Packet technologies force telcos and vendors to re-evaluate the circuit switch
internettelephony.com
August 17, 1998
FROM THE GROUND UP Cover Story
VINCE VITTORE and SANDRA GUY
When Sprint announced in June that it would build a new network
based on packet and cell technologies, boosters used words such as
"bombshell," "revolutionary" and "a watershed event." In many ways,
the adjectives were correct. Never before had a carrier come
forward with a plan that would propose to change the face of the
network as greatly as the Integrated On-Demand Network.
Analysts, however, viewed the plan as nothing new--simply the
culmination of high-speed access events that have been building for
five, even 10 years. Yet Sprint's proposal may provide a glimmer of
the inner workings of the unfolding central office (Figures 1 and 2).
Unlike today's CO, in which telcos must tweak voice switches to
carry data traffic, the CO of the future likely will look much more like
a collection of large data switching centers.
Other options are emerging, as well. Level 3, a new Omaha-based
carrier that expects to turn up Internet protocol (IP)-based service in
the third quarter, uses no circuit switches. When it deals with
incumbent LECs' COs, the carrier hopes to leverage unbundled
elements, says Jack Waters, vice president of network engineering at
Level 3. And in metropolitan areas, Level 3 will build large gateway
nodes and local networks that touch end user buildings and Internet
interexchange points.
"Our local ring, instead of touching COs, touches different kinds of
facilities," Waters says. Level 3 describes itself as a communications
and information services company that provides a full range of
services, including local, long-distance, Internet and other enhanced
services over IP.
Yet the process of using unbundled network elements remains
uncertain because the issue is tied up in court. That's where the
regulatory stumbling blocks come in. Transport-related data services
such as ATM and frame relay are regulated, but IP services are not.
John Charters, vice president of Internet service for U S West,
wonders whether regional Bell operating companies' Internet service
providers will be motivated to push convergence in the CO. In this
regulatory climate, RBOCs are motivated to push convergence into
the unregulated IP point of presence (POP) created to deliver IP
services.
U S West has petitioned the FCC to deregulate all data services.
However, the FCC recently recommended that incumbent carriers
be exempted from unbundling or reselling elements of their data
networks to competitors.
At the end of the network, things also will look different. Instead of
end points that do nothing more than pass on information, the
network of the future will collect information at the premises, process
it at a service node and add intelligence. Additionally, network
intelligence, which has traditionally resided deep in the network
where telcos could easily maintain and upgrade it, will be pushed out
in the form of applications, which could be stored locally,
domestically or internationally, says Marty Kaplan, senior vice
president and chief technology officer for Sprint.
Indeed, the entire idea of having a CO could undergo a radical
change, says Warner Andrews, strategic product line manager for
ATM at Rockwell Semiconductor Systems. "The concept of a CO
becomes a collection of control points for cell traffic, as opposed to
a big box [or five-story building]."
Andrews calls Sprint's ION announcement "a harbinger of good
things to come for people who supply ATM gear." He also perceives
ION as an example of "using an ATM protocol to obliterate the
concept of the CO."
Others call the future CO an edge vehicle that will serve a public
network that will look much like today's enterprise
network--multivendor, multiprotocol and multinetwork management,
says Hilary Mine, senior vice president at Probe Research. "The
good news is that, for the first time, service providers will call the
shots. The bad news is that the network will be messy and difficult to
monitor, maintain, operate and provision," she says.
OSS effects
The idea of using IP to push voice through is even having its effect
deep within the traditional CO, where operations support systems
(OSSs) have hummed along for years in the circuit-switched world.
For carriers such as Sprint and Bell Atlantic, which are both
experimenting with IP voice services, the transition means
implementing new software and systems. Just as important is finding
the manpower to run them.
"We believe in six key business processes--billing, customer care,
provisioning, trouble administration, network engineering and
network management," says Jason Donahue, vice president of
marketing for Beechwood, a Clark, N.J.-based consulting group
specializing in OSS integration. "What IP telephony is doing from an
OSS perspective is changing the way the carrier manages those
processes. What that means for telco business processes is the
systems themselves are going to become more complex as the
network elements mature."
Donahue uses billing as a prime example of the change IP services
will have on traditional OSSs. Because carriers will be able to
provide multiple services on one platform, customers will begin
demanding integrated bills. "Customers want a single bill, and they
want a discount. To achieve that you don't need a single rating
engine, but at the very least you have to have integration between
different billing systems," he says.
Incumbent carriers will need to install new support systems to handle
IP-based services. The trick over time, he adds, is to create a
common set of plans, and that may not happen for four or five years.
Economics
Regardless of where carriers are in their IP plans, one simple truth
remains: The potential profits from IP are too compelling to ignore.
The fact that data is catching and sometimes surpassing voice traffic
on the public switched network makes an economic case for
switching to IP networks, says Ray Keneipp, principal analyst for
carrier infrastructure at Current Analysis.
The addition of intelligence on the end of the network strengthens
that plan, says Mine. In the end, she sees a mix of models not unlike
the enterprise world today. In most areas, carriers will have a
combination of circuit switches and IP data switches.
