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To: Roger Hess who wrote (1385)	6/2/1998 9:38:00 AM
From: MangoBoy	Read Replies (1) \| Respond to of 6846

[Sprint Unveils Revolutionary Network] (Sprint CEO will be on CNBC Power Lunch at 12:40 ET today. -- mark) Breakthroughs Give Customers High-Speed, High-Bandwidth, Multi-Function Capabilities Over Single Phone Line NEW YORK, June 2 /PRNewswire/ -- Sprint (NYSE:FON) announced today a revolutionary new telecommunications capability that can provide homes and businesses with virtually unlimited bandwidth over a single existing telephone line for simultaneous voice, video calls and data services. "This truly is the Big Bang that expands the universe of what telecommunications can do in our homes and businesses," said William T. Esrey, Sprint's chairman and chief executive officer. The new capability, developed under the code name Project FastBreak, is not a single technology but a combination of numerous technological advances. "As a result, we are introducing tomorrow's network today -- the Integrated On-Demand Network (ION)," said Esrey. A household or business will be able to conduct multiple phone calls, receive faxes, run new advanced applications and use the Internet at speeds up to 100 times faster than today's conventional modems -- all simultaneously through a single connection. The need for multiple phone lines will be eliminated, and applications such as high-speed online interactive services, video calls and telecommuting will be readily accessible and less costly. Use of the Internet will be so fast that typical pages on the World Wide Web will pop up almost instantaneously. At home, consumers no longer will be required to buy additional telephone lines to make multiple voice calls and be online at the same time. Businesses will no longer be required to manage numerous complex networks but can rely on a truly integrated network that consolidates voice, video and data traffic while reducing costs. Sprint's ION allows businesses to expand dramatically their local and wide area networks and dynamically allocate bandwidth, thus paying only for what they use rather than having to purchase a set high-bandwidth capacity that often sits idle. ION will also set a new industry benchmark for service reliability, utilizing Sprint's pervasive deployment of SONET rings across the United States. Today's announcement is the result of five years of confidential work. "We saw where the trends were pointing and quietly began designing the network of the future. We've invested more than $2 billion in building the network that will handle the advances we're announcing today, and numerous worldwide Sprint patents have either been granted or are pending," Esrey said. Sprint has been privately testing the revolutionary Integrated On-Demand Network capability with both businesses and consumers for the past year. An initial roll out to large businesses will begin later this year. The service will be generally available to businesses in mid-1999, with consumer availability late in 1999. Sprint's Integrated On-Demand Network also creates a new cost standard for the telecommunications industry. By utilizing cell-based network technology, the network cost to deliver a typical voice call will drop by more than 70 percent. For example, Sprint's costs to provide a full-motion video call or conference between family, friends or business associates will be less than to provide a typical domestic long distance phone call today. "We have moved beyond the outdated cost structure of the last 100 years," Esrey said. "We will be offering every Sprint customer their own multi-billion dollar, unlimited bandwidth network in the same monthly price range that many customers spend today for communications services." "We're past thinking about 'nailed-up' links that are permanent costs to customers. Sprint's network is ready all the time to provide capability and capacity whenever and however the customer wants it," said Esrey. Sprint's investment in ION provides the fabric for truly redefining local phone services. "Not only have we created the network of the future, but this same network will serve as the basis for our competitive local phone strategy," said Esrey. Sprint's long distance network is already built and covers the entire United States. Its reach will be extended through metropolitan broadband networks (BMAN) available in 36 major markets nationwide in 1998 and in a total of 60 major markets in 1999. These BMAN networks will allow Sprint ION to pass within proximity of 70 percent of large businesses without having to utilize Digital Subscriber Line (DSL). For smaller business locations, telecommuters, small/home office users and consumers who may not have access to BMANs, ION supports a myriad of the emerging broadband access services, such as DSL. "We are opening new vistas for the ways in which people communicate. If you are a Sprint customer, you will be online, all the time. You will not have to access this network of breathtaking power and speed; you will be part of it," said Esrey. Unmatched capabilities Sprint is able to deliver this revolutionary new capability because its network supports a seamless, integrated service to the desktop over an Asynchronous