Business News – Lucent Softswitch Wins Level 3’s Vote, Envy of Like-Minded Peers

Posted: 08/1999

Lucent Softswitch Wins Level 3’s Vote, Envy of
Like-Minded Peers
By Ken Branson

Lucent Technologies Inc., Murray Hill, N.J., has scored a coup with its $250 million
licensing agreement for its Softswitch software system with Level 3 Communications Inc.,
Broomfield, Colo., but Ma Bell’s most prosperous offspring is hardly alone in its drive to
bridge the gap between yesterday’s circuit-switched networks and emerging data networks.

Softswitch is a software system, running on commercially available servers, that helps
Internet protocol (IP) networks, such as Level 3’s, interface with circuit-switched
networks, such as the public switched telephone network (PSTN). Level 3 and Lucent also
will cooperate on enhancements to the Softswitch.

"Probably the most significant thing about this announcement is that a service
provider is paying for software and is very specific about paying for software," says
Hilary Mine, executive vice president at Probe Research, Cedar Knolls, N.J. " …
Level 3 has done a service to the industry by saying, ‘Yes, there is value to
software.’"

James Crowe, Level 3’s president and CEO, says that carriers have had to choose until
now between the ubiquity and reliability of circuit-switched networks, and the price
competitiveness and service flexibility of IP networks. Softswitch makes that choice
unnecessary, he says, because it combines them seamlessly and–to the end
customer–transparently. End customers, he says, will use Softswitch the same way they use
traditional telecom networks: by picking up the phone and dialing. No special codes, no
special customer premises equipment, no nothing. Softswitch will send the call on an IP
network, but will automatically transfer traffic to the PSTN if the performance of the IP
network falls below PSTN standards.

Lucent Chairman and CEO Richard McGinn says Softswitch is under trial at several other
carriers, none of which he will name.