20/20: Network Visions for 2002 and Beyond - part 1 of 2
from: telecoms-mag.com
The go-go capital outlays of the late '90s are a memory; the buzzwords now are a return to normalcy. Service providers haven't completely snapped their wallets shut, but the emphasis for the near-term will be on controlled spending as they look for ways to grow revenues. But spend they will, to the tune of about $80 billion in 2002, according to a recent poll of 30 service providers by UBS Warburg. Read on to find out where those expenditures will go...
The Telecommunications ® Staff
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Dana Crowne
CTO
Allegiance Telecom
After the heavy lifting of network construction come the finishing touches. For CLEC Allegiance Telecom, that means signing up existing customers for more types of services, such as IP VPNs, Centrex services or managed services like security and Web hosting.
Having completed its planned expansion of an MPLS (multiprotocol label switching)-based backbone, along with SONET rings around 36 metropolitan markets, the Dallas carrier now seeks to move beyond its basic range of telecom services, from local and long-distance to Internet access and Web hosting services, to provide more sophisticated offerings.
The provider has taken what CTO Dana Crowne calls a cookie-cutter approach to geographic expansion, employing a "smart build" philosophy to first employ leased facilities upon entering a new market, then deploy its own network after building up a solid base of customers.
The company may not have waited until each market was actually profitable before moving onto the next, but it certainly made sure that internally generated cash supported at least part of its growth.
To date, Allegiance has focused on serving small to midsize businesses. But such companies tend to shy away from cutting-edge technology-the kind that Allegiance wants to offer over its network. So the carrier says it now aims to focus on large businesses as well, regarding them as prime users for IP VPNs, IP Centrex, and managed services for firewall, database administration, security and more.
"We've built the asset, we're a big part of the PSTN and the Internet, we've got a scalable infrastructure and the right geographic footprint, and now it's time to evolve," says former MFS Communications executive Crowne, who adds the company is currently at a key juncture. To continue growing, Allegiance must offer more advanced services to existing customers, plus expand its customer base-hence the focus on larger companies.
To deliver more advanced managed services in areas such as security, Allegiance will form partnerships with other companies and take advantage of their more specialized expertise. OSS is another critical component in delivering value-added services, and Crowne says Allegiance continues to develop software in house to enable the company's back-office system to provision and manage the delivery of more types of services to a growing number of customers.
-Ted McKenna
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Russ Wiseman
Senior Vice President Internet Operations
Nucentrix Broadband
If you want proof that the desire for broadband access is not just in Tier 1 cities take a look at Carrolton, Texas-based wireless broadband access provider Nucentrix Broadband. Although the lion's share for fixed wireless access has been with Sprint, which recently put its program on hold, and WorldCom, Nucentrix is moving quickly. Founded in 1994, Nucentrix provides IP service and video to small and midsize customers in both the 2.1-GHz and 2.5-GHz bands. In addition to holding 200 MHz of spectrum in these bands, the provider also holds 20 MHz of spectrum in the WCS (Wireless Communications Spectrum) band.
Nucentrix provides 1.5 Mbps access, e-mail and Web-hosting services. In June, it received FCC approval to launch two-way service in 57 markets, reaching over 1.9 million households. In addition to fixed wireless data broadband services, it also provides wireless cable service under its Heartland Cable operation.
Nucentrix is deploying first-gen hardware from Hybrid Networks and evaluating second-gen technologies. With time to profit knocking at the door, Russ Wiseman, Nucentrix's senior vice president of Internet operations, understands that the access platform alone isn't the sole differentiator, but that a converged voice/data/video offering will be key. Nucentrix is evaluating next-gen wireless vendors based on a number of common characteristics: non-line-of-sight, self-installable CPE, voice delivery, and portable/mobile capabilities. Wiseman recognizes that many proposed technologies still have a ways to go before defining a solid business case. Most emphasis has been on multicarrier modulation solutions that are either OFDM or WCDMA-based technologies from companies such as BeamReach, Cisco, NextNet, Navini, Soma Networks, IP Wireless and even Qualcomm with its HDR (high data rate) solution.
