In one particularly upmarket London postcode, much beloved of MPs and their mistresses, locals are quietly skipping a generation. While most Britons wait to experience broadband technologies such as ADSL – high-speed internet access through copper telephone wires – the 1,058 residents of a square in Pimlico have slipped several gears and gone racing into a different future, byte by byte.

They said it couldn’t happen here. Indeed, NTL, the telecommunications operator, describes its decision to install high-capacity optical fibre directly into the select few homes at no extra cost to users as merely a “proof of concept”.

The company denies it is promoting broadband among the political elite, but admits the triallists are the “type of customer likely to use very high speed service”. All its other customers will receive broadband services over existing coaxial cable connections, which the company has spent an estimated Dollars 11bn digging up the streets to install and subsequently upgrade.

For most people, this distinction between the attractions of fibre, co-axial cable and ADSL over standard twisted copper phone lines as conduits for high-speed interactive services will seem academic.

But it shouldn’t be. The grand ambitions of many a UK media owner for broadband content are currently being brought down by the lack of high-speed connections into homes, along with such humble factors as street ducting, the location of phone exchanges and the physical properties of copper versus glass.

“It’s one of the classic chicken-and-egg situations,” says Manoj Badale, chief executive of Netdecisions, a digital consultancy.

The content providers don’t create broadband services because there isn’t the penetration into homes. The infrastructure providers are nervous about building networks because they want to see the content that is going to pull paying customers in first. And customers don’t get to see what broadband is about, so no one knows what and how much they will pay for.”

In practice, the impact of NTL’s so-called “fibre to the home” experiment will be hard to miss.

It’s the difference between the 10-fold increase over dial-up speeds promised by ADSL or coaxial cable, and one that is 20 to 200 times quicker. Alternatively, it is between a very good user experience and a great one.

For companies selling video content such as movies, sports or computer games, which perform best at 4 megabit-per-second speeds, compared to the 0.5 to 1.5Mbs typically on offer through ADSL or current cable modems, it could be the gap between viable and unviable distribution. Operators in Sweden, parts of the US, Australia and the far east have taken the plunge into fibre to the home.

Until now, no UK company has followed suit.

The reasons why are not hard to find. “It’s all about timing. The UK cable companies invested early in networks designed to deliver analogue cable television and telephony,” says Ian Vance of Amazing Communications, and former chief engineer in Europe for Nortel, the Canadian telecommunications equipment company.

“Then they upgraded those for digital television, and connection to the internet. That represents huge sunk cost. It is understandable that they are reluctant and given their cashflow, probably unable, to invest even more in providing fibre to the home.”

Telewest, the second-biggest cable operator in the UK, says the high cost of fibre components and labour mean it has no short-term plans even to trial the technology.

“It’s too expensive and we don’t see the demand for these types of speeds,” says David Keighley, group director of technology and engineering at the company.

However, both Telewest and NTL believe that the current co-axial cable can be substantially upgraded to higher speeds over the coming months. NTL will trial this in Manchester, Telewest in Birmingham.

Jerry Roest, group managing director of NTL Broadband, argues that even at 0.5 megabits per second, “always on” broadband cable will provide enough of an advance over either normal dial-up internet access or in reliability over ADSL to prove attractive. A Pounds 5m campaign through

J. Walter Thompson kicked off last week spelling out the benefits in NTL’s cabled areas via print, direct mail and billboards.

Roest says: “Our emphasis has got to be on providing the best user experience rather than the latest technology. That said, the question of providing higher speeds is always one of when, not if. If there turns out to be real demand for fibre to the home then we have the ducts to install it without having to dig up the streets again.”

Vance says experience show consumers always quickly use up whatever bandwidth is available, and then demand more. The question is how much will they be prepared to pay for ever faster speeds?

NTL’s results may show viable demand for faster services which could help dispel the gloom that has spread among commentators over fibre and broadband in general, largely caused by the slow roll-out of competitive ADSL services.

They think it’s all over. It isn’t now.

carlos.grande@ft.com

Copyright: The Financial Times Limited

A high-speed (broadband) internet connection in the home is still a luxury.

According to NetValue, the market research consultancy, there are about 11m household internet subscribers in the UK. Yet only about 70,000 of them are connected to a broadband service. Most people use dial-up connections, which offer typical speeds of up to 48kbps (thousand bits per second) and cost between zero and Pounds 15 per month.

Broadband access gives you transfer rates up to eight or nine times faster - typically about 400kbps. This promises to banish many of the glitches and long waits that make internet use so frustrating. But, with the exception of HomeChoice (see below), prices start at about Pounds 32 a month and installation can be expensive.

