Posted: 01/1999
A New World Calls
By Kevin Kennedy
In the world of telecommunications, we are at the dawn of a new age.
At first blush, that statement may sound like hyperbole. However, it is no exaggeration. Driven by the rapid spread of the Internet, a new world network is emerging. In this new world, a digital, packet-based voice and data network quickly is replacing its analog, voice-based predecessor. And, with this paradigm shift, new business opportunities abound for service providers that have the vision to aggressively capture the surging demand for integrated voice and data services.
Actually, the Internet is helping to create this new world network on several levels.
At the most basic level, Internet traffic has created tremendous congestion on traditional circuit-based voice networks. Every day, the Internet transmits more data over the public switched telephone network (PSTN). Moreover, the average Internet connection lasts more than 10 times longer than the average telephone call, creating traffic engineering nightmares. These developments have led service providers to consider ways to relieve the notoriously choked voice network.
Secondly, users are demanding greater bandwidth from the public network. Increasingly, customers have become frustrated while they wait for web pages to download or for attached files to upload. In fact, despite faster modems, the average download rate has increased by about eight seconds over the past year. This delay can be attributed to both a stressed PSTN and to more sophisticated graphic content on the World Wide Web, which have combined to diminish a user's online experience.
Lastly--and perhaps most importantly--users are demanding that their service providers offer multiple services through their networks. Of course, users want complex web pages to download instantly. But they also want integrated voice and data services that finally will permit such long-promised applications as remote training, distance learning, distributed customer contact centers, real-time video and complete home-office capabilities. Ultimately, the provision of these services will change the nature of the public network and provide the greatest benefits to both the user and the service provider.
The new world network addresses each of these needs and opportunities. In essence, the new world network recognizes a key reality: that the transmission of data is quickly becoming as important--if not more important--than the transmission of voice. In fact, the transition from a circuit-based business and technology model to a packet-based model is likely to occur at a speed akin to the incredible growth rate of the World Wide Web, which, in less than two years, ballooned from almost no infrastructure to about 10 million web servers. Providers who recognize this fact can get a leg up on the competition by being first to offer robust, bundled data and voice services.
In this migration from a circuit-based to a packet-based model, the new world network will rely on several core technologies. These include:
* Internet protocol (IP) technology. For many years, IP has been the primary network layer protocol to pass data over the Internet. Now, however, IP also is being leveraged for voice traffic, making it the perfect means for the transmission of combined data/voice services. In addition, IP is capable of providing all the advanced telephony services available through the analog voice network. These services include voice mail, calling card, call center class features, roaming, alarm and many other telephony applications. What's more is IP maximizes existing bandwidth, allowing carriers to cut the cost of providing voice service. By passing on these savings, companies have the opportunity to attract new customers and, with time, market additional services to them.
* Digital subscriber line (DSL). DSL addresses a central challenge for carriers that want to better serve their customers by migrating to the new world network. It allows providers to offer dedicated access and broadband services over the widely installed base of twisted-pair copper phone lines. As mentioned previously, subscribers today are demanding more than just analog voice and data services. They want services that will enable them to receive complex graphics, file attachments and video over the Internet quickly and reliably. To achieve these goals, customers must be able to download data far faster than they can today through the best analog modems or even through integrated services digital network (ISDN) lines. DSL, a reliable, standards-based technology, gives them this ability. In addition, since DSL operates over existing copper, it can be priced aggressively, usually on a rate schedule similar to ISDN. Therefore, the technology provides an economical solution for telecommuters and has great potential for mass appeal.
* Cable technology. Like DSL, cable technology is able to transmit information to users at speeds far in excess of analog technology. And, like DSL, cable makes use of an existing communications infrastructure (the cable plant) to deliver enhanced, value-added services to customers at a very reasonable cost. In fact, cable operators and their telecommunications partners now have the ability to offer a wide range of bundled services at a variety of price points. These services include broadcast video, Internet access, integrated video and Internet access, radio, videoconferencing, multiplayer games and advanced voice services such as voice conferencing. In fact, both DSL and cable give companies a unique opportunity to enter exciting new markets, a move that will drive new sources of revenue and enhance profitability for many years to come.
Naturally, moving to this new world network will require some additional investment. However, in most cases, the new investment should be relatively small. As mentioned previously, the new world network makes use of much of the installed plant of the old, analog network. Therefore, by implementing the new network, carriers will be able to continue to leverage much of their existing infrastructure. And, for the most part, additional costs associated with the buildout will be offset quickly by subscribers demanding new IP-based voice service.
Moreover, the new, packet-based network is sleeker in design than the old voice network, which long has been marked by expensive Class 5 switches and an archaic, Byzantine system of multiplexing. The evolution is analogous to the shift from monolithic mainframes to a distributed client/server environment. In the new world, the network is composed of proven internetworking technology that provides tremendous bandwidth and high-quality network availability. In essence, the network design is less complex and easier and less expensive to build and maintain than the old Class 5-based network. And, because equipment vendors are building data devices to meet the exacting specifications of carriers and other service providers, the network will deliver world-class availability and reliability.
Today, we are experiencing a fundamental shift in the way communications networks are designed and used. The Internet is enabling people to access and deliver information instantly--from anywhere to anywhere. It now is up to service providers to create a new world network that will turn this new means of communication into a dominant business paradigm for the 21st century.
Kevin Kennedy is senior vice president, service provider line of business, for Cisco Systems Inc., San Jose, Calif. He can be reached via e-mail at kjkenned@cisco.com.
ROUNDTABLE
On universal service support ...
"Costs are higher in rural areas than in urban areas according to all of the cost
models before the FCC (Federal Communications Commission) today. Thus, it makes absolute
sense that more universal service fund support on a per-line basis will be needed in rural
areas than in urban areas."
--Roy Neel, president and CEO, United States Telephone Association
"Any universal service plan that does not embody implicit access charges would be
imprudent and inappropriate. Reform of universal service support must be coordinated with
access reform."
--Julia Johnson, chairwoman, Florida Public Service Commission
"If the FCC remains open to considering the fundamentally different ways in which
small telephone companies that serve rural customers are affected by hypothetical and
proxy model approaches to universal service support calculations, there is still room for
a reasonable outcome that applies Congress' vision to the real world."
--Kathleen Wallman, president of Wallman Strategic Consulting LLC, on behalf of the
Organization for the Promotion and Advancement of Small Telecommunications Companies
