Sprint doubts own ION plan
idg.net
Converged voice/data net relies on unlikely RBOC
cooperation.
By David Rohde
Network World, 7/13/98
Washington, D.C. - Sprint's super-efficient network
capable of converging voice and data traffic over a single
broadband pipe won't likely be coming to your doorstep
anytime soon.
Statements filed by Sprint Corp. with the Federal
Communications Commission and obtained by Network
World reveal Sprint is not confident about obtaining the
local access lines it needs to produce the Integrated
On-Demand Network (ION).
In language that at times directly contradicted statements by
executives at the ION launch last month, Sprint lawyers
said they were "gravely concerned" about the carrier's
ability to obtain digital subscriber line (DSL) local loops
needed to reach businesses and homes. ION, announced
with much fanfare in June, is Sprint's new combined local
and long-distance architecture (see story, NW, June 8,
page 1). The network is designed to concentrate a user's
voice, data and Internet traffic through an ATM device on
the customer premises.
The traffic is then shipped over a broadband facility leased
from a local carrier to a special Sprint service node. Using
service management software from Bellcore, the node then
does everything from delivering a local phone call across
the street to providing wideband Internet access and
videoconferencing.
But because Sprint is not building its own local networks,
Leon Kestenbaum, Sprint's vice president of federal
regulatory matters, asked the FCC to rule that regional Bell
operating companies' broadband digital access lines be
subject to the same resale rules that apply to regular analog
lines, meaning that they must be sold to competitors at a
discount. For example, Kestenbaum warned that unless the
FCC forces super-RBOC SBC Communications, Inc. to
resell DSL lines at a discount, "Sprint would be foreclosed
from using SBC's [asymmetric] DSL services altogether."
And while Sprint marketing and technology officials last
week continued to insist that they plan to install their own
DSL access equipment locally to reach ION customers if
they can't obtain the lines from RBOCs, Kestenbaum
virtually ruled out this option for the ION rollout.
"As a matter of simple economics, the alternative of buying
unbundled copper loops and collocating Sprint's own xDSL
equipment in [RBOC] central offices would be
commercially infeasible in all but a handful of offices,"
Kestenbaum wrote. The cost of such a technique is high,
construction times are significant and space is constrained in
many central offices, he said.
Sprint's hesitation about the ION rollout bolstered the
views of some analysts who have privately ridiculed ION as
a crass publicity grab to counter aggressive new carriers'
hype over IP convergence.
"That was the worst announcement I've ever seen," said
one prominent analyst who asked not to be identified.
"They claimed they were the only ones who could do this
kind of thing, and then gave no details or proof." Ironically,
Sprint's popular frame relay service has successfully
migrated to a new class-of-service-based offering
announced last year, the analyst added. But Sprint has
failed to define a migration path from frame relay or any
other service to the new ION services that would merge
data traffic with voice and video. Other analysts said Sprint
was engaging in the time-honored practice among carriers
of saying one thing on Wall Street and another in
Washington. "The lawyers are saying that if there's no
regulatory relief, there's no ION," said Frank Dzubeck,
president of Communications Network Architects, Inc., a
consulting firm in Washington, D.C. "And they're right.
They will fail unless the government gives them relief for the
last mile to the home."
Broadband bonanza
Sprint's filings were made in response to a growing
movement in Washington to deregulate the RBOCs'
broadband data operations, even before the RBOCs gain
general authority to enter the long-distance business. All of
the RBOCs except BellSouth Corp. have filed petitions
asking the FCC to allow them to carry IP and other data
traffic across their regions without the usual restrictions on
local calling areas and requirements to offer their facilities to
competitors such as Sprint.
The RBOCs' hook: a provision of the Telecommunications
Act of 1996 that went almost unnoticed until this year.
Called Section 706, it requires the FCC, within 30 months
of enactment of the act, to promote broadband networks
by dropping burdensome regulations on broadband
networks, or at least have a proposal to do so. That
deadline falls next month. Not only Sprint, but AT&T, MCI
Communications Corp. and the Commercial Internet
Exchange Association, an ISP trade group, have opposed
the Section 706 petitions. And the Association for Local
Telecommunications Services, a competitive local exchange
carrier (CLEC) trade group, has asked the FCC not only
to deny the petitions but to affirmatively rule that RBOCs
must resell their DSL and other broadband facilities at a
discount.