Nevertheless, residential broadband subscriptions are increasing.

Connecting to the internet at 400kbps means web pages load almost instantly, large files download in seconds and watching video becomes a practical reality. What's more, broadband connections are "always on". There is no dialling up and waiting to be connected. As soon as you turn on your computer you are online, and there are no phone charges. One flat fee gives you unlimited internet access 24 hours a day.

In this country, residential broadband internet is delivered by two technologies: ADSL and cable modem. Both offer the same always-on, high-speed connection to the internet and your choice will depend largely on where you live.

ADSL uses spare capacity on the British Telecommunications (BT) phone line that comes into your house. (If you don't have a BT line, your only option is a cable modem.)

Your phone service is unaffected, and you can use the phone at the same time as surfing the net and no extra cabling needs to be run into your home. An engineer will visit your house and install an ADSL modem, which you connect to a USB socket on your PC or Macintosh.

ADSL suffered some well publicised technical hitches last year, but these have largely been ironed out. According to Tim Johnson, an analyst at Ovum, the telecommunications consultancy, there are still drawbacks with the service.

ADSL is available only where BT has enabled the local exchange to provide it. The signal is also surprisingly vulnerable and deteriorates the further it travels. So, even if your house is in an ADSL area, you may not be able to subscribe if you are more than 3km away from your local exchange.

To find out if you are at least in an ADSL area, go to www.btopenworld.com. Click on "Available" and enter your phone number or postcode. A "yes" here means you should be able to sign up to any ADSL product and not just BTopenworld. "No" means ADSL is not yet available in your area.

Cable modems use a slightly different technology, which usually involves running a cable into your house from the street, even if you are already a cable TV or phone customer. Again, an engineer will visit to installa modem and you connect this to the Ethernet socket on your PC or Mac.

While most new computers have built-in Ethernet capability, if you have an older model you may need to buy an Ethernet card, which can add about Pounds 50 to your set-up costs. Ask your local cable provider if this is likely.

Two cable companies, NTL and Telewest, provide cable services to about 50 percent of households in the UK. In Devon and areas around Crawley and Tunbridge Wells cable is provided by Eurobell. The rest of the country is not (yet) cabled.

Both Telewest and NTL offer high-speed internet access (Eurobell doesn't) and each has an exclusive franchise within a particular region. Go to www.telco-cpi.org.uk/franchise/ franchise.htm to find out which one serves your area.

Cable modem internet access is roughly the same price as ADSL, although Telewest's Pounds 50 connection fee stands out as a good deal. But again there are drawbacks. Unlike ADSL, where you have a dedicated line to the local exchange, you share your internet cable connection with other people in your area. It will get slower the more people are using the internet.

Cable companies say that the slowdown will not be noticeable (the internet, after all, is full of bottlenecks) and that they are committed to "splitting the node", or doubling the capacity of the cable that serves your street if too many people subscribe.

Cable connections also have a slower upload speed. While both cable and residential ADSL offer speeds of up to 512kbps for downloading material from the net, both limit the speed at which you can upload data: ADSL to 256kbps and cable to 128kbps.

This may not matter because most net use - apart from sending e-mails, which are typically very small files - involves downloading. You may notice a difference if you intend to use your connection for videoconferencing, where data is travelling simultaneously in both directions. Even then, 128kbps should be more than adequate.

The one maverick player in this market is HomeChoice, a brand of Video Networks, the communications company. HomeChoice offers a low-cost but slower (115kbps) ADSL connection as part of its television and video-on-demand service - though you can also sign up for internet access only.

Simon Hochhauser, Video Network chief executive, says few people will now notice the difference between 115kbps access and 512kbps. This may well change, though, as the internet evolves. HomeChoice is currently limited to the London area, though the company plans expansion.

Until last month, when BT's ADSL provider BTopenworld said it would begin to support Macintosh computers, ADSL was available only on PCs. (Cable has been available to Macintosh users for a while.) Macintosh ADSL is new technology, however, and problems may arise as the service is rolled out. The other residential ADSL providers are recommending ADSL only to Mac users with "a high degree of IT awareness". So unless you are with BTopenworld (and perhaps even then), don't expect a Mac expert always to be available on the other end of the line if things go wrong. Cable, for the time being, may be the better option.

Broadband is not cheap, but it is impressive. If you can afford up to Pounds 50 a month on net access (and remember you won't pay any call charges), look into signing up. One thing is for sure: a high-speed connection will transform the way you use the net.

Copyright: The Financial Times Limited