Telco Pricing Plans Threaten ISDN
As new technologies emerge, the market questions the
cost-effectiveness of ISDN
By Joe Paone
Even as 56Kbps modems, multimegabit Digital Subscriber Loop, and other new
data-communications technologies emerge, most observers say network managers and
end users should still consider investing in 128Kbps ISDN.
ISDN technology is solid but other questions about it are coming up.
The most important are how much the service will cost in six months or a year and
whether regional Bell operating companies (RBOCs) intend to offer other technologies
at more-competitive rates.
For many residential users, ISDN technology remains too expensive and too difficult to
procure from the phone company to be worth the hassle. On the other hand, analog or
the new analog/digital hybrid 56Kbps modems require neither interaction with nor
special service from the telephone company.
Instead, ISDN is booming in the business market as an alternative to T-1, 56Kbps
leased lines, and frame relay, say observers. "ISDN deployment in the United States is
mainly from the corporation to the [telco] central office, and then it stops," says Brad
Baldwin, director of remote-access research at International Data Corp. a
market-research company in Mountain View, Calif.
Baldwin says most telecommuters don't need the 128Kbps speed that ISDN provides
and won't want the hassle and expense of procuring an ISDN line. But many
companies in industrial centers are using ISDN to concentrate dial-in traffic at their
remote-access servers. The service is also being used to connect branch offices.
A Question of Need
A switched dial-up service, ISDN provides a cost-effective alternative to permanent
connections such as frame relay if data transmission between offices is sporadic. And in
offices where transmissions are more constant, ISDN can serve as a backup if a
frame-relay link goes down.
ISDN is receiving less hype from telcos these days and still isn't easy to procure. Yet
the technology retains unique benefits and characteristics that 56Kbps and multimegabit
Digital Subscriber Loop (xDSL) can't provide.
ISDN Basic Rate Interface (BRI) consists of two 64Kbps B channels and one
16Kbps D channel for signaling. The B channels can be used in a versatile manner.
They can be combined to send or receive 128Kbps of data, or they can be used
separately, one channel transmitting data while the other sends or receives a fax or a
phone call.
ISDN Primary Rate Interface (PRI) consists of 23 64Kbps B channels and one
64Kbps D signaling channel for T-1-like 1.544Mbps. PRI can be used by
corporations and ISPs (Internet service providers) to concentrate dial-in traffic.
ISDN has up to now been difficult to install. Now that progress has been made in this
area, pricing is the new hot button of controversy.
Some RBOCs originally rolled out residential service at low introductory rates, only to
find minimal demand. As a result, many of the RBOCs want to do away with flat-rate
pricing and meter the service with per-minute charges.
The telcos claim that with flat rates many users leave the service up 24 hours a day,
thereby clogging their networks.
Telcos are seeking permission to raise rates, only to find in many cases that the state
utility commissions won't cooperate.
Pacific Bell, for example, recently tried to double its ISDN rates, says IOC's Baldwin.
It didn't get what it wanted, and David Dorman, CEO of Pac Bell, told reporters that
the RBOC might back off from the service because it can't turn a profit selling it (see
"ISDN Again on Shaky Ground," Feb. 17, Cover).
Reaction to Dorman's comment was strong. Pac Bell was "acting like a drug pusher,
getting people hooked on the technology, then raising prices," says Baldwin.
Similar anger erupted in February in BellSouth Corp. territory as the RBOC instituted
metered pricing for ISDN.
Taking advantage of flat rates, many companies were using ISDN as their connection
to their ISP, which meant that their connections were often up around the clock.
BellSouth had charged $95 a month for unlimited ISDN service for years, according to
Bill Tidwell, president of Digital Service Consultants Inc., an ISP and consultancy in
Atlanta.
Now that the service is metered, it can cost around $800 a month for businesses that
want to use it constantly, says Tidwell. For $95, users get 360 hours per month; after
that it's 1 cent per minute. (Existing lines are grandfathered and unaffected by the new
rates.)
Tidwell says ISDN use in Georgia was taking off, but he believes the new rates will
scare away many potential customers. "The reason it was prevalent was that it was
easy to order and there was standard pricing," he says. "With this pricing, no one's
going to use it."
Tidwell adds that if new customers are concerned about ISDN pricing, he's "going to
tell them to switch to 56Kbps modems."
In Bell Atlantic Corp. territory, where the head of the RBOC recently declared 1997
"the year of ADSL [asymmetric DSL]," there is a different ISDN problem: The telco
seems to be consistently overbilling customers. It fixes errors when they are
questioned, but the problem keeps happening, say users.
"Ever since last May, Bell Atlantic has been unable to bill ISDN service correctly,"
says David Lesher, an ISDN-using engineer/consultant in the Washington area.
"They've been passing out refunds willingly, but it's a monthly hassle for many users."
Meanwhile, in some other regions, ISDN service and help from the phone company
are notoriously poor. In Manhattan, for example, disgruntled customers have built a
World Wide Web site (http://www.nynexsucks.com) to air complaints.
US West Inc. has been considered a lackluster ISDN provider in many quarters. Now
it is throwing major weight behind high-bit-rate DSL (HDSL) services designed for
connecting offices at rates from 128Kbps to 704Kbps.
In the End
All of these factors show ISDN to be a service with pricing that is still unpredictable
and with fickle support from some phone companies. The fact that telcos have invested
many millions of dollars in ISDN deployment means the service is here to stay, but
future development efforts are in question.
To home users however, ISDN can be a godsend. "ISDN can be a royal pain to get
running," says Lesher, "but once it is, it ticks along with little grief."
He and others express concerns about the emerging alternatives. "I will believe in
xDSL when it knocks on my door, at rational tariffs. Until then, it's smoke and mirrors.
It's taken them a decade to get ISDN deployed. Do you really believe xDSL will be
where you need it tomorrow?"
Like many others, Lesher wonders about the efficacy of 56Kbps modems. Still, he
believes they will attract many users who would have been drawn to ISDN, mainly
because of economics.
"The 56K threat [to residential ISDN] is precisely due to the RBOCs' mania for
per-minute ISDN rates," he says. "I predict that [56Kbps modems] will cut into ISDN
in states such as Bell Atlantic's where residential ISDN is per-minute."
Baldwin, who maintains that 56Kbps modems will work well for all but the most
bandwidth-needy telecommuters, says corporations should continue to hook up
remote-access servers to ISDN without fear.
His only caveat is to buy remote-access servers that support technologies other than
ISDN, such as T-1 and frame relay, just in case ISDN service gets too expensive or is
not supported well enough.
Still, if 56Kbps modems should be a letdown and xDSL proves a mirage, ISDN will
be there as the somewhat-difficult old friend but proven performer.
"The equipment is out there now," says Lesher. "It's not going away. If it makes
[financial] sense, there is little to gain by waiting." |
