Interesting ZD Net article....FYI.... DD
Talking DSL: Something To Shout About
By Carol Wilson, February 25, 2000
<!--Only a year after systems to put voice services onto Digital Subscriber Line transport first hit the scene, this new technology is already being deployed, and it promises to have a major impact on local service competition.-->
The telephone network may never evolve at Internet speed, but one new voice technology is streaking into the market at a Moore's law pace. Only a year after systems to put voice services onto Digital Subscriber Line transport first hit the scene, this new technology is already being deployed, and it promises to have a major impact on local service competition.
Voice-over-Digital Subscriber Line adds derived voice lines onto a copper loop that is DSL-enabled, so a single phone line can carry up to 16 separate voice channels and a high-speed data connection, all simultaneously. By cramming so much service onto a single copper line, VoDSL threatens to reshape the economics of providing services to small to midsized businesses ? already the target market for most local competitors.
But the story doesn't end there. A new generation of VoDSL technology also holds promise for incumbent telephone companies, which would like to reap more revenue from their residential markets. By adding protection for "lifeline" voice service ? network powering that keeps phones ringing during power outages ? VoDSL equipment providers are paving the way for the Bell companies and others to use their technology in areas where they are running out of copper phone lines.
The VoDSL market is attracting widespread attention from a broad range of carriers, such as cable and wireless players, and a growing list of equipment manufacturers, including some integrated access system makers that see VoDSL as the next phase of their market plans.
"We've made integrated access devices for T1 [1.5-megabit-per-second] and E1 [2-Mbps] links," says Fab Gosal, senior product manager for the E-link VoDSL access device at Vina Technologies. "All of a sudden, having convergence over the copper line becomes even more compelling given that copper lines are more available than T1 and E1 lines."
Talking DSL: Something To Shout About
A Question of Resources
Copper line availability is also the key factor very quickly driving local competitors that have been providing voice service into the VoDSL market.
The benefits of VoDSL are so tremendous that using this relatively new technology is almost a no-brainer for Mpower Communications, a local voice services competitor with operations in California, Florida, Georgia, Illinois and Nevada, says John Boersma, Mpower senior vice president of engineering and network operations.
"This improves our economics tremendously," Boersma says. "Take a business customer with eight phone lines. Today, we have to rent eight separate unbundled loops from the phone company. With VoDSL, we rent probably two loops and provide the same kind of voice service, without the same cost, plus we can offer them a high-speed Internet connection, which we couldn't do before."
Mpower, which reported a 211 percent increase in revenue in the fourth quarter of 1999 over 1998, has deployed VoDSL using DSL equipment from Copper Mountain Networks and voice gateways from TollBridge Technologies in all of its markets, Boersma says. The company is furthest along in its VoDSL deployments in San Diego, Las Vegas and south Florida, he adds.
Mpower's primary focus is to use VoDSL to offer a comprehensive package of services ? local voice, long-distance voice and high-speed Internet access ? to businesses that couldn't otherwise afford an integrated service. "The economics are very strong for us and for our customers," Boersma says.
Even so, higher profits on lower costs are not the top benefit of VoDSL for local competitors, according to Boersma and others.
"The No. 1 benefit for us is that we get complete control over the customer acquisition process," Boersma says. "Instead of waiting for a telephone company technician with a piece of paper in his hand to cut over our customer, we can control that process.
With VoDSL, once the competitor has acquired colocation space in a telephone company central office and has deployed its network gear ? including a DSL Access Multiplexer (DSLAM), an Asynchronous Transfer Mode (ATM) network and a voice gateway ? it can order an unbundled copper line from the incumbent telephone company and get all services up, running and fully tested before turning them over to the customer.
"We go out and install the integrated access device [IAD], we turn up their data circuit, we make sure the voice lines are working ? we're not standing around, waiting for any other carrier," says Ed Marcotte, president of Rio Communications, which will begin putting VoDSL gear from AccessLan Communications and CopperCom into place next month to launch service in April in four cities in Oregon.
The biggest headache today for local competitors is worrying about problems in the way an incumbent moves a customer's voice service from its network onto the competitor's network, Boersma and Marcotte say. Very often, problems aren't discovered until the customer's service is supposedly switched over, but then surprisingly doesn't work.
"We devised a process that allows us to control conversion of customers step by step," Boersma says. "And only after we know everything is up and running do we convert the customer. No one has been able to get that level of quality out of the incumbents."
Other advantages to bundling services onto a single delivery system include the efficiency of operating one network, and the ability to automate the systems that handle provisioning, billing and maintenance of that network, says Eric Andrews, vice president of marketing at Turnstone Systems, which makes equipment that helps companies manage, test and monitor their DSL loops.
