Posted: 02/2000
Leap of Faith
OLD CARRIERS PUT TRUST IN ATM SWITCHING
By Peter Lambert
If an incumbent telephone company could improve its trunking network occupancy rate from 60 percent to 90 percent, would it jump from a reliable, hundred-year-old infrastructure to gain that improvement?
If a competitive carrier could lower its market-entry costs by up to 90 percent, would it take a leap of faith and deploy a relatively unproven, new class of switches made by manufacturers with names unheard of among a savvy customer pool?
During the past several months, a few real-world service providers have begun to do just this. In doing so, they hope to alter the economics of long distance and local telephony. Some believe they also may make resale and arbitrage of the advanced broadband and integrated access services a difficult proposition.
In the incumbent carrier world, the first preemptive strike against advanced services resale may have come in the closing weeks of 1999 from RBOC SBC Communications Inc. (www.sbc.com).
SBC committed $6 billion to a radical overhaul of its infrastructure that will, during the next several years, entail the scrapping of its entire circuit-switched, tandem trunking network in favor of voice trunking over asynchronous transfer mode, or ATM, switching (VToA).
At the same time, a relatively new backbone carrier Global NAPs Inc. (www.globalnaps.com), also committed to migrating all its traffic to VToA. And in another case, next-generation CLEC 2nd Century Communica-tions Corp. (www.2c2.com) began to build VToA backbone networks and to bring ATM telephony to customer doorsteps in the local loop.
In Los Angeles, AirPower Communica-tions Inc. (www.airpower.net), an emerging local multipoint distribution service (LMDS), broadband wireless carrier, also is breaking with convention and experimenting with integrating all its services over new Dynamic Transfer Mode (DTM) switches from Dynarc Inc. (www.dynarc.com).
SBC's Project Pronto "represents the kind of fundamental change that only comes every 60 years," says Sam Sigarto, executive director, ATM distribution network systems, broadband switching, for SBC.
In three years, the project is designed to migrate all SBC backbone traffic to ATM and to extend the reach of DSL broadband access to 80 percent of SBC's customer base.
The two prongs of Project Pronto are not unrelated. For the asymmetric DSL (ADSL) data services already deployed in SBC's local loops, the transport technology is already ATM. Although Sigarto says "the jury is still out" on whether DSL voice traffic also will travel over ATM virtual circuits (VCs) in the local loop, voice and data certainly will travel via ATM transport in SBC's backbones.
Because ATM has statistical multiplexing capability--that is, the ability to have multiple services dynamically share the same bandwidth--the new ATM backbone promises to raise SBC's trunking bandwidth utilization from about 60 percent to approximately 90 percent. That is one reason the carrier expects the new infrastructure will generate $1.5 billion in capital and operating expenses annually, Sigarto says.
"You can leverage statistical multiplexing to gain efficiency transporting bursty data traffic as well, but voice alone looks like it could pay for the investment in ATM trunking," he adds.
Capital and operational cost savings also weigh heavily for Global NAPs. Specializing in providing bulk lines to Internet service providers, including Microsoft Corp.'s MSN (www.microsoft.com) and Mindspring Inc. (www.mindspring.com), Global NAPs expects to kill two birds with one stone with a $50 million deal to buy 75 Integrated Convergence Switches (ICSs) from Convergent Net-works Inc. (www.convergentnet.com).
First, the Convergent ICS can lower costs per DS-0 voice circuit from the $200-to-$300 range to $25. These savings are a boon for the company's plans to expand its national presence to 85 percent of U.S. markets in the next two years.
"So I'm effectively going to cover 10 times more new markets than I could with more [Nortel Networks Corp.] DMS 500 [Class 4 circuit] switches," says Global NAPs' chief executive officer Frank Gangi.
Second, Convergent managed to carry live traffic within four hours after bringing its switch to Global NAPs' Boston office, while Nortel Networks (www.nortelnetworks.com) could not claim the same for its DMS 500 after two months, Gangi says. "That shrinks my time to market from forever to basically zero."
At the same time, he adds, "the Convergent switch is a Swiss army knife that can help us migrate our entire network to ATM while also talking to any other network, whether IP or ATM or the public switched telephone network."
For Global NAPs and SBC, integrating services onto one backbone with one, common transport infrastructure has become the most economical path.
