Corrections or additions?
These articles by Barbara Fox were published in U.S. 1 Newspaper on August 11, 1999. All rights reserved.
New Media, Familiar Hurdle: The Last Mile
Surf the Internet at home and you will most likely
find that your connection is poky and sluggish. Even the 56k-modems
— the biggest "pipe" available to most home surfers — can’t compare to the speed you get by using T-1
lines or fat
fiber pipes at an office.
Fiber isn’t yet cost effective for residential use for what is called
"the last mile," the industry term for the distance from the
curb to the house. Therefore, the speediest service available to most
homes now is with a cable modem at 750 MHz. Consumers are finding
that this is not enough, says David Stehlin, CEO of an Israel-based
firm, Foxcom Inc. He claims that Foxcom’s broadband fiberoptic transmission
systems can deliver 2 GHz of bandwidth, three times as much bandwidth
as the cable system can offer.
"Because of the recent convergencies in the telecommunications
industry and all the things going on the Internet," Stehlin says,
"the largest market for our type of technology is here in the
United States." Foxcom planted its flag in the United States by
opening a College Road headquarters in May, and it hopes to go public
within two years. Trials are underway now, and he predicts "significant
ramp-up" next year in such markets as New York, Washington, Dallas,
and San Francisco.
But in the race to grab market share for their brands of speedy residential
connections, other telephone companies and cable companies are staking
their claims. Foxcom’s formidable competitors include its clients
and potential clients, companies like Bell Atlantic, Bell South, and
AT&T is testing its own neighborhood broadband system, LightWire,
in Salt Lake City, and has just announced a mass deployment next
year of combined telephony, high speed data, and video for homes
around the country. Meanwhile a trade magazine, America’s Network,
quotes Bell South saying it has already brought fiber to the curb
for 200,000 homes and expects to do 800,000 homes per year, basically
to every new housing development in its area.
In contrast, Bell Atlantic has not ruled out the expensive broadband
for the far future, but it is probably still smarting from its Toms
River experiment, which used first generation broadband convergence
technology that was both too expensive and too complex. For the near
future it is rolling out a tempting option, Digital Subscriber Line
technology (DSL), and will bring it to Princeton soon.
"To have fiber in every home would take 20 years, and there is
a pent-up demand for speed today," says Jeff Waldhuter, Bell
Atlantic’s director of technology and engineering. "Fiber-driven
access technology I put in the category of being revolutionary, but
you have to dig up the streets and replace copper with fiber."
"Our objective is to make fast connections as ubiquitous as touchtone
in the northeast, and we are doing that with DSL today," says Waldhuter.
"We can have them easier and sooner with DSL, which builds on
what you have in place." Marketed as Infospeed DSL, it features
one line that combines a voice or fax line with a simultaneous "always
on" Internet connection. Including the Bell Atlantic.net access,
the residential connection costs $49.95 monthly for up to 640 Kbps, $99.95
for 1.6 Mbps, or $189.95 for 7.1 Mbps. Commercial prices start at
$65.95 plus the $99 DSL modem, and coverage in the New York area started
this month (http://www.bellatlantic.net/infospeed).
The broadband solution may take longer to become popular, but Stehlin
insists it is better. With broadband, not just two but five kinds
of transmissions can be sent on one system: direct TV, cable TV, very
high speed data for the Internet, standard telephony, and wireless.
Telecommunications companies would theoretically save money on costs
of maintaining separate systems and this savings, Stehlin predicts,
will affect success. The list of telecommunication service providers
will be winnowed down — not just to those who have the most subscribers
— but also to those who have cost-effective services.
One of Foxcom’s competitive advantages, says Stehlin, is his choice
of his first sales target: multiple dwelling units or MDUs. MDUs present
certain problems, because sellers must work with the building owners
(such as the major real estate investment trusts) as well as with
the subscribers, but the product is more economical because users
share expenses. Stehlin says that RCN is also targeting the MDUs,
"and that’s why they are taking business away from Bell Atlantic,"
but he points out that RCN uses a different paradigm. To most clients
RCN offers separate streams of voice, video, and data, whereas all
of Foxcom’s accounts have converged those services.
Stehlin cites a second way that Foxcom distinguishes itself from competitors:
It is technology transparent. Whereas a company like Lucent Technologies
might want to promote a particular protocol to encourage universal
adoption of that protocol, a small company like Foxcom needs to make
any and all protocols work.