Transfer Mode (ATM) backbone network. This network fabric provides the speed, flexible bandwidth, scalability, service consistency, security and telephone voice quality that neither the Internet nor non-ATM-based networks can deliver. "Sprint's Integrated On-Demand Network gives us capabilities our competitors don't possess," said Ronald T. LeMay, Sprint's president and chief operating officer. "Because of the limitations of their network architectures, the traditional telecommunications providers are mostly consolidating and bundling different services, not integrating them. They are building separate data networks that are not integrated with their legacy voice networks. As a result, many competitors will be forced to rationalize disparate networks or risk being disadvantaged in cost and capability." In addition, Sprint's ION leap-frogs the bandwidth-only capabilities of DSL and cable modems. ION provides customers with robust voice, video and data services, along with the capability to customize multiple services, all combined with access to unlimited bandwidth, available on demand, all the time, whether they are across town or across the country. The new entrants have other problems, according to LeMay. "They are spending billions of dollars to create fiber routes and to build IP (internet protocol) networks that only offer best-effort voice transmission, but they cannot match the service quality that Sprint provides. Sprint's ION will integrate existing customers' networks and greatly simplify network management for Sprint's customers, which the emerging carriers' IP networks will not be able to accomplish." Unlike Sprint's ION, the emerging carriers networks cannot allow customers to "grab" bandwidth as needed. While the emerging carriers claim to be deploying networks to selected U.S. cities, Sprint's high-speed integrated network is deployed across the country and within most major cities through metropolitan broadband network rings. "We have also established distribution channels such as RadioShack and established customer relationships and the power of the Sprint brand, one of the most widely recognized in the United States. Sprint's total, integrated set of services -- which includes long distance, local and the only nationwide digital PCS offering -- provides Sprint with a better capacity/cost position, challenging the claims of the emerging and legacy carriers," said LeMay. Cisco, Bellcore and RadioShack Central to the deployment of Sprint's Integrated On-Demand Network (ION) will be three partners -- Cisco (NASDAQ:CSCO), Bellcore and RadioShack. Cisco will provide technology at the heart and edge of ION, including customer premise equipment. Through the exchange of intellectual property, Cisco will provide the capability of voice over ATM for ION and the ability to connect to other carriers' legacy circuit-switched networks. In addition, Sprint will be an early implementer of the Directory Enabled Networks (DEN) standard. Networks with DEN capability place information about users and their services on ION to deliver better performance, reliability, security and quality for a variety of networked applications. "Cisco is proud to be working with Sprint to deliver the benefits of data, voice and video integration to customers," said John Chambers, president and CEO of Cisco Systems. "By collaborating with Sprint and Bellcore, we will develop and bring to market the first ION applications and services and lead the way in making multimedia communication an everyday part of doing business." Bellcore is providing the central software framework that is the core intelligence of ION, in addition to the telephone features commonly in use today. Through its proven expertise, Bellcore will also develop software and provide consulting services to ensure the same reliability for ION that Bellcore helped create for the circuit-switched voice network. "Bellcore is pleased to partner with Sprint and Cisco to make Sprint's vision of a truly integrated on-demand network a reality. The implications of this new network for businesses and consumers are profound," said Richard C. Smith, CEO of Bellcore. "Cisco and Bellcore are the perfect technology partners in this venture," Esrey said. "In Cisco we have the clear market leader in data networking and application enabling, while in Bellcore we have the acknowledged expert in providing the industry's most advanced capabilities of reliability and scalability." Another key partner for Sprint is RadioShack, a company already selling a full portfolio of Sprint products and services. With 6,900 locations nationwide, RadioShack has a store within a five-minute drive of 94 percent of the U.S. population. One million people visit a RadioShack store every day. "Sprint's alliance with RadioShack provides consumers with the ability to go to one place near their work or home to have all their communications questions answered, purchase their products and services, and have those products and services integrated through one communication services provider," said Esrey. "This alliance also offers distribution capabilities that no other telecom company can come close to. As Sprint revolutionizes communications with ION, the 25,000 RadioShack sales employees will help