"It would be nice to get a complete integrated solution from any of the new players, but that's not realistic, because this story has multiple components," Wiseman says. "Given the limitation of single-carrier solutions, you have to bring a solution with a sensible business case that delivers material improvements over single-carrier and has the ability or is moving down the path toward a standards-based platform that is supported by one or two major carriers."
Nucentrix recently wrapped up a technical and business trial of Cisco Systems' VOFDM (vector OFDM)-based WT 2500 multipoint wireless broadband system, where it was delivering high-speed Internet access to 125 business and consumer customers through Amarillo, Texas. This trial also included VoIP testing. According to Wiseman, the provider must still resolve some generic concerns about the VOFDM platform, but the trial will end soon. Nucentrix will discuss the results publicly over the coming months.
Nucentrix now has even more opportunities, since the FCC took the MMDS/IFTS spectrum off the table for reallocation. The decision also allows MMDS holders to use it for portable and possible mobile applications. "The question becomes: Do we take advantage, how and where," Wiseman says. "The short-term impact is that high-speed mobile technologies are still immature, so for the next few years it may not have much impact. However, as the industry evolves, we have the flexibility to play in that space without changing our vision to provide broadband services."
-Sean Buckley
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Ray Smets
Vice President Network Transformation
BellSouth
Q. What have you learned during your first year of being responsible for the network transformation of one of the oldest and biggest networks in the country?
A. This was clearly the year for Internet call diversions, leveraging your packet network to support Internet traffic and off-loading your circuit network-essentially transforming the economic model around circuit switching. Next year we see that moving into the Class 4 level of switching networks where it makes sense to do that, and in 2003 we see it moving into the Class 5 area.
As a sister project, we're out looking aggressively for an MPLS solution so we can produce an IP core in our packet network, in our data network. In addition, we clearly see the need for broadband Ethernet services in the metro, we see the continued evolution of interest in off-site storage and metro-wide connectivity, and we have pursued metro-optical solutions aggressively to get us there.
The challenge is looking less at the technology evolution and more at the economic evolution of metro-optical. Where DWDM technology exists and where it makes good economic sense for us to use it, we do, with both passive and active DWDM systems. In terms of a full metro-optical, feature-rich set of services, we think it will make economic sense in the metro in the latter part of next year and into 2003.
We're pursuing next-gen SONET initially, then ultimately augmenting it with a metro DWDM solution. We use passive DWDM systems that we codeveloped with JDS Uniphase, for example, but I think the industry is settling on architectural decisions, and we're closing in fast on a direction to adopt.
Q. What are some specific initiatives for improving your legacy networks and services as 2002 begins?
A. We're actively pursuing an MPLS solution, and we intend to introduce IP as well. We see it as an evolution of our existing ATM networks. We want to make sure we continue to meet the coverage and capacity demands we have in the frame relay and ATM space; that's quite a growth engine for a company like BellSouth. We're creating what I call Trojan horse opportunities for new network elements that are improving the capacity and economic model of existing services. This allows us to tap into emerging applications, such as network-based firewalls and IP VPNs. In terms of our broadband gateways, the Shasta/Nortel solution was an aggressive introduction of new technology for us this year, and it happened at the right time. We timed it perfectly getting it in, and we'll do more of that.
-Jared Bazzy
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Dr. Hugh Bradlow
CTO
Telstra
As CTO of infrastructure services and wholesale for one of the fastest-growing global carriers, Dr. Hugh Bradlow's crystal ball might as well be the globe itself. From the company's headquarters in Melbourne, Australia, Bradlow has a bird's eye view of technological trends as they develop around the world.
"Globally, I think everyone is looking for opportunities to use existing infrastructure rather than to race out and deploy new infrastructure," Bradlow says. That's no small feat for carriers and service providers getting crunched by slowing economies and increased demand for quality. "There's no doubt the greatest challenge will be driving security, scalability and reliability into the IP infrastructure," he says.
