Posted: 05/2000

Building a Next-Generation Network
By Richard Sorenson

During the past 15 years, the U.S. domestic telecommunications services market has become increasingly competitive.

Internet growth, the surge in data traffic and advances in fiber optic and other telecommunications technologies have triggered billions of investment dollars to build data-centric telecommunications networks.

Lehman Brothers
(www.lehman.com) estimates that by year’s end, the national next-generation, data-centric fiber optic networks companies, such as Williams Communications
(www.williamscommunications.com) and Qwest Communications International Inc.
(www.qwest.com), will comprise nearly 4 million fiber miles. That compares to the 3 million fiber miles traditional Tier-1 carriers AT&T Corp.
(www.att.com), MCI WorldCom Inc. (www.wcom.com) and Sprint Corp.
(www.sprint.com) deploy.

The theoretical potential capacity of 7 million fiber miles will be nearly 80 times the current capacity of traditional Tier-1 carriers.

In the local market, CLECs are developing high-speed, data-centric local networks. High-speed “last mile” alternatives have appeared in major local markets. In addition to traditional T1 and ISDN connectivity, users can select DSL service, high-speed wireless data links or cable modems.

Today’s real telecommunications opportunity is the transition from circuit-switched legacy networks to next-generation networks. The legacy networks were designed primarily to carry voice traffic to packet-switched, while next-generation networks carry data traffic at high speeds and treat voice as a data traffic subset.

In large part, the demand for data-oriented service has driven the move to data-centric networks.

Traditional carriers position IP telephony as cheap and poor quality phone calls. However, next-generation carriers, ISPs and entrepreneurs prove them wrong by leveraging IP networks with the convergence of voice/data.

In fact, data communications are the fastest growing segment of the telecommunications market. Data networking services and Internet access will grow from $6.2 billion in 1997 to approximately $49.7 billion by 2002. Nearly $27.9 billion of that will come from sales of services to businesses.

IP telephony is an emerging service that can use a managed IP network or public Internet to carry telephone traffic. However, a managed bandwidth approach is preferred, as the public Internet can have significant problems transporting voice traffic.

Corporations use VoIP products and services to cut their domestic and international long-distance bills by up to 50 percent.

The market for VoIP services is projected to grow at exponential rates during the next five years, with up to 152 billion minutes of use forecast by 2002. That would be equal to about 11 percent penetration rate of traditional PSTN usage. Users and service providers are attracted to the benefits IP telephony offers, such as ease-of-use voice and data conferencing, IP call centers, transparent routing of calls and decreased administration costs.

The first generation of VoIP products suffered from reliability and QoS issues. However, the application of sophisticated IP technology such as high-performance switches and routers and emerging IP QoS techniques is eliminating many issues in the latest generation of VoIP products.

IP Telephony

Much attention is devoted to delivering voice calls via the Internet, which is a packet-switched network of networks. Unfortunately, what has allowed the Internet to grow so rapidly makes it a poor platform for delivery of toll-grade or any type of voice traffic.

The Internet is plagued with latency problems, delayed receipt of transmitted packets or the receipt of packets in the wrong order, and jitter. A human caller is sensitive to perceived delays in voice transmission. Any delay of more than 250 milliseconds generally is unacceptable. Historically, when a phone call is placed, a dedicated circuit is established between two end points. This circuit does not share bandwidth and carries only the one conversation. A digital voice transmission requires a bandwidth of 64kbps, regardless of the gaps of silence between vocalizations. This circuit switching system is common in most phones, for which the performance and the design are understood well.

Newer packet-switched networks, notably used for digital computer communications, can take advantage of the broken nature of video, voice and data traffic by sharing the bandwidth and switching resources dynamically. When computers exchange data, they are placed into a packet header and are delivered to their destination. Packetization integrates all traffic for efficient utilization of bandwidth and resources.

For telephony, the voice signal is broken into packets containing 10 to 50 milliseconds of voice. There may be 20 to 40 voice packets delivered every second. The packets are placed into an address header and sent for delivery via the packet network. Any packet may encounter two to 30 or more routers in its path where the packet is processed and the router determines its route. Some packets get lost during congested periods. Some also may wait too long for processing and get dropped.

The key technical challenges in building an IP telephony network are managing delays and maintaining sufficient bandwidth. This requires that VoIP services are provided over a managed IP network, which can be controlled for latency and throughput.