redefine the way small businesses and consumers purchase their products and services," added Esrey. "We expect to play a key role in getting America 'connected' at the grassroots level for the next century," said Leonard H. Roberts, president of RadioShack and CEO-elect of Tandy Corporation. "We are positioned to enhance our reputation of being America's 'Telephone Store,' to being America's 'Telecommunications Store'." Customers already on board Several major corporations have already committed to utilizing Sprint's Integrated On-Demand network services in the months to come. Coastal States Management, Ernst & Young LLP, Hallmark, Silicon Graphics, Sysco Foods and Tandy will be initial customers. For these businesses, and others like them, ION offers a significantly more productive and efficient communications solution than today's model. High speed, integrated communications will be available to corporate locations, branch offices, small businesses and the small office/home office worker. The result is an enhanced virtual private network that enables applications such as collaborative product development, supply-chain management, distance learning and telecommuting. "Businesses will be able to both provide communications internally and develop a totally new way to think about integrating suppliers, partners and clients into a truly integrated multimedia network," said LeMay. For small businesses, Sprint's next-generation network is the great equalizer -- delivering the same communications power that is available to large businesses. The great equalizer concept also extends big-company capability to the small offices of large corporations, to telecommuters, to small office/home office and to individual entrepreneurs. "Whether you are an executive working in your home office or a budding entrepreneur with your only office at home, the capabilities of Sprint's network are there for you online all the time," LeMay said. "A Sprint customer will have the same computer access and video-conferencing capabilities, in terms of speed, quality and reliability, that are available in the office. This has profound implications in making telecommuting truly viable." Innovation and leadership More than a decade ago, Sprint ushered in the era of pin-drop quality and reliability when it introduced the first nationwide, all-digital fiber optic network. Sprint was first to market with a variety of products and services, including the first public data network, the first national public frame relay service and the first nationwide ATM service offering. Additionally, Sprint deployed the first coast-to-coast SONET ring route and was the first carrier committed to deploying Dense Wave Division Multiplexing on nearly 100 percent of its fiber miles. SONET allows voice, video and data services of any bandwidth size to be transmitted to its destination with guaranteed delivery. Metropolitan Broadband Networks extend that powerful service and delivery guarantee in major markets. This same innovation and execution prowess is the foundation for ION. Another technological advancement developed over the past four years as part of ION is the ability to carry pin-drop quality voice traffic over an ATM network and to seamlessly connect to any public switched network. This capability will be transparent to customers using the Sprint network. Network capacity is not an issue. Through deployment of Dense Wave Division Multiplexing and other fiber-optic technologies, Sprint can efficiently and quickly scale network capacity, as the marketplace demands, while simultaneously improving unit economics. In 1998, a single Sprint fiber pair will be able to simultaneously carry over 2 million calls --- the equivalent of the combined peak time voice traffic of Sprint, AT&T and MCI. Next year, that same fiber pair will be able to simultaneously carry four times the combined voice traffic of Sprint, AT&T and MCI. "In the Year 2000, one pair of Sprint fiber will have the capacity to handle 34 million simultaneous calls, or 17 times today's combined volumes of Sprint, AT&T and MCI, without having to physically construct any new fiber," Esrey said. Sprint also is a founding member of the "Universal" ADSL Working Group, aimed at accelerating the adoption and availability of high-speed digital access for the mass market. The goal of the "Universal" ADSL Working Group is to propose a simplified version of ADSL that will deliver to consumers high-speed modem communications over existing phone lines, based on an open, interoperable International Telecommunication Union (ITU) standard. Other participants in this working group include Microsoft, Intel, Compaq, Cisco and other technology and communications companies. "Quick adoption and deployment will lead to availability of ION capabilities to a larger portion of businesses and residences," said Esrey. "Sprint led the way over a decade ago with crystal-clear quality and the construction of our nationwide fiber network. Since that time we have led the industry in numerous 'first to market capabilities' across the emerging and high-growth data market. Today, with its innovative ION applications, Sprint establishes its place as the pre-eminent provider of total services to our customers," Esrey concluded.