For instance, while buzz continues to be heavy around 3G futures, Telstra will work this year with its existing 2.5-GPRS network and consider whether or not to use 1XRTT with CDMA. These wireless network enhancements will enable the growth of mobile applications and spur new ones, he says. "A whole batch of applications are emerging based on SMS (short messaging service) and those will migrate to the 2.5 technologies, which will simply improve performance rather than change the application."
Bradlow says Telstra will also deploy IP VPNs for business in 2002, build out its rapid data network based on MPLS (multiprotocol label switching), continue to extend its switched data network based on ATM, and expand its use of unified messaging and voice portals.
"I think broadband Internet access and IP VPNs will be pretty universal. Mobile data will have far greater emphasis in the Asia-Pacific area-and possibly Europe-than in the United States, whereas things like unified messaging and voice portals will be far more important in the United States than in Europe or Asia."
With an eye beyond 2002, Bradlow says he expects Gigabit Ethernet to take off. "From an infrastructure point of view, I think RPR (resilient packet ring) is the coming technology for the all-optical network. Equipment manufacturers will overcome the problems that all-optical networks have had to date, namely the inability to detect and recover from faults," he says. Other technologies Telstra will have under research in the coming year include interactive TV, IP QoS and photonic circuits.
-Jared Bazzy
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Carlo Lalomia
CTO
IntelliSpace
Broadly speaking, IntelliSpace falls into the fast emerging category of Ethernet-based MAN providers. Its bread-and-butter service is delivering high-speed Internet access, but the company, at this time, has little interest in the developing 10-Gbps Ethernet technology. Instead it's more focused on MPLS (multiprotocol label switching).
"Of the new technologies we might be able to take advantage of, the one that most intrigues me is MPLS encapsulation," says Carlo Lalomia, IntelliSpace's CTO. He is referring to the Martini draft, an effort being pushed in the IETF by some of the same people who worked on MPLS specifications that would allow for encapsulating and tunneling any Layer 2 traffic, for example Ethernet, across an MPLS network. Another way of looking at this is as a mechanism for Layer 2 VPNs in which the MPLS network provides the virtual channels via LSPs (label switched paths). "One vision we share at IntelliSpace is for every customer to have its own LSP," Lalomia says.
If the expected trend toward outsourcing applications and storage pans out, Lalomia believes there will be an increasingly greater effort to define services in terms of SLAs. Customers, he says, may want per-application QoS that MPLS could offer. For example, a customer with an Ethernet connection to the network might use a particular LSP to access an ASP (application service provider) and another LSP for connecting with a network storage provider.
Perhaps oddly for an Ethernet MAN company, IntelliSpace views the emerging 10-GigE technology as overkill for inter-POP connectivity, at least for now. Further, 10 GigE offers more bandwidth than what IntelliSpace's customers need, not to mention the lack of ubiquity of dark fiber to connect them. IntelliSpace anticipates being cash positive by mid-2002. It has about $110 million in funding and currently provides services to about a thousand buildings, approximately half of which are in the New York City area.
-Sam Masud
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Mark Kelly
CTO
Leap Wireless
Q. How will Leap expect to grow in the next year?
A. Because we don't need to interconnect to a larger network for roaming, we can roll out our networks like IHOPs. We don't need a nationwide spectrum license, just another market and to build out. Our model is standalone, but of course we benefit from economies of scale when we make handsets available. We'll have more than 1 million subscribers in 35 markets by year-end.
Q. As a CDMA-based wireless provider, what will impact your network?
A. Three things will make current capacity per unit of bandwidth and spectral efficiency go up 3X: 1XRTT, selectable mode vocoders and smart antennas. Qualcomm's new handset technology, for example, puts receive diversity in the handset. Rayleigh fading at 1900 MHz is at about 6 inches apart. If you can separate even half of that, you pick up 3 to 6 db in performance.
