Original Rationale
In late 1998 the DSL service model had a chicken-and-egg problem. ADSL technology had been proposed a decade earlier. Potential equipment vendors and carriers alike recognized that broadband such as cable modem or DSL would eventually replace dialup service, but the hardware (both customer premises and LEC) faced a significant low-quantity cost barrier. Initial estimates for low-quantity deployment of DSL showed costs in the $300–$500 range for a DSL modem and $300/mo access fee from the telco which was well beyond what a home user would pay. Thus the initial focus was on small & home business customers for whom a T1 line (at the time $800–$1500 per month) was not economical, but who needed more than dialup or ISDN could deliver. If enough of these customers paved the way, quantities would drive the prices down to where the home-use dialup user might be interested: more like $50 for the modem and $50/mo for the access.
Read more about this topic: Point-to-point Protocol Over Ethernet
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