accustomed to. 

Taking Advantage of Existing Infrastructure

Although AT&T markets its U-verse service as fiber, it’s actually a hybrid, says John Cioffe, whose pioneering research in the mid-1980s earned him the title "The Father of DSL." What AT&T has done, he says, is run fiber to the so-called cabinet, essentially a switch on the network that connects with the copper wires extending to homes and businesses, he says. “It’s probably sexier to talk about fiber than DSL,” says Ciofe, now the CEO of ASSIA, which builds management systems for DSL providers. In fact, when AT&T says it is losing DSL customers, it’s actually losing them to U-verse, which is simply a different flavor of DSL. 

While the hybrid approach to DSL takes advantage of existing wiring that runs to the home, some newer DSL-related technologies take that a step further, also using the wiring inside the home or business. Bonding, as it’s called, in effect ties together the two and sometimes four pairs of twisted copper wire inside a customer’s building. Multiplying the number of twisted pairs multiplies DSL bandwidth as well. Technologies that can take advantage of bonding include VDSL, VDSL2 and ADSL2. 

Sonic.net, a small ISP in California’s Sonoma County, offers bonded broadband access of up to 40Mbps, and service of up to 20Mbps on a single line using ADSL2. Other carriers offering bonded DSL service include CenturyLink and Telus. 

The Ultimate Motivator: Cost

AT&T’s marketing sleight of hand reveals an important reason why fiber has not overtaken DSL: It simply costs too much for carriers to deploy. Running fiber over what the industry calls “the last mile” to the home costs the carrier at least $2500 per subscriber, according to the FCC, while the hybrid fiber/copper approach costs about $500 per subscriber. 

According to Ciofe, the high cost of installing fiber has slowed the growth of that technology, and until deployment drops to approximately $700 or $800 a subscriber, it’s not likely to gain much more market share. In March 2011, BusinessWeek reported that Verizon’s fiber to the home programs have resulted in an unrecoverable loss of $800 per customer.

Whether DSL will weather the storm of technological progress over the long run isn’t clear. But until carriers find a way to push down fiber deployment costs, this venerable technology is likely to stick around - and keep getting better.