Q. Where is Leap in terms of 3G migration?
A. By using Lucent ModCells, we can easily upgrade to 3G via new software and 1XRTT channel cards, which will double our voice capacity from 19 up to a 30-factor per-frequency level. This requires 1XRTT-based handsets, which we'll put on the market in 2002. In most markets, we will redeploy 95-A cards in areas where there's not much capacity need. We already have a technology evaluation market trial underway for 1XRTT.
Q. How do you view alternative air interfaces?
A. Anytime you change the air interface, you struggle. Leap doesn't have enough customers to make a wholesale change. To that end, we want equipment with the lowest-cost and highest reliability and something fairly along the learning curve in terms of technology and production. If GSM could handle more capacity economically, it might be a better solution, because it is five years farther along the curve.
Some of these solutions are very novel, but it would be irresponsible of me to recommend something else unless it's 10X better. Could it evolve? It possibly could in another band, and if there are applications that can't be met by current air interface technology. Most likely, some intellectual property would get woven into an existing standard. Both Tantivy and LinkAir are members of the TIA and the CDMA development group.
Q. Given the expense of new cell sites, what's your take on smart antennas?
A. I consider smart antennas wireless' final frontier. If you look at modulation and coding, 1XRTT has gone as far as it can go, and I can't see huge evolutions unless you go to higher order modulation. A selectable mode vocoder will bring voice coding to its limit from 8 kbps down to 4 kbps. If voice is compressed as much as possible, and modulations are the highest order needed to make a phone call, what's left? The dumb antenna. Because capital efficiency is key, a smart antenna system should be able to maximize the margin we get for every bit. Arraycomm, Metawave and Alestra are all doing the right thing by competing for that final frontier.
Q. What impact will IP have on wireless?
A. The logical question is why not just have it all-IP? 1XEVDO (1 X Evolution Data Only) will be end-to-end IP. With all these voice evolutions, there's inefficiency in IP for voice. Someone estimated that using two time slots in GPRS-worth of capacity to put a voice call up causes twice as many bits to go over the air to support a conversation. With IP, you have a whole order of magnitude in terms of data speeds on the landline as opposed to mobile. If we keep increasing the capacity, SIP (Session Initiation Protocol) will get in there, but I don't see it happening in the near term.
-Sean Buckley
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Tom Evslin
Chairman & CEO
ITXC
Tom Evslin has what you might call a balanced outlook on the market for voice traffic on the Internet: "It's either great or it's terrible, depending on how you look at it."
For equipment suppliers and carriers that may have overpaid for 3G licenses, times are not their best. But in these cost-conscious times, technologies that save carriers money have the opportunity to become more popular.
So it's easy for Evslin to be at least a little optimistic. Since he founded ITXC in 1997, the company has done nothing but grow. ITXC.net is the largest Internet-based voice network in the world, with calls going in and out of more than 130 countries. According to the research firm Telegeography, about 5 percent of voice traffic is currently offloaded to the Internet and ITXC carries 20 percent of that.
This is great news for ITXC. Even if user demand slows, the movement among service providers toward streamlining operations means the wholesale market for carrying IP voice will still grow. While there may have been a belief a few years ago that consumers would choose to make the switch to VoIP individually, the economic benefits have been most apparent to the service providers themselves. "Carriers are deciding on behalf of their end users to make the change to IP telephony because it's economical," Evslin says. "At the end user, there's no sign that voice traffic growth is slowing down. Unlike the dotcom phenomenon, investments in telephony are based on user demand."
In 2002, Evslin says, end users whose calls travel over ITXC.net will continue to benefit from behind-the-scenes decisions that carriers make, including a slow adoption of SIP (Session Initiation Protocol). While there has been little SIP traffic to date, Evslin says vendors such as Cisco have been building SIP capabilities into their stacks and ITXC is ready to support it.
