Tele.comMay 29, 2000, Issue: 511 Section: FEATURE ARTICLESPieces of Concern -- The communications market is one big puzzle, and CLECs are scrambling to find the right fit. By Paul Korzeniowski The competitive telecommunications world is something of a puzzle, to say the least. At first glance, it seems like providers should have all the right pieces at hand to create a smooth interlocking business that not only fits together snugly and securely but is also pretty attractive. Well, so much for first glances, as a lot of competitive local exchange carriers (CLECs) will tell you. Sure, plenty of pieces are floating around the market, but they don't always fit together nicely. Some pieces, in fact, seem to be missing entirely. Nowhere is this clearer than in service deployment. CLECs, quite understandably, want to roll things out quickly and go after the bits of the market with the brightest potential. It's a sound idea, and it would probably pay off handsoRLPy if the hardware to do this were available. Unfortunately, it's not, which forces CLECs to follow the lead of incumbent local exchange carriers (ILECs) and install the same expensive "big iron" equipment, whether it fits properly into their business plans or not. This is changing, although it remains to be seen how fast. Nonetheless, it is fair to say that CLECs are about to graduate from Class 5 to a new generation of multiservice platforms -- capable of carrying Internet protocol (IP) and circuit-switched traffic and consolidating functions that previously were supported in separate, standalone devices. These new switches promise to both extend the reach and simplify the process for carriers. They will be able to deliver services in new regions by decreasing the capital needed to build out and simplifying network management. Market followers The Yankee Group (Boston) expects worldwide sales of these devices to rise from $16 million in 1999 to $824 million in 2003 (see "Sales Force"). This growth will be driven by startups such as BroadSoft Inc. (Gaithersburg, Md.), Convergent Networks Inc. (Tewksbury, Mass.), Salix Technologies Inc. (Gaithersburg, Md.), Sonus Networks Inc. (Westford, Mass.), Taqua Systems Inc. (Hyannis, Mass.), telecom technologies Inc. (Richardson, Texas), Tachion Networks Inc. (Eatontown, N.J.) and Unisphere Solutions Inc. (Burlington, Mass.). Familiar names Lucent Technologies Inc. and Nortel Networks Corp. will also be heard from. While the outlook for programmable switches is excellent, today they are still prototypes more than tested products. The equipment vendors have just begun delivering these systems, and questions abound about reliability, scalability and feature sets. For instance, West Coast CLEC TelePacific Communications (Los Angeles) is installing Tachion Fusion 5000 switches but doesn't expect them to carry live customer traffic until the second or third quarter, when Tachion adds features such as call waiting and call forwarding, says TelePacific chief technology officer Mike Lee. Since launching in January 1999, TelePacific has relied on the poster boy for big iron-Lucent's 5ESS switch-to support its voice services. Because of the questions, established carriers have shied away from the new switches. But CLECs and integrated communications providers (ICPs), which arguably have less to lose due to their newness on the scene, have been most interested in the value proposition that lies behind the immediate concerns. These carriers think the new systems will offer them a competitive edge and help persuade businesses and residential customers to switch from established telecom service suppliers. Lower price -- a key element to a startup -- is a benefit with the new switches. A central office (CO) switch is a multimillion-dollar commitment, whereas the new systems can cost between one-half and one-tenth as much. The savings are possible because the new devices merge a variety of separate packet- and circuit-switched functions into one platform (see "Ordering a la Carte"). The idea is that costs are lower because operators are only adding functionality as they need it -- and as the market justifies. Because they are different and far more agile animals, convergent switches are simpler to deploy. This reduces a carrier's infrastructure costs. The need for mundane but expensive elements -- real estate, custom air conditioning systems, backup electric power and new flooring systems -- are either eliminated or sharply curtailed. And since the switches merge data, voice and video functions onto one line, service providers can lower their connection costs. CLEC ITL Metro (Seattle) has been monitoring developments with the new convergent switches for three years. "Since our inception, we anticipated a technological leap that would enable carriers to deploy new services faster and more efficiently than has been the case with traditional CO switches," says ITL Metro CEO Joël Eisenberg. The company apparently thinks that leap has been taken. At the beginning of the year, it purchased Broadsoft's BroadWorks system. ITL Metro, which offers services in Seattle, New York, Puerto Rico, London and elsewhere, is internally beta testing the product this spring. It expects to bring customers in select areas online at the end of the second quarter. It will begin working with resellers to roll out services based on the switches during 2001. "Because the technology is so new, we have a conservative deployment schedule," Eisenberg says. In addition to simplifying the underlying switching equipment, the new DEVICES FEATURE open application program interfaces (APIs) designed to expedite the introduction of value-added services. "With central office switches, we have to wait at least six months for the equipment vendor to add a feature, and then all of our competitors also have it," says Brian Butler, vice president of engineering at ICP Gabriel Communications Inc. (Chesterfield, Mo.). "With the new switches, we will be able to go in and make any needed changes ourselves." The convergent switches separate the service logic that activates, controls, bills and monitors value-added services from the underlying transmission and signaling hardware. This enables carriers to add new services by changing software rather than fiddling with the devices themselves. Service providers also like the fact that they can offer both circuit-switched voice functions (such as caller ID and call waiting) and packet-switched services (such as Internet access, e-mail, Web browsing and e-commerce.) Gabriel Communications is another customer of Tachion's Fusion 5000. The carrier has begun testing the switches with various integrated access devices (IADs), which sit at customer sites. It expects to begin deploying service based on the new CO switches during the summer and could buy as much as $40 million worth of Tachion switches during the next two years. Gabriel serves 14 markets in Missouri, Kansas, Oklahoma, Arkansas, Illinois, Indiana, Ohio and Kentucky. These devices, it seems, are on the cusp of being ready for prime time. However, there is a fairly lengthy list of potential problems and areas in which the devices need to mature. The list includes capacity, system reliability, management functionality, scalability and feature sets. Capacity. Convergent switches are not as functional as current big iron CO switches. "I've been telling the switch manufacturers that there is a big difference between hitting a baseball, thrown by a minor-league pitcher who may throw 50 miles per hour, and a major-league pitcher who throws 100 miles per hour," says Hussein Eslambolchi, vice-president of data and Internet network services at AT&T. "To date, they have demonstrated scalability only on small networks and nothing like the scope of our network." The devices can handle about 200,000 busy-hour call attempts (BHCAs) and hundreds of millions of calling minutes per month, but they fall short of the 1.5 million-plus BHCA level and billions of minutes per month that most Class 5 CO switches can process. System reliability. "Many of the new convergent central office switch suppliers come from a data background, where it is common for users to reboot their PCs after system failures," says Eslambolchi. "They are starting to understand that that's just not acceptable in a carrier network and have been adding more reliability features to their products." Management functions. Since the new devices support more functions, they have more potential trouble spots. Consequently, troubleshooting becomes more complex. Vendors claim to be building management systems designed to identify problems. How well they will function in complex, multiservice networks is uncertain. In addition to keeping the devices up, carriers need to monitor network usage and bill for their services. For that to occur, the new switches must tie into existing operations support systems (OSSs), such as billing and provisioning. Creating these links is part of the maturation process. "From what I've seen, the new systems do not offer as much connectivity to OSS systems as carriers would like," says Christin Flynn, an industry analyst with The Yankee Group. Feature sets. Class 5 switches have been around a long time, and developers have been working during that time to provide what customers want. Lucent has honed its products so that they offer more than 3,000 services. "The new switches have a ways to go before they match the features found with central office switches," says Carole Bradley, director for voice and infrastructure at Intermedia Communications Inc. (Tampa, Fla.). The carrier serves 90,000 small and midsize businesses in the United States. In certain cases, carriers plan to move ahead without all the functions. "A lot of the features found with central office switches, like party lines, are geared to residential services, which is not our initial target market," says ITL Metro's Eisenberg. "The new switches support enough functions that we can offer businesses a variety of services, and we expect new features will be added quickly to the systems." Larger carriers are not faced with an all-or-nothing proposition. The convergent switches allow them to offload specific functions from large, expensive CO switches to smaller, less costly platforms. In early 1999, Internet traffic was starting to overrun one of Intermedia's Nortel DMS-500 switches. Rather than buy another multimillion-dollar CO switch, the carrier purchased Sonus' GSX9000 Open Services Switch. The idea is to offload Internet traffic from the voice network. In this scenario, modem-generated Internet traffic destined for remote access servers is diverted from the legacy circuit switch before hitting the DMS-500. The big iron switch is thus free to process voice connections. At the end of last year, Intermedia tested the product in its laboratory. It plans a beta test in the spring, one CO installation during the second quarter and possibly a dozen implementations by year's end. Another option is waiting for existing equipment vendors to enhance their products with more next-generation features. For instance, Lucent has delivered its 7R/E product, which adds a packet interface to its 