To: Roger Hess who wrote (1385)	6/2/1998 9:43:00 AM
From: MangoBoy	Respond to of 6846

[WSJ: Sprint Offers a Plan to Retool An Overloaded Phone System] WESTWOOD, Kan. -- The telephone system -- a honeycomb of copper wires, wooden poles and electronic switches -- has served its purpose for decades. But in the dawning age of the Internet, it is swiftly turning into a relic, and the fix will cost billions, realigning the industry. Sprint Corp. fired a big salvo in this new wire war Tuesday, announcing a radical -- and risky -- network redesign that could alter the way communications services are delivered, what they cost and how you are billed for them. Sprint has spent $2 billion in the past few years quietly pursuing this project, code-named FastBreak. A decade ago, Sprint one-upped bigger rivals by installing an all-fiber network, forcing competitors to follow suit. Today it is betting that a new network can increase the company's call-handling capacity 17-fold, cut the costs of long-distance calls by 70% and set new standards for service and billing. Another 'Pin Drop'? "FastBreak is our next 'pin drop,' " says Sprint Chairman William T. Esrey, alluding to the company's old slogan that its fiber-optic network was so clear that you could hear a pin drop. Here's the problem for the big telecom players: The dumb old dial tone can't accommodate today's digital-data explosion. Existing networks devote too many resources to handling each phone call. This "circuit switch" design is inefficient; when you pick up the phone and dial a number, a switch opens up a single, dedicated circuit from your phone to the phone you are trying to reach -- and keeps it open until either side hangs up. The design yields high-quality voice communications. But it is overburdened in handling data, particularly the booming traffic from PC users who keep their phone lines open all day to surf the Internet. The open circuit can't be used, meantime, for anything else, though it is large enough to handle other traffic. Changes in Billing Internet-design lines, by contrast, don't dedicate an entire circuit to one call. Instead, these systems break up all kinds of traffic into manageable chunks of digital bits, sending them on many parallel avenues and recombining them at their destination. Rather than use the traditional system of switching centers, Sprint's new system employs components of the Internet age -- high-speed switches, data-packet routers and optical fiber. It is scheduled to begin commercial operation later this year. Sprint calls its system the "Integrated On-demand Network" or ION. The system would measure and bill for service based not on the number of minutes a person spends on the phone but on the number of digital bits the customer transmits in a given month. Usage would be measured by a little box that acts like an electric meter and is placed in a home or office. The Marketing Challenge "The Sprint system will eliminate the old circuit-switching on which the entire phone industry has been based for more than 100 years," while it will still be compatible and able to communicate with the older networks, says former Sprint executive Richard Smith, who now is chief executive of Bellcore, the old R&D arm of the Bell system. "The world-wide implications of this for phone companies and their suppliers are enormous." That is, if Sprint can make it work. The No. 3 long-distance carrier is stepping out on a limb. It must line up agreements with many local carriers to ensure access to businesses and homes. It must persuade these customers to shell out $200 for each gizmo that will act as a meter on the monthly traffic. Sprint also has to communicate clearly the advantages of the system to customers who usually don't care how their system works -- as long as it is as dependable and inexpensive as possible. "The biggest hurdles are execution -- we're working with a number of key vendors -- and marketing," says Sprint's chief executive, Mr. Esrey. "Will people understand the service? Can we communicate it effectively?" Sprint will see plenty of competition. AT&T Corp., WorldCom Inc. and the Baby Bells are racing to upgrade their networks for data at a cost of billions of dollars. But those companies appear to be focusing on improving existing networks, while Sprint is proposing scrapping the old design for an entirely new system. ION's enormous transmission power would be delivered much like a utility delivers electricity, connecting existing phone lines in a business or home to the Sprint network -- and bypassing the local phone companies' facilities. The hookup would be akin to a huge pipe able