Building a Next-Gen Telco

A gateway provides the translation functions between the IP network and the
circuit-switched PSTN network. Its primary functions are to provide the analog-digital
transcoding, the transmission formats and the communications procedures for the VoIP call. Multiple gateways per network can exist.

The second key element, a gatekeeper, provides a series of functions for the VoIP network, including admission control to and from the IP network, bandwidth control and management, and address control. In addition, the gatekeeper manages the gateways and terminals, performs directory services, collects billing and accounting data and controls registration of users.

Third, gateways need to be interoperable and gatekeepers need to interoperate. A universal gatekeeper must feature open APIs to allow service providers and software developers to develop and deploy innovative and customized services.

For the first time, these advanced technologies are being deployed for wide-scale use in critical hardware and software applications. The combination of these paradigm-shifting advancements.

We at PointOne Telecommunications Inc.
(www.point-one.net) have created a network with scalability in multiple dimensions, including ports, nodes, trunks and speed. Through platforms supporting millions of connections, robust buffering and varied speed requirements, the network supports customers’ future network growth while it increases overall performance.

The IP network uses SONET ring-type architecture offering a self-healing system that provides security and reliability by allowing instantaneous rerouting in the event of a fiber cut. Additionally, the data network optimizes data and voice transportation to maintain minimal latency within standards for carrier-grade, toll-quality voice transmission.

The network deploys Clear-Packet Technology, which allows for significant enhancements in availability, application, information integration and speed of access. It also enables the marriage of integrated system networks, business systems, PBX and other communication platforms.

And, this network uses a managed bandwidth network rather than the Internet, which we believe provides QoS second to none.

True Solution Network

Combining the latest iteration of VoIP with a managed data network or intranet opens the door to providing voice service that meets toll-grade QoS standards. Moreover, the data network can be used for conventional data and video.

Although VoIP is becoming a serious alternative to circuit-switched telephony, major circuit-switched carriers like appear to be pursuing slow implementation strategies geared to protecting existing revenue streams and phasing in IP upgrades to their networks. Even data-centric carriers like Williams and Qwest are completing their national networks before they implement end-to-end VoIP.

The PSTN fails to meet future needs of many business and residential users. While major corporations can bypass the public network and force carriers to make price and service concessions, small to medium-sized businesses and consumers have fewer options. The efficiency of the VoIP/managed data network model offers those users a chance to share in the benefits the major corporations usually realize.

Conclusion

For more than 100 years, the telephone and communications marketplace had virtually no competition, but it now is in an era of change and innovation. This new environment has unleashed exciting new products, amazing technological advances and intense competition, which has brought lower prices to businesses and consumers.

We are in the midst of a communications revolution, and companies are seeking the Holy Grail of convergence–a simple, efficient, cost-effective way to send voice, data and video across a single network.

Richard Sorenson is president and CEO of PointOne Telecommunications Inc.
(www.point-one.net). He can be reached at
+1 512 381 8111.

ROUNDTABLE

On the retirement of House Commerce Committee Chairman Thomas J. Bliley Jr., co-author of the Telecom Act …”No one has worked harder the last several years to promote competition and innovation in the fields of telecommunications and Internet services. The Telecommunications Act of 1996–[Mr. Bliley’s] finest achievement–will surely be credited with igniting this revolution in telecommunications and Internet services.”

–Leo
Hindery, CEO of Global Crossing Ltd. and CEO and chairman of subsidiary GlobalCenter Inc.
(www.globalcrossing.com)

“His legacy will live on for many years.”

–Matthew J.
Flanigan, president, Telecommunications Industry Association (www.tiaonline.org)

Rep. Bliley has made “an outstanding contribution to the development of solid, sensible telecommunications policies that have benefited competitive telecommunications service providers, their suppliers, and–most importantly–American consumers. The chairman has always demonstrated remarkable vision and the type of commitment that is vital to guaranteeing that competition continues to be the driving force behind the evolution of the telecommunications industry.”

–H. Russell Frisby Jr., president, Competitive Telecommunications Association
(CompTel, www.comptel.org)

“Congressman Tom Bliley has been a legislator of rare vision, determination and ability. He will leave a legacy of unprecedented economic growth and technological innovation.”

–Bernard J.
Ebbers, president and CEO, MCI WorldCom Inc. (www.wcom.com).