The stakes are higher for Sprint than for its competitors.
Unlike AT&T and MCI, Sprint is neither buying nor
merging with a facilities-based CLEC, meaning it has to
lease all of its local facilities except in those smaller markets
where it owns some incumbent phone companies. As a
result, Kestenbaum told the FCC that Sprint must "utilize
the RBOCs' broadband capabilities to bring ION to market
on a widespread basis." And that "depends to a significant
degree" on the FCC's Section 706 decisions, he said.
Unfortunately for Sprint, FCC Chairman William Kennard
has been receptive to the RBOCs' Section 706 petitions.
"They have rightly asked, 'Why should we make this new
investment if we simply have to turn around and sell this
new service, or the capabilities of these advanced
electronics, to our competitors?' " Kennard said in a recent
speech.
Getting the story straight For their part, Sprint officials were
scrambling late last week to clarify their ION rollout plans,
in advance of Sprint Chairman William Esrey's keynote
address about ION to this week's Internet World show in
Chicago.
Sprint has claimed "key network access agreements" for
ION with SBC subsidiary Southwestern Bell plus
BellSouth, Ameritech Corp. and GTE Corp. Jeff Anderson,
Sprint's senior director of strategic development, last week
said those agreements cover Broadband Metropolitan Area
Networks (BMAN), which Sprint defines as fiber rings that
run directly into user premises or are accessible over T-1
tail circuits.
But the BMAN agreements do not include DSL circuits, he
said. And Anderson insisted that Sprint was still planning to
install its own local DSL equipment. "By definition, under
the architecture of ION, with the Service Node and Service
Manager, we'd be able to take a dry copper loop and put
the necessary DSL electronics on it."
Yet Sprint's filings also disclosed that the geographic
availability of ION will be subject to advance customer
demand. Kestenbaum said one reason why Sprint is
reluctant to install its own central office DSL termination
gear - known as DSL Access Multiplexers, or DSLAMs -
is because it can't guarantee sales of ION services. "A
DSLAM that can terminate roughly 500 loops would be
grossly underutilized in an end office where Sprint has only
one or two ION customers," Kestenbaum wrote.
John Hoffman, Sprint's senior vice president of external
affairs, confirmed that Sprint will wait for demand to
develop in an area before rolling out ION on a dial-up
basis. But he added that Sprint officials hope corporate
usage will spur clusters of telecommuters to take up the
offerings. "If they have hundreds of employees who want
the services, we'll move heaven and earth to serve those
customers," Hoffman said.
Nevertheless, Hoffman, who oversees Sprint's regulatory
affairs operation, said prospects for gaining ION dial-up
local access at sufficient bandwidth is clouded in the regions
of the four RBOCs with Section 706 petitions, which if
granted would probably wipe out Sprint's ability to resell
RBOCs' DSL lines. "Are we less optimistic with respect to
those four [regions]? Sure," Hoffman said. Reminded that
there are only five RBOCs left and asked if that therefore
means Sprint is concerned about ION access in most of the
country, Hoffman answered "Yes, a good part of it." He
added: "[The RBOCs] are exhibiting anticompetitive
tendencies, and that makes us very uncomfortable."
However, Hoffman said large businesses should look first
to the BMAN fiber circuits that Sprint is leasing from some
local carriers, and Sprint is still considering alternatives to
DSL resale, including cable lines, power lines and wireless
loops. And despite the documents that seemed to rule out
collocating Sprint multiplexers in RBOC central offices,
Hoffman backed the statement of Sprint's strategic
development director that such a method was indeed
feasible. "Even if some of the Bell companies are absolutely
obstinate, we've still got the ability to buy unbundled loops
and condition them ourselves," Hoffman said.
Esrey originally announced that ION services would go into
beta test with selected commercial customers later this year
and would become generally available to businesses in
mid-1999, with residential availability late in 1999. "But
Sprint has a way out," Dzubeck said. "Esrey didn't say how
many [ION circuits] he's going to put in - and where."
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