The consumers’ preference for wireless phones could also contribute
to Foxcom’s success, because it is patenting ways to integrate wireless
voice with wireline data and video. "The great majority of users
are going to a wireless product," says Stehlin. The Foxcom solution
would integrate the wireline pipe going to the home with a wireless
base station that can transmit to the handset no matter where the
Stehlin was hired to grow the company, replacing company founder Howard
Loboda, who is now the chief technical officer, based in Israel. The
firm has more than doubled in size, growing from 3 to 18 employees
since May. It will be hiring in the areas of sales, marketing, finance, and technical support over the next year. The
Jerusalem office handles
research and development, but advanced R&D and testing operations
are here in the 6,000-foot office and laboratory at 600 College Road.
Foxcom has more than 50,000 subscribers in more than half of the states,
and its client list includes GTE, Midatlantic, Hughes, DualStar, and
Pan Am Sat, plus the pairing of Southwest Bell with PacTel that is
now known as SBC. The second round of funding has been led by CIBC
Capital Partners, the venture capital arm of Canadian Imperial Bank
of Commerce, the second largest bank in Canada, says CIBC’s Teddy
Stehlin grew up in Cranford, where his father managed an insurance
company, and his mother was a reporter for a daily newspaper. He won
an appointment to the U.S. Naval Academy partly based on his achievements
in track. "When I was a kid I was always small and thin, my confidence
was internal not external," says Stehlin. "The academy taught
me to expect more out of myself. I realized I could do anything I
wanted to do and go as far as I wanted to go. I got exposed to high
quality people; you realize it’s a big world out there and there are
a zillion options. I used academy time to reinvent myself."
He did well. Upon graduation in 1979, and as the only Marine officer
sent to the Infantry’s rigorous Ranger training, noted for
its sleep deprivation component, he graduated first in his class.
After five years of traveling around the world, he retired from active
duty but stayed in the reserves. He worked for various fiberoptic
companies and just when he had landed a job as CEO at a New Jersey-based
fiber optics company, Keptel, he was called back to serve for six
months in Desert Storm. In nine years at Keptel he dramatically increased
the company’s revenues through product line growth and customer expansion.
He and his wife live in East Amwell where she home-schools their four
The Marines, maybe more than other services, try to do more with less,
says Stehlin. "They get what’s leftover. As CEO of a startup I
have to do so much that big company CEOs don’t do. My biggest challenge
is hiring great people and I am very excited about that."
The name choice? "We wanted to be fast, nimble, and clever. Fast,
by quickly understanding what the market wants. Nimble, because we
focus on concurrent engineering, not one step at a time, since technology
is moving so fast. And clever — by not going head to head with
big competitors but by going where they are not."
David S. Stehlin, CEO. 609-514-1800; fax, 609-514-1881. Home page:
— Barbara Fox
A new, fast connection to the Internet may not be the
answer after all. The "old standby" speedy links, the T-1
lines, have been available for a decade, but many good-sized companies
don’t have one.
"There is a reason why companies who can afford it haven’t bought
infinitely large capacity," says Steve Sashihara, founder of
Consultants, an information technology management consulting firm
on Research Way (http://www.princeton.com). His company was
an early user of shared T-1 lines and has had a dedicated 1.5 megabit
two years, yet he has had some very slow connections to popular
magazine sites. "It is sort of like having the only video phone.
When you move to a dedicated T-1 line you realize you are waiting
for the remote server to cough up the goods."
Full motion video, Sashihara predicts, will be what is ushered in
by broadband. Current alternatives include cable modems (up to 1.28
integrated service digital lines (ISDN, 128 Kbps), and digital
(DSL, up to 7.1 Mbps).
Cable is a better deal for homeowners, says Sashihara, who can get
cable modems for $40 per month, whereas Comcast would charge his
business $1,000 for the same modem. In comparison, his dedicated T-1
line costs $1,400 per month, including the Internet connection and all
voice telephone charges.
Cable has a security problem, and both cable and ISDN lines are
to delays when too many users log on.
As for DSL, its speed varies according to how far your building is
from the central station. "We will wait to see what comes to our
building cheap," says Sashihara. Because his firm is hosting web
servers, he has real concerns about reliability. Therefore, if he
bought DSL he would keep the T-1 line until DSL proved itself. Says
Sashihara: "If it is not reliable it’s not worth anything."
Thanks for the article! One BIG mistake is you basically characterize Foxcom as a competitor to companies such as Bell
Atlantic when in fact they are a customer of ours. Foxcom is a manufacturer of product not a =
service provider. Other than that we appreciate the story.
Corrections or additions?
This page is published by PrincetonInfo.com
— the web site for U.S. 1 Newspaper in Princeton, New Jersey.