From CNET NEWS.COM:
 Cost concerns moved modem standard
 By Jim Davis
 December 5, 1997, 4:00 p.m. PT
 update A tentative agreement reached yesterday on a standard for 56-kbps
 modems may have come about because of increasing financial pressures on
 vendors and modem chipset makers.
 Fortunately, consumers won't be forced to choose between competing
 standards anymore.
 A concern that has cast a pall over the 56-kbps modem market is the
 potential inability to use a 56-kbps modem with an Internet service
 provider because the provider does not support one of the two competing
 standards. Consequently, a number of vendors have suffered poor financial
 results.
 Vendors and observers report that a tentative agreement has been reached
 on which technology will be used in 56-kbps modems. The accord was
 reached at an industry association meeting in Orlando, Florida.
 The agreement should bring much of the jockeying to an end by modem
 makers, who were trying to get significant
 portions of their technologies included in the standard in order to
 increase royalty payments from future sales of the standard-based modems.
 As it stands, Rockwell (ROK), 3Com (COMS) and Motorola (MOT), among
 others, decided that the long-term harm to the industry from the absence
 of a standard outweighed individual financial concerns, according to one
 industry analyst.
 The upshot is that a preliminary, or "determined," standard for 56-kbps
 modems is likely to be decided at the January meeting of the
 International Telecommunications Union. A determined
 standard is the step required before a final official standard can be
 issued.
 All major modem manufacturers have been offering modems that can deliver
 data at 56 kbps, or about twice the speed of widely used 28.8-kbps
 modems.  But without any technology standard, modems using U.S. Robotics'
 x2 technology don't interoperate with modems based on Rockwell and
 Lucent's (LU) K56flex modem technology. The agreement sets the stage for
 vendors to release modems that can work together.
 "Given the aggressive vendors involved, prestandard 'V.pcm' modems
 will likely be available very quickly after the end of the ITU meeting in
 February," according to Ken Krechmer, editor of Communications Standards
 Review in an email to CNET'S NEWS.COM. "V.pcm" is the name of the
 standard for 56-kbps modems.
 Modem makers are likely to be pleased with the agreement, which should
 help sales of modems. "We're very excited about this decision and believe
 that the ratification of a worldwide standard will end the market
 fragmentation that has until now hampered 56-kbps modem adoption rates,"
 said Vijay Parikh, vice president and general manager for Rockwell's
 personal computing division, in a statement.
 Parikh added that current K56flex-based modems will be upgradable to the
 eventual standard.  Even if consumers don't upgrade their modems, they
 will still work with ISPs that use K56flex-based equipment, he noted.
 3Com may benefit the most from the standards process. Not only did a
 significant amount of its technology end up in the V.pcm standard that
 will be presented to the ITU, but also the standards should help modem
 sales significantly since its U.S. Robotics unit is the leading modem
 brand in the retail marketplace.
 In April, U.S. Robotics had to halt shipments of modems for a significant
 period of time in order to reduce inventory at retailers, according to
 documents filed with the Securities Exchange Commission. Recently, 3Com
 said that it has reduced the inventory level held by channel partners and
 revised its inventory practices, moves which will impact its second-
 quarter 1998 earnings. The company now hopes that a standard will help
 offset the negative charges.
 "Our feeling is that we will be shipping standards-based modems during
 the first quarter of 1998," said Neil Clemmons, vice president of
 marketing for 3Com's personal communications division. He added that 3Com
 expects all standards-based modems to be able to dial in to ISPs with
 either x2 or V.pcm technology in order to prevent disruption to ISPs
 service rollout plans.
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