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Monday, 14 January, 2002, 09:43 GMT
Will 2002 be the year of broadband?
By BBC News Online's Jane Wakefield
The year 2001 was meant to be when the internet in the UK grew up.
It was supposed to usher in connections 10 times faster than dial-up modems, and enticing multimedia applications that would make everyone in the country determined to surf at high speed.
That was the dream shared by the telecoms industry and the government, but it did not happen.
To date a mere 100,000 homes get high-speed access via ADSL (Assymetric Digital Subscriber Line), the technology expected to dominate in home broadband.
The worst of times?
The reasons why ADSL has not taken off are well documented.
Couple this with bitter wrangles between the companies offering the services and it is little wonder that broadband is struggling to take off. Add to that fear of a global recession, job cuts and the tech slump, and 2001 becomes a year most operators would rather forget.
But 2002 looks set to be a better and many net service providers are in optimistic mood.
"2002 has to be the year of broadband Britain, especially as 2001 was so very disappointing," said Matt Peacock, spokesman for AOL, one of the UK's biggest net connection firms
Since BT still controls over 80% of the copper wires that run into homes no ADSL can be delivered without its co-operation.
But in 2001 co-operation between BT and net service firms was as rare as tulips in November. In 2002, peace has broken out.
A new DIY method of delivering ADSL is seen as the best hope for consumers. It is currently being tested by BT, AOL and Freeserve and early signs are encouraging.
Last year, a shortage of engineers created a huge backlog of customers, and, with an installation fee of £150, the service was not cheap.
Now, ADSL can be delivered in a Jiffy bag. Customers will be sent a modem and installation instructions through the post for a fraction of the cost. For the service to be a success, the monthly fee of £40 will have to fall.
"We know BT is very keen to make this work but it has got to get the price down. My gut feeling is that consumers want to pay around £20 or £30 a month," says AOL's Mr Peacock.
The future of ADSL may look a little rosier but, according to analysts, it could face a fight from cable companies.
Many assumed that ADSL would dominate in high-speed home net connections. To this end a process known as local loop unbundling, which would offer rivals access to BT's network, was set up by telecoms watchdog Oftel.
But the process was beset with problems, and is now generally assumed to be unworkable in its current form.
In Britain, NTL and Telewest offer cable services and now, according to analyst firm IDC, have about the same number of users as ADSL. Fast net access by cable is also cheaper than ADSL, at around £25 a month.
If 2002 is going to be the year of broadband it may well be cable that provides it says IDC analyst Hamish McKenzie.
"Cable companies have a big part to play," he says, "They weren't expected to be at the same level as ADSL but they are and the opportunity is there for the taking."
The biggest conundrum for broadband operators keen to attract home users is how to sell the technology.
Speed alone is enough to attract techies and early adopters, but more is needed to convince the average user of the need to convert.
What missing is a "killer application" for broadband, says Mr McKenzie. If BT is to make a success of broadband it must get its hands on some of the things people can do with it.
Already it has launched music and game subscription services, but its ambitions may be bigger.
With its application for a broadcast licence due to be approved in the next couple of months, sending TV via ADSL could be just what BT needs.
There is speculation that BT could be on the verge of a partnership with ITV Digital, which has struggled to keep up with Sky in the digital TV market.
"BT could buy a stake in ITV Digital or even buy it completely," says Mr McKenzie.
BT's new chief executive, Sir Christopher Bland, came from the BBC and he has made it clear that he is determined to make broadband Britain a reality.
Whether it is DIY ADSL or cable the best advice for 2002 is to sit back and enjoy the ride. It promises to be fast if nothing else.
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