Because the business case for VoDSL is so strong, competitive local exchange carriers that have been offering voice service are willing to move quickly into VoDSL, says Ken Kolderup, director of marketing at Jetstream Communications, which makes voice gateways for VoDSL networks. "We're calling them ICPs, or integrated communications providers, for lack of a perfect name," says Kolderup, whose company has publicly announced four customers, all smaller voice competitors, for its gateway products.
"There are three truths about this market," Kolderup says. "It's about small business, that's where everyone sees the opportunity. It's all about bundled services ? competitive carriers realize in order to win business they have to have a price that will make people want to switch. And it's all about broadband ? they don't want to have to operate parallel networks for cost reasons."
ICPs are in the best position to offer VoDSL "because they own all the pieces of the network," says Jennifer Stagnaro, vice president of marketing at CopperCom, which makes VoDSL gateways. "They own the Class 5 switch and the ATM network and the IAD ? these are critical pieces."
Because a single copper line can be used to support multiple services using VoDSL, the competitor may not even have to have a new line installed, as data-centric DSL providers most often do today for their DSL-based services, according to Rio's Marcotte.
"Most businesses have at least one phone line that we can use already in place," Marcotte says. "Otherwise, we have to order a line and wait for up to 10 weeks. The DSL product really does cut our time to market dramatically vs. the traditional circuit that we have to wait on the incumbent to deliver."
Data competitors also are running VoDSL trials, with plans to expand what they offer ? but they face a different challenge, says Agnes Imregh, vice president of marketing at TollBridge. "Voice competitors are familiar with the voice infrastructure and already have the Class 5 switches in place," she says. "Data competitors will take longer because they have more to learn. I think that's why many of the data companies are looking to partner with voice companies to offer the services."
Current partnerships in the VoDSL arena include Rhythms NetConnections with MCI WorldCom, Covad Communications with GST Telecommunications and NorthPoint Communications with Focal Communications.
Other likely players to enter the VoDSL arena include the long-distance carriers. MCI WorldCom announced a VoDSL component to its On-Net service in January. The company is using gear from Accelerated Networks that incorporates an ATM network's Switched Virtual Circuits (SVCs) to offer voice that simplifies service provisioning and network configuration, says Kevin Walsh, vice president of marketing at Accelerated.
"If VoDSL is going to be a mass-market service, then companies will have to provision tens or hundreds of thousands of end-points, and that will require a Switched Virtual Circuit solution," Walsh says. Most DSL providers now use ATM Permanent Virtual Circuits to connect their DSLAMs, and then engineer their networks to support a level of concentration that they believe is required to provide voice and data.
"With SVCs, you don't have to preconfigure the network, and you can add services later as required," Walsh says.
Sprint is also offering VoDSL as part of its Integrated On-demand Network, although company officials decline to identify which vendors they are working with.
But all this activity by competitors doesn't mean that VoDSL is passing by the Bell companies and other incumbents. In fact, it may be doing just the opposite.
"I believe that everybody's natural conclusion with these services is that this is another tool for the data competitors to go beat on the incumbents with," says Kenny Van Zant, executive vice president at BroadJump, which makes software to help DSL service providers streamline installation and offer advanced services. "Only recently has the logical conclusion become accepted that the incumbents could deploy that technology even easier than the competitors can, since they always own the local loop."
Most industry observers expect the incumbents to target the residential market, however, and not the small-to midsized-business market.
"That's where their DSL deployment is targeted, and that's their greatest growth opportunity," says Brendan Mills, president and chief executive of General Bandwidth, which developed an IAD that offers multiple voice lines and faster Internet access over a DSL line, but defaults to a conventional network-powered voice line if commercial power fails.
Incumbents face copper exhaust in some older neighborhoods and don't want to invest the $1,000 to $2,000 involved in deploying new copper, Jetstream's Kolderup says.
By using VoDSL technology, however, an incumbent can offer customers more for less ? such as multiple voice lines, each with its own set of services, Mills says. As homes need second, third and fourth lines for Internet access, home-office use or additional voice service, VoDSL offers a cheaper and better way to meet that demand, he says.
To date, only SBC Communications ? with its Project Pronto, which was announced in November 1999 ? has publicly admitted plans to deploy VoDSL, but vendors say all the Bells are looking carefully at their options.
"Mentally, it is going to be more difficult for an incumbent to make the leap that not just new data services have to be governed by new rules of provisioning, but also cash-cow voice services," Van Zant says. "But we don't see many providers in denial about that. They are trying to pull those pieces together. It just takes them a little longer |