More generally, the keyword for the coming year will be interoperability, he says, noting that as 2001 draws to a close, Clarent and Lucent are behind the same H.323 initiative to develop commercial use of appendix G, which opens the door for VoIP interoperability. Evslin also sees steady growth in the coming year for ITXC's business in underdeveloped nations. "We can offer these players a capital-efficient way to become immediate competitors. Otherwise they will have enormous expenses," he says, citing a recent contract signed with Cotas, a Brazilian service provider, for which ITXC will handle all voice traffic traveling beyond the originating city's network.
Wherever ITXC goes, it will need to guarantee that VoIP be interoperable with the PSTN where end-to-end IP connections are not available. ITXC will continue to use both VocalTec and Cisco products because each has different strengths: VocalTec's analog capabilities are good for low-end SS7 processing, Evslin says, whereas Cisco's products are cheaper and more efficient for larger capacities.
With the size of the VoIP market-Evslin predicts that by 2010 all voice calls will traverse the Internet-just making incremental improvements to ITXC's routing technology will help the business grow at a healthy rate. "There's a huge market to conquer just as we move the rest of that traffic over to the Internet," he says.
-Jared Bazzy
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Trevor Dearman, COO
Lijun Niu, CTO
Denwa Communications
While many providers continue to discuss the future functionalities of SIP (Session Initiation Protocol), Fairfax, Va.-based Denwa Communications is using it today to bridge the new public network. Since emerging in 1996, primarily to serve the international market with U.S. dialtone to about 50 countries, Denwa is now making its way into the domestic U.S. market. In April 2000, the company began R&D on SIP and last July brought up its first live customers.
COO Trevor Dearman says Denwa's adoption of SIP was a practical decision. "Our use of SIP came originally from our relationship with Nuera, which was helping us find a way to avoid double compression on voice traffic," he says. "SIP allows out-of-band signaling end-to-end across a network without the need for multiplexers or circuit switches. From there, it transcended into a retail and enterprise product with the available features."
Denwa offers value-added services in three distinct segments: wholesale voice/data exchange, enterprise and end user. Under its wholesale carrier service, Denwa offers a traditional voice and data exchange that gives domestic and international Tier 1 and 2 IXCs and prepaid calling card providers a new way to direct international voice traffic.
Now this proposition is music to the ears of domestic-based ISPs and DLECs. Denwa's SIP service can become an added source of revenue that does not require a company to purchase extra voice equipment to gain new revenue streams. Service providers can offer customers value-added, differentiated services including instant messaging, follow-me service, end-user provisioning and end-to-end system management.
Unlike some VoIP providers that require an enterprise to replace its hardware with new equipment, Denwa customers can operate existing infrastructure with a migration path. In this segment, the provider can offer IP-PBX services for small businesses, termination off-load for Fortune 500 companies and VPN services. Denwa's end-user single port gives residential and SOHO customers a dedicated connection for SIP-based phone services. Operating over existing phone and data connections, this performs a number of services such as voice mail and faxing over one common network.
How does Denwa accomplish this? Its network architecture is composed of multiple layers including an application layer with a feature server and directory services; call control layer with softswitch layer that performs signaling and routing; gateway access; billing/OSS; firewall and QoS. To deliver a SIP solution, Denwa has been working with LongBoard, an application server and development tool vendor, and its partner alliance. Under the LongBoard-led initiative, Denwa gains access to solutions from a number of companies including Iperia (voice/unified communications); LongBoard (telephony infrastructure for feature application); Mediatrix Telecom (IADs); Nuera (IP telephony gateway and softswitch); PingTel (SIP phone) and Voyant (conferencing).
-Sean Buckley
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Chuck McCown
General Manager
Beehive Telephone Companies
Utah-based ILEC Beehive Telephone Companies serves roughly 1000 residential and business customers scattered over an area equal to the size of Connecticut, Rhode Island, Vermont and New Hampshire. Anyone living within the parts of Utah and Nevada covered by Beehive has just one choice for service: Beehive.