to carry traffic that now requires many phone lines. Multiple phones and PCs could be operated simultaneously in much the same way electric customers can run an air conditioner, television and lamps all at once; customers would simply toggle back and forth among different uses by punching the phone's keypad. Customers would, in essence, always be on-line through this live connection to the Sprint system. With this kind of power, Sprint officials say, customers could surf the Net at speeds up to 100 times as fast as conventional data modems, send e-mail, transmit video and, oh yes, make multiple phone calls -- all on the same wire at the same time. Moreover, Sprint says businesses would pay only for what they use instead of having to purchase their own dedicated high-volume lines that often go unused for hours. Sprint's own costs would also fall substantially. "On the voice side, the savings is huge," Mr. Esrey says. The cost to deliver a long-distance voice call "will easily drop by more than 70% and perhaps to as little as 10% of what it costs today," he says. That should allow Sprint to transmit a full-motion video call for less than it now costs to carry a long-distance call, he adds. Sprint began installing higher-capacity fiber-optic gear and testing new technologies and software about five years ago. Then, 18 months ago, Mr. Esrey ordered that a team of top engineers be assembled to accelerate the company's move toward a new network. The order came as the telecom business is undergoing huge changes. New laws have opened markets for competition while customers are clamoring for better data transmission, packaged services and simplified billing. Soon the Bells will invade Sprint's turf, offering their own packages of long-distance services. Sprint needs a counterstrategy -- at the same time it is building a $10 billion national wireless system. Many telecom giants have been slow to face the challenge. And new networkers, such as Denver-based Qwest Communications International Inc., have leapfrogged past the incumbents with smarter designs compatible with the Internet. These systems route calls and information in the same way -- as digital bits of computer code, zapped at the speed of light. The bits are placed into electronic envelopes called packets, and the freight is delivered on fiber-optic lines. The new design handles traffic more cheaply than the old circuit-switch set-up, and costs fall even farther because the network can avoid the access fees that long-distance companies typically pay to local phone companies for routing calls. Already, rates are plummeting on certain services. Faxes can be sent via the Internet, undercutting regular phone charges. Sprint's once-trendsetting flat-rate charge of 10 cents a minute on long-distance calls now looks expensive next to Qwest's 7.5 cents a minute and ICG Communications Inc.'s 5.9 cents a minute via the Internet. Sprint executives decided that simply marketing me-too telecom services, particularly against the Bells, would be ludicrous -- especially when Sprint had to spend a fortune revamping its network for the data age. AT&T lost billions reselling Bell local service, and MCI's similar effort helped kill its plan to merge with British Telecommunications PLC. "MCI had been executing under the old phone model," putting in its own lines and switches against the Bells, notes Kevin Brauer, president of Sprint's National Integrated Services. "We saw that and said ... 'Look what's happening to them.' " 'Collapse' the System In March 1997, Sprint's engineers recommended that the brass "close the book entirely" on building traditional switching networks. Instead, says Mr. Brauer, the new network could give customers any-distance communications billed by the bit, not by the distance of the call. Rather than operate a "multiplicity" of phone and data networks, Sprint should "collapse" everything it runs into a single efficient system, the engineers advised. Two months later, Mr. Esrey told Mr. Brauer to assemble a team of Sprint's top technical and operations executives. The former president of Sprint Business, Mr. Brauer was now senior executive of Growth Initiatives. "We sweated writing press releases that wouldn't make it sound like Kevin was being demoted to some staff ... role without having to say what he was really up to," recalls Sprint's public-relations director Bill White. For three months they worked in a nondescript building with blacked-out windows in a suburb near its headquarters in a Kansas City, Kan., suburb. Mr. Brauer's team tapped the company's telecom suppliers, Northern Telecom Ltd. and Lucent Technologies