1/20/98 Broadband Networking News (Pg. Unavail. Online)
1998 WL 8038593
Broadband Networking News
(c) 1998 Phillips Business Information, Inc.
Tuesday, January 20, 1998
Vol. 8, Issue: 2
WILLIAMS REENTERS TRANSPORT MARKET WITH ASCEND ATM CORE
Three years after it abandoned the wholesale data transport
market with a $2.5 billion sale of its data unit to WorldCom [WCOM],
Williams Communications [WMB] is planning a comeback. Its re-entry
into the market coincides with the all-important expiration date of
its noncompete agreement with WorldCom, and the plans are cemented by
the revelation of some $1 billion worth of long-term customer
agreements. These include a nationwide, "anchor tenant" deal with U S
West [USW] and a $260 million dollar deal with InterMedia
Communications Inc. [ICIX].
Williams is embracing an ATM and SONET strategy to handle
multiple protocols on a nation-wide network. This strategy includes a
network equipment upgrade of $150 million worth of ATM, frame relay,
and network management products from Ascend Communications [ASND].
Included on the shopping list is Ascend's recently announced GX
550 ATM core switch. (See BNN, October 14, 1997.) Williams is also
purchasing the CBX 500 multiservice ATM and B-STDX 9000 multiservice
frame relay switches. Along with other ATM and frame relay switches,
the platforms will support more than two million connections, over 10
million cell buffers, and data rates from less than DS-0 to OC-48 (2.5
Gbps).
Although Williams recently signed up for $300 million worth of
Nortel [NT] SONET transmission equipment in September, the company
went with Ascend for the ATM core switches. "We try to deploy the
best technology available today for each piece of our network,"
explains Howard Janzen, president and chief executive officer of
Williams' communications group.
...The Low-Cost Player
Williams will offer capacity for half the cost of legacy players
for comparable services. "We're building a network that operates at
the lowest cost point," Janzen says. He explains that Williams will
operate its network for less money and underprice WorldCom because
WorldCom is stuck with an antiquated legacy network, adding that
selling the network to WorldCom allowed Williams to move forward with
new technology on the infrastructure it had kept.
"The carriers are building what we call the 'new' public
network," says Jeff Kiel, manager of product marketing for Ascend's
Core Systems Division. "A lot of data networks are modeled after
voice networks. The end result is that these infrastructures are
really being strained. The carriers need to build a new network that
is optimized for data transport.
"Williams is a classic example of someone building a new public
network," he adds. "This is an information transport-focused network
[with quality of service], multiuser, and multiservices using ATM at
the core."
The decision by Williams to go with an ATM backbone to carry
what will be primarily IP traffic highlights one of the debates
shaping up for 1998 - the best strategy to carry IP, ATM, and SONET
traffic on one network.
Qwest, for example, is working with Cisco Systems [CSCO] and
counting on IP equipment advances to usher in an all-IP network to
carry all multimedia services. "The whole world is moving toward IP,"
says Nayel Shafei, Qwest's executive vice president, data products.
Although he acknowledges that IP routers can't keep up with OC-192
(9.95 Gbps) SONET equipment, he predicts major advancements in routing
rates this year.
"The whole world has discovered that ATM is not for the
backbone," Shafei says. He dismisses ATM as an attempt to resurrect
circuit switching and characterizes major ATM deployments as "the last
gasp of a dinosaur."
"We believe there will be significant movement to IP traffic,"
says Gordon Martin, vice president of sales and marketing for Williams
Network. "But there is also voice, data, and video traffic that can
run on high-end ATM." He concludes that "we would not articulate a
pure IP or ATM strategy," but instead would enable both with the most
efficient technology available.
"The revenue generating potential of ATM is better than double
that of IP," claims Tom Nolle, president of consulting firm CIMI Corp.
Bucking astronomical IP traffic projections, he says that as margins
on voice services fall, some 80 percent of carrier profit potential
will come from IP applications, while IP traffic makes up 40 percent
of network traffic. He sees Williams' use of ATM as a validation of
ATM's ability to balance the revenue/traffic equation.
"There are some carriers who are concerned about the cell tax,
while there are other carriers who are not as concerned because they
view there is value that IP over ATM brings that they do not have with
IP over SONET or IP over PPP," says Ascend's Kiel. "The bandwidth
management, and management in general of the networks far outweighs
any penalty in the cell tax." (Contact: Ascend Communications,
508/692-2600; Williams, 918/588-4740; CIMI, 609/753-0004; Quest,
303/291-1662)
---- INDEX REFERENCES ----
COMPANY (TICKER): Intermedia Communications Inc.; Ascend Communications Inc.; Northern Telecom Ltd.; BCE Inc.; Northern Telecom Ltd. (ICIX ASND NT BCE T.NTL)
NEWS SUBJECT: High-Yield Issuers; World Equity Index (HIY WEI)
INDUSTRY: Mobile Communication Systems; Telephone Systems; Telecommunications, All; Communications Technology (CTS TLS TEL CMT)
Word Count: 767
1/20/98 BRDBNN (No Page)
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