So, the company aims to provide its remote customers with the services they need. For television, Beehive sets customers up with satellite dishes and hooks them up to networks like DirecTV. For Internet access, customers can get dial-up connections, FTTH (fiber to the home) or satellite broadband.
General manager Chuck McCown says Beehive receives few requests for much more than local exchange service, but that it does provide special circuits upon request, along with more basic telephony services such as voice mail, caller ID and call waiting-in some areas.
Despite the difficulties of delivering service to rural areas where distances between tandem and Class 5 switches might cover 200 miles, Beehive is involved in a few projects to provide customers with the same advanced telephony services and broadband capacity any big-city dweller might enjoy.
First, because the huge distances between customers-Beehive's shortest loops are greater than 18,000 feet-make DSL impractical, the company sees FTTH as the solution to its customers' present and future broadband needs. Because the cost of a strand of fiber is about the same as a pair of copper wires, McCown says the company plans to do just about all its future construction in fiber.
"The only difference in the cost is the unit that goes into the subscriber's home, which is coming down in price but is still fairly costly. And the CO equipment costs more, but it's worth it," McCown says. "This solves the whole problem: anything they can describe, we can provide."
Because fiber deployment is still in the early stages, McCown declines to talk specifics about the Ethernet FTTH technology his company is using, but says Beehive takes a practical view toward video, believing satellite is the cheapest, easiest means to give people television and avoid the expense of Gigabit Ethernet technology that would otherwise be required to deliver video.
Second in Beehive's plans to support more advanced customer services is its trial of a Taqua next-gen Class 5 switch, which McCown says has operated flawlessly during six months of testing. Provided the switch wins a place among the list of federally approved telecom equipment eligible for purchase using government loans, Beehive plans to use it as a replacement for its existing Class 5 switches.
-Ted McKenna
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Tom Nolle
President
CIMI Corp.
Q. Do you believe there is a bandwidth glut in the long-haul network? If so, what does this mean for investments in long-haul equipment?
A. There is considerably more bandwidth than can be converted to service sales that would earn carriers a fair ROI. That means the industry's first priority is not to figure out how to make bandwidth "free" but rather how to make it costly as hell-but even more valuable to the buyer, so there's a positive cost/benefit trade-off. Most of the gear out there is just producing bits, not creating a business context for their consumption. Given that, it's not even useful to talk about what equipment might "win," because we haven't defined a meaningful game. In general, though, services are created near the edge, so we need to catch up there and lay off core technology investment.
Q. We've heard about the bandwidth dearth in the metro and access networks. Which needs the bigger boost and how will carriers address this?
A. In the access space, and only DSL matters for that space-period. Carriers will address DSL deployment as business conditions and regulations permit; technology is largely a nonissue in that regard. There are no revolutions coming from the tech side, and even thinking about that would hurt a hell of a lot more than it would help.
Q. Every provider I talk to says network management issues top their lists of concerns. How will carriers address these concerns? How savvy have vendors become?
A. Network management is like motherhood: Everybody's in favor of it. Many would rather it be done by somebody else. I think there's some room for innovation. We need to rethink the paradigms that relate services to consumers in order to build carrier ROI. Similarly, we need to rethink the paradigms that bind services to networks. I think that what CIMI calls "service management" is the key issue. Service management would say that services are not a layer of TNM, but a completely separate, business-driven function that has to bind customer to carrier, and then service to network. Networks are managed as a whole-performance or capacity planning. Services are sold, fulfilled and assured more individually. Right now, that's not how it's done. A few vendors (e.g., CPLANE, Mantra, Syndesis, Trendium) have articulated service management frameworks that fit our model.
Q. What do you think about god (multiservice) boxes anywhere in the network?
A. I hate the term because it's pejorative. Multiservice switches are essential, but convergence is stupid and failing (or failed). We need to throw out this whole "Internet eats the carrier world" nonsense and move on to a dose of reality. Some vendors have a clue here (Aplion is one of my favorites at the edge), and the MSF (Multiservice Switching Forum) architecture is a good overall approach.
-Sue O'Keefe
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