Inc., for feedback. "We asked the suppliers 'Are we ahead of our time?' and they came back with, 'Gosh, this is big. It will take a lot of time,' " Mr. Brauer recalls, adding that some Sprint veterans didn't welcome the move, either. Cisco Systems Inc. plugged in quickly. The kingpin of Internet networking, Cisco told Sprint, "That's the way the world is going," Mr. Brauer says. "That was a very positive experience for us. It galvanized us." Sprint's project is certain to rattle the $250 billion telecom equipment and software industry. In choosing Cisco as the primary supplier and design coordinator of the network, Sprint has pushed aside traditional telecom suppliers. For software to keep the system running with top reliability, Sprint is turning to the independent R&D powerhouse Bellcore. Sprint, meanwhile, has canceled an order for new multimillion-dollar Nortel digital circuit switches. Instead, the company seeks to build a network based on high-powered ATM (asynchronous transfer mode) switches from Nortel and others. These machines can accept massive streams of bits from all kinds of networks and send each bit to its proper destination as a phone call, Internet message or video signal. Speed of Light Those big switches link to Cisco routers and software, which direct digital traffic. Potent "wave-division multiplexing" systems enable Sprint to transmit bits on individual colors of the light spectrum, boosting carrying capacity to 34 million simultaneous phone conversations from two million today, and expanding the capacity of Sprint's fiber backbone and its 169 fiber-optic rings that encircle many of the country's largest cities. At the local level, Sprint hopes to bypass the phone companies -- and their access fees -- by leasing space in the phone companies' switching centers and installing its own connecting frame. (It isn't yet clear how much Sprint will have to pay for each customer line.) This would let Sprint directly connect to a subscriber's copper wire, setting up a link between its own network and the meter at home or in the office. That approach will require the cooperation of the Bells, which must provide Sprint with access to their customers. Mr. Esrey has been nailing down agreements with local carriers to connect customer lines directly to Sprint's system, and he plans to announce the roster of providers shortly. The new service will be sold in stages: to large corporations by later this year, general availability to businesses by mid-1999, and to consumers by late 1999. The cost of the service hasn't been determined. But heavy users are the primary targets -- "the kind of consumer who now spends, say $30 to $40 a month on long-distance or $100 to $125 a month for everything including voice calls and Internet access," says a senior Sprint executive. Radio Shack, which sells Sprint wireless services, will market ION through its 7,000 stores. Those who spend a few bucks a month on long distance will still get their traditional service from Sprint, the executive says. Several major business customers have signed up for ION, say Sprint executives. These include Coastal States Management; Ernst & Young LLP; Hallmark; Silicon Graphics; Sysco Corp.; and Tandy Corp. (which is Radio Shack's parent). "This will allow us to combine all of our traffic -- voice, data and video -- into one path," says Larry Hardin, Sysco's director of operations & communications. The giant Houston food distributor deals with other major carriers, he says, but none "have approached me with something this revolutionary." Compared with Sprint's "pin drop" campaign, this network will be a "bomb drop," says Gartner Group analyst Kenneth McGee, one of the few outsiders who has seen the plan and tried the service. "This is the most profound change in networking that I've seen in more than a decade." Sprint executives say FastBreak is critical if the company is to become a truly global carrier. Despite a strengthening core business that generated $15 billion in revenue last year, Sprint is widely regarded as raider bait. Bigger phone companies are combining, and GTE Corp. or one of the big Bells could buy Sprint to aid their expansions. While the French and German national phone companies each own 10% of Sprint, Mr. Esrey says the rest of the company isn't for sale. Still, he has fueled such talk, perhaps inadvertently, by complaining publicly that the stock price, at nearly $72, is undervalued by at least $25 a share. Let others rush into megamergers, says Mr. Esrey with a dismissive wave of his right hand. "This is the most important move our company has ever made. FastBreak sets us apart."