However, not everyone is convinced. Fred Seigneur, chief
technology officer of Convergent Communications and president of
Sonetech, a think tank/systems integration company, says the cost of
building IP networks is higher than many think because voice
compression over the Internet requires an expensive digital signal
processor on each end of the call. Convergent, which bills itself as an
enterprise carrier, is using a client/server architecture called ROADS,
which stands for robust open architecture distributed switching, to
provide customers with an integrated voice/data service. That won't
necessarily mean IP-based voice, but it won't preclude it.
But Level 3's Waters says that the carrier uses no voice
compression. "We're in the middle of a development plan to build a
substantial fiber optic channel. Compressing 56K voice channels is
not at all the end game we're shooting for," he says.
Ironically, the economics driving carriers in the IP world appear to
work in reverse for the OSS portion of the network, he says. As
carriers gain the operating efficiencies from IP, OSS becomes more
important as a differentiation and more expensive in terms of
percentage of capital budgets.
Although some OSS vendors are trying to develop standardized
products for the IP environment, Donahue brushes off the idea as
unfeasible, particularly for new entrants such as Qwest and Level 3.
"In a sense, the new carrier is more complex because it has to learn
the business processes first, and there is no telco in a box," he says.
"It's virtually impossible to create off-the-shelf OSSs given the
complexity of the telco environment. What the bigger carriers learn
as they roll out services is that their business is different from any
other carrier's."
The vendor angle
While network operators continue to push for singular platforms, the
shift to an IP-based environment is causing cataclysmic changes in
the traditional vendor world. Big switch manufacturers such as
Lucent Technologies, Northern Telecom, Ericsson and Siemens
Telecom Networks can no longer stake their futures on a steady flow
of multiyear contracts from telcos. The rapid ascension of IP's
importance in the CO is forcing them to reposition themselves, either
through internally developed IP programs or acquisition.
More important, the CO market is opening more to companies such
as Cisco Systems, 3Com and Ascend Communications that have
years of IP experience.
"The voice guys say, 'We can buy our way into this,'" says U S
West's Charters. "And Cisco people say, 'We can engineer our way
into this.'"
The question is not so much what happens to the CO, he adds, but
whose equipment goes in it. Regardless of the vendor name on the
CO boxes, he doesn't think anyone has yet presented a unified
voice/data POP. "The interaction between my data tone and my dial
tone is occurring. The jury is still out, in my mind, as to what needs to
occur," he says.
Vendors, however, don't have the luxury of waiting and must place
their bets now. Among the stream of announcements earlier this year
was one from Nortel that perhaps sums up the position big vendors
are in better than any other. In June, the company agreed to acquire
Bay Networks, giving it a strong player in the IP market and what
some thought would be an entry into the voice-over-IP world. After
all, Bay already had pushed voice over its network equipment and
through an earlier acquisition of LAN City was among the
forerunners in the cable modem market. Still, less than two weeks
after the acquisition, Nortel unveiled its own IP strategy called
IPConnect (Figure 3).
Geared for all levels of carriers, the IPConnect line runs from a
low-end 24-port product that could be integrated with PBXs up to
Nortel's plans to integrate IP ports on its DMS switches. Throughout
the whole line, the company is looking at IP voice as a business tool,
which requires some different service assumptions from those that
most gateway vendors are under.
"What we're saying is if you're interested in toll arbitrage or getting
out of access charges, don't do IP telephony," says Al Bender, vice
president and general manager of carrier voice-over-IP solutions for
Nortel. "IP is the holy grail that industry has been searching for,
which is the ability to integrate voice and data over the same
infrastructure. But before IP telephony can be a serious business
tool, we believe there can be no change in behavior."
And although that will initially mean providing single-stage dialing (as
opposed to the two-stage calling card method most operators use
today), it also means providing the type of applications users now
take for granted, including network-based voice mail, caller ID,
three-way calling and call waiting.
To do that, vendors also are being forced to do something they've
never had to do--open their switches to third-party vendors. In the
circuit-switched world, any new application development generally is
handled by the vendors themselves or a small circle of software
companies. The advent of IP not only is forcing vendors to develop
open interfaces to their switches, it's creating some unique
opportunities and services.
Lucent, which plans to integrate some of the capabilities of its
PacketStar IP switch into its 5ESS, will use a combination of internal
development and third-party vendors, says Dianne Herr, vice
president of marketing for the 5ESS group. And because
applications likely will sit out further in the network, the company is
looking to work closely with edge device vendors.
"I think it's critical that we have that gateway function in the 5E and
as a separate product," says Herr. "People can develop these
capabilities and utilize them with each other."
"In the Internet space, everyone has learned that they can't do
everything alone," says Graham Howard, manager of advanced
applications for Siemens. "We want to build an enduring architecture
that's not just tied to technology today."
Any Comments?
Send them to Karen Murphy at msblues@earthlink.net.
www.internettelephony.com
Telephony August 17
c1998 Primedia Intertec
All Rights Reserved.
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