"Is ATM optimized for voice?" asks SBC's Sigarto. "No, nor is it optimized for IP alone or video alone, but we need to build not six optimized networks for six separate services at six times the cost, but one network that can accommodate all those services, and ATM gives us the capability now to build that one network, and it may cost us 11/2 times what a single-service network would."
Graph-ATM Rides Last-Mile
Integrated Access Wave
Match This
These changes in network fundamentals may raise the stakes for all carriers. RBOCs in particular can call the technology tune, as they provision more than 90 percent of all access lines, notes Tom Nolle, president of telecommunications consulting firm CIMI Corp. (www.cimicorp.com).
Where new players Global NAPs and 2nd Century have committed $50 million and $30 million, respectively, SBC will spend $6 billion over the next several years. Other RBOCs have vowed to spend equally impressive amounts to transform their networks to packet transport.
In short, the type of technology that RBOCs provision local lines--with ATM switches, IADs and DSLAMs, for example--matters for all carriers that must either access or compete with those networks, especially if the technology becomes difficult for competitors to unbundle for resale.
"It's well established that investment in packet technology can lower the costs of networking," says Nolle. "But that's meaningless if the savings gained can be wiped out by reseller arbitrage."
Incumbents like SBC gained relief from having to unbundle and wholesale packet services last September, when the FCC issued a new UNE list--those pieces of the incumbent's networks that must be made available to competitors. Incumbent phone companies must provide local loop access and other basic network elements, but they aren't required to offer competitors access to new high-speed data networking systems.
"By not requiring incumbent carriers to unbundle DSL equipment, the FCC recognizes the importance of facilities-based competitors," Steven Gorosh, general counsel of national, facilities-based DSL competitor NorthPoint Communications Inc. (www.northpointcom.com), said at the time. The decision, he added, will prompt further investment in facilities-based DSL deployment by both incumbents and competitors.
According to SBC's Sigarto, that ruling played a small strategic role in SBC's decision to commit to its broadband network rebuild. "It was certainly one of the key attributes, but only one among others," he says.
Yet even if the RBOCs eventually must unbundle their broadband network and service elements, Nolle says, ATM's elegant, dynamic bandwidth provisioning capabilities enable a facilities-based carrier to create services that are customized for each end user.
The more customization, the more difficult for resellers to replicate without ATM facilities of their own.
Certainly, some new competitors are taking that facilities investment challenge. For example, while Global NAPs applies ATM to bulk line wholesale in its backbone, 2nd Century and Gabriel Communications Inc. (www.gabrielcom.net) are determined to effectively over-build phone companies' circuit-switched local loops with integrated access networks based on ATM packet transport.
Sporting its own $30-million contract with Convergent Networks, 2nd Century successfully completed interconnect testing last summer, carrying voice traffic between 2nd Century's ATM-based local exchange network and incumbent GTE Corp.'s (www.gte.com) facilities in Tampa, Fla., all under the control of standard Signalizing Systems 7 (SS7) signaling.
For its first local ATM telephone transmission, 2nd Century used Convergent's ICS in conjunction with VINA Technology Inc.'s (www.vina-tech.com) Multiservice Xchange (IAD) to encapsulate in ATM cells all voice, data and video at the customer site; then Advanced Switching Communications' (www.asc1.com) RBOX Multi-Service Aggregator aggregated traffic from those IADs, passing it to the ICS switch.
VINA, along with Accelerated Networks Inc. (www.acceleratednetworks.com), Sonoma Systems Inc. (www.sonomasystems.com) and other manufacturers are developing ways to deliver local calling features via IADs, which will be necessary to bring local ATM telephony into parity with the legacy PSTN. TeraBridge Technologies Corp. (www.terabridge.com) has launched an interoperability laboratory to prototype complex network signaling environments for vendors and carriers participating in the ATM Local Telephony Alliance (www.altainfo.org), and it is pitching its PathMinder software suite for call control session management.
Further, Convergent, TeraBridge and half a dozen IAD vendors have agreed to use the International Telecommunications Union's (www.itu.int) Q.2931 call control signaling standard and to implement Q.2931-to-SS7 interworking, enabling the translation of PSTN local call features to any local ATM system.
"Call control is now decoupled from transport," says Seng Poh, vice president of technology and business development for Convergent. "So now you can define new features, program them on open softswitch servers, and have them run across any network that can be signaled."
