A New World Calls
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 [email protected].
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