5ESS switch. ICP Cannect Communications Inc. (Vancouver, Canada) is working with Nortel's Succession product line, which is designed to add converged CO switch functions to the vendors' switches. Cannect is building out its network with three Nortel elements: the Succession Communication Server 2000s, the Universal Edge 9000 Media Gateway and the Preside Integrated Network Management system. "We felt that the other equipment vendors could not offer us as much scalability as we needed in our network," says Cannect president and CEO George Horhota. The carrier serves Vancouver, Toronto, Calgary and Ottawa. It plans to begin introducing services based on the network equipment at the end of the summer and could spend as much as $67 million on Nortel equipment as it expands its network during the next five years. But this approach has a big trade-off-complexity. "The legacy system vendors have not yet been able to bundle all the various CO functions in a single system, so carriers still must maintain and manage a number of separate devices," says The Yankee Group's Flynn. Suppliers are working to address that problem as well as enhance their products' appeal to ICPs and CLECs. "We've cut the size of our switch in half and disabled some residential services, so a CLEC should be able to install a new central office switch in a month," says Pat Price, Lucent's director of switch product marketing. The question of the hour is: When will vendors combine the conveniences offered by the converged switches with the reliability and scalability present in legacy CO switches? In other words, when will these devices truly be ready for prime time? "We expect the new switches will probably be able to support our services later this year but definitely by early next year," says Gabriel Communications' Butler. Perhaps not surprisingly, larger carriers are a bit more conservative. "I would say it will take another 18 to 36 months before the convergent switches offer us enough functionality that we will consider deploying them in our network," says AT&T's Eslambolchi. One important thing to note is that it has become a question of when, not if. Nobody doubts that the new switches will eventually overtake the current products. This suggests a future in which both incumbents and newcomers will have a powerful new tool offering significant flexibility in the deployment of new platforms and the applications running on them. "The benefits that the new switches offer are so enticing that all carriers eventually will incorporate them in their networks," says Paul Langmeyer, a director at market research firm Ryan Hankin Kent Inc. (South San Francisco, Calif.). --- The Heart of Convergence. For providers looking to integrate their services, convergent switches are the way to go. They don't cost much, have easy-to-implement voice functions and can replace a passel of autonomous devices. "Carriers want to offer integrated telecommunications services, and that can best be done with integrated network devices," says Mike Clement, a senior product manager at Unisphere Solutions Inc. (Burlington, Mass.). The convergent central office (CO) switches usually include several elements generally supported by separate devices. A frame relay switch carries an enterprise's legacy traffic from branch offices to central computers. An asynchronous transfer mode (ATM) switch aggregates voice and data for carriage over various high-speed lines. Synchronous Optical Network (Sonet) add/drop multiplexers (ADMs) enable carriers to collect and funnel data from leased lines onto high-speed fiber optic networks. Routers provide Internet protocol (IP) connectivity. Other features deliver value-added services that run on top of these network connections. CO switch functions include business services (such as automated attendants and 800 lines) and residential services (such as caller ID and directory assistance). A softswitch delivers emerging Web-based value-added services such as unified messaging. Since these new devices straddle the line between the public switched telephone network (PSTN) and the Internet, they include a Signaling System 7 (SS7) gateway to move traffic between the two networks. Collecting all of these functions into one system is now possible because the underlying technology has matured rapidly. Microprocessors have increased in power to the point where vendors can construct an ATM switch or a Sonet multiplexer from a handful of special-purpose application-specific integrated circuits (ASICs). An SS7 protocol stack can sit on a couple of chips. All of these chips can then be integrated into a single system. Also, an IP router now takes up only one slot in a switch. Overall component costs are so low that an equipment vendor can increase reliability by including dual system boards. In addition to the hardware improvements, the new systems take advantage of recent software advances. These systems rely on Web browsers for setup and configuration, so provisioning can be done via a simple drag-and-drop format. The switches will speed installation and simplify maintenance. "With the new convergent systems, we will be able to move into new service areas in weeks rather than months and add new services instantly rather than wait for months for vendors to enhance their switches," says Mike Lee, chief technology officer for TelePacific Communications Inc. (Los Angeles), a competitive local exchange carrier (CLEC).
Paul Korzeniowski is a freelance writer based in Sudbury, Mass. He can be
reached at pkorzen@aol.com.
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