Provisioning In Play
The emergence of DSL and other broadband access technologies, combined with packet telephony technologies and customer requirements for delay-free voice services, makes DSL and ATM natural bedfellows, according to ATM advocates, who note that many DSL systems already are driving ATM down to the customer premises.
Pitching ATM as the best quality assurance for voice over DSL (VoDSL) traffic, IAD makers are adding DSL interfaces and partnering with VoDSL gateway makers. "Service providers are saying they want to reduce costs but not at the expense of the customer's experience," says Matt Howard, vice president of marketing for IAD maker Vertical Networks Inc. (www.getvertical.com), which has partnered with several VoDSL gateway makers. "We expect it will be 18 months before a customer could go completely IP in the last mile."
Heidi Brandt, vice president of corporate marketing for Sonoma Systems, which, like Vertical Networks, has integrated PBX capabilities in its Sonoma Xchange IAD, agrees. "We just don't see service providers carrying IP services that require QoS (quality of service) except over ATM."
Indeed, according to industry researcher Cahners In-Stat Group (www.cahners.com), IP telephony-based services are the key driver behind a rise in ATM investments by ISPs. Sales of wide-area ATM switches to service providers saw growth of 25 percent during the second quarter of 1999, growing from $441 million to $554 million--following only 3 percent growth in the first quarter of the year, Laurie Gooding, senior analyst with Cahners In-Stat, says.
"ATM switching and VoIP gateways will see parallel growth throughout 1999," Gooding says.
Whether it travels as VoIP over DSL or as VoIP over ATM over DSL, new VoDSL that supply up to 16 voice circuits per customer "will increase the need to connect with a switch that can talk with the PSTN, and that can either be a $5 million Class 5 switch or a $500,000 next-generation, class-independent switch like ours," says Dan Simpkins, president and CEO for Salix Technologies Inc. (www.salix.com). Salix is the maker of class-independent switches that constitute large-scale voice-over-any-transport gateways.
Whatever the underlying transport, integrated voice and data access requires the ability to route multiple services over a single pipe and to provision bandwidth, encryption, firewall, filtering and any number of other network resources on a per-session basis.
"The urgent need for dynamic, rapid provisioning systems is in the metropolitan area, where broadband access will push capacity requirements from kilobits to megabits per user," says Olov Schagerlund, chief executive officer for Dynarc, whose DTM switches provide a "thin layer" between optical and IP networks for transport of integrated services. "You must have a transport layer that makes it easy to provision new services, because service providers will need to launch and relaunch new services, experimenting to find the killer application."
Even IP router king Cisco Systems Inc. (www.cisco.com) is targeting this rapid provisioning and packet trunking market with its IP+ATM family of carrier multiservice platforms.
In December, carriers' carrier Williams Communications Group (www.williams.com) bought the newest product in that line, the MGX 8240 private line gateway. The MGX 8240 is designed to boost the value of multiservice ATM packet networks by providing ATM trunking interfaces for private line, T1, circuit-switched voice traffic, and T1 IP services, which includes virtual private networks.
"With more than $24 billion in annual leased line service revenues at stake, service providers need to turn up reliable and value-added services faster than the competition," says John Morency, executive vice president, Sage Research (www.sageresearch.com), who praises the gateway product.
Gabriel Communications, 2nd Century, Global NAPs and SBC, as well as Sprint Corp. (www.sprint.com), with its Integrated On-Demand Network (ION), have decided that ATM provides that dynamic provisioning, fail-safe traffic engineering and QoS guarantees on a per-connection basis.
However, IP advocates, such as backbone Terabit Switch Router maker Avici Systems Inc., (www.avici.com), argue that routers are the logical nexus for packet service provisioning.
"We believe the dynamic provisioning solution lies ultimately with intelligent routing directly into optical wavelengths or via optical cross-connects, because the router is the device with visibility into the data stream," says Pete Chadwick, vice president of product marketing for Avici.
Still emerging from the Internet Engineering Task Force (www.ietf.org) and in product development among router and switch makers, a multiprotocol label switching (MPLS) standard proposes to enable ATM-like virtual circuits between points on IP networks.
"There's a lot of interest in learning to do traffic engineering via MPLS, and to have that interwork with optical provisioning systems," Chadwick says. "One service provider tells us it expects to have terabit routing at its edge and all optical switching of huge capacity in its core, so there are a range of visions in play."
For the first time in service provider local loop history, ATM has become the lens for one of those visions.
