WANs: Divergent Convergence
May 17, 1999
By David Willis
The past several years have been a period of slow transition for WANs. We now have more choices than ever in telecommunications services but the availability of breakthrough offerings is inconsistent. Meaningful competition has been driven primarily by advances in technology and the popularity of the Internet, not by regulatory efforts such as the Telecommunications Act of 1996. Competitive choice in local access remains a difficult challenge as existing local exchange carriers fight to maintain control over their copper loops.
Despite abundant growth in carrier-network capacity, most customers have achieved only incremental decreases in the cost of their long-haul broadband data services. With most enterprise WANs still built on leased-line and frame relay technologies, fundamental technological change has been slow, due in part to the carriers' need to recoup heavy network buildout costs. It's also attributable to long WAN purchasing cycles on the customer side. Carriers continue to differentiate services based on their added value, and most hesitate to compete purely on price or technology.
As a result, leased-line services and frame relay still dominate the WAN backbone, and carriers emphasize service differentiation, which generally breaks down into managed services, Internet connectivity and, most recently, performance guarantees and QoS (Quality of Service). Service providers have begun to focus on meeting SLAs (service-level agreements), which means offering guarantees for latency, availability and loss. But though a few published SLAs include severe penalties to the carrier for non-performance, most deliver just a minor discount when things go awry.
WAN management products have come a long way in verifying carrier service levels and managing traffic. In our tests of frame relay network management platforms (see "Lifting the Fog With Frame Relay Management Products," www.networkcomputing.com/911/911r1.html), NetScout Systems NetScout Manager Plus and Visual Networks Visual UpTime proved to be excellent strategic and tactical platforms. New hybrid management systems, such as NetReality WiseWan, have begun to merge service-level and bandwidth management (see "WAN Management Meets WAN Control," www.networkcomputing.com/919/919sp1.html).
Wider Pipes in the Wider Area
Carriers have introduced tremendous fiber capacity into their core networks. OC-48 (2.4 Gbps) is common among the larger service providers, with OC-192 (9.6 Gbps) cores being rolled out and some equipment supporting OC-768 (40 Gbps). Dense Wave Division Multiplexing (DWDM) has multiplied the capacity of each fiber by a factor of 40 today, 96 soon, and even more in the future. IP over DWDM is emerging as a way for carriers to build out networks inexpensively, eliminating complex ATM and SONET layers. At the same time, native SONET capacity is expanding. Alcatel has demonstrated native SONET rings running at 40 Gbps without DWDM. A new generation of optical switching, management and cross-connect systems are emerging from companies such as Astarté Fiber Networks, CIENA Corp. and Sycamore Networks, speeding carrier deployment of massive fiber networks.
The thirst for higher speeds is slowly bringing T3 service into the upper end of the enterprise market, with n-by-T1 services bridging the T1-T3 gap for users of both frame relay and ATM. Native ATM services are offered at T1 speeds at prices competitive with frame relay service. These low-speed ATM services present an increasingly viable method of consolidating networks while interconnecting with existing frame relay and leased-line networks. Equipment vendors have responded with simplified ATM access concentrators, providing traffic-prioritization and traffic-shaping capabilities in a device no more complicated than a voice FRAD (frame relay access device). In our tests, Mariposa's ATX 100 stood out as the best of its class (see "Mariposa, 3Com Raise the Bar for Next-Generation ATM Access," www.networkcomputing.com/1006/1006r1.html). It offers compressed voice, circuit-emulation services, and a variety of interfaces for connecting legacy WAN gear, capitalizing on ATM's QoS capabilities to prioritize WAN traffic.
WAN service charges have not dropped sharply, but bargains can be found if you're willing to do your homework and take a risk. A few CLECs (competitive local exchange carriers) offer substantial discounts for customers willing to switch carriers and negotiate their own deals. One customer reports getting T3 services at only three to four times the cost of T1; the industry norm is eight to 10 T1s per T3. A Montana service provider is offering LMDS (Local Multipoint Distribution Service) T1 service at less than half US West's going rate. The difficulty for enterprise customers is in building an end-to-end service package from the patchwork.
Carriers recognize the complexity facing WAN customers and have responded by building alliances, especially for international connectivity. Global One, the Sprint-Deutsche Telekom-France Telecom effort, and AT&T's joint venture with BT and Concert Communications strive to provide one-stop shopping for multinational companies.
Domestically, carriers have undergone a frenzy of mergers and acquisitions. MCI, WorldCom, CompuServe Network Services, ANS, Brooks Fiber, MFS and Uunet have all collapsed into a single company, MCI WorldCom. AT&T picked up the IBM Global Network and Teleport Communications Group and merged with TCI, the world's largest multiple cable-system operator. SBC holds the incumbent LECs Pacific Bell, Nevada Bell, SNET and Southwestern Bell, and is proposing a merger with Ameritech. ILECs Bell Atlantic and Nynex merged, and plan a merger with GTE--potentially creating the nation's largest local exchange carrier.
But despite the combinations among the largest players, thousands of local ISPs and CLECs continue to stay afloat. A new generation of hybrid carriers offer both traditional and IP services, on the public Internet and privately. Enron Communications, IXC Communications, Level 3, Qwest Communications and Williams Network, to name a few, are building out massive fiber backbones, offering a new service mix and undercutting existing rates. Qwest is one of the first to roll out services, getting a jump start by acquiring LCI International with its 2 million customers, and offering frame relay, ATM and IP services at substantial discounts.
Most traditional data networks were based on a circuit-switched core intended to carry voice services, but the approach going forward will be to build voice services atop a data infrastructure. MCI WorldCom notes that its data traffic volume will soon surpass that of its voice networks. Many large private and governmental institutions have released RFPs specifying VoIP (voice over IP) services--usually in the wide area and campus, sometimes all the way to the desktop.
In the local loop, carriers are most actively pursuing consumers willing to pay for broadband access to the Internet. Existing carriers and CLECs are slowly rolling out ADSL (Asymmetric Digital Subscriber Line) services, as cable companies are already providing high-bandwidth services to this market. As the offerings mature, they will become a viable alternative for small and midsize businesses.
Integrated access will be the next carrier mantra, led by Sprint's ION and AT&T's INC initiatives. These services support voice, data and video over a single access pipe--with both ION and INC using ATM. Integrated services are possible with other technologies, but ATM is the preferred method of assuring QoS of many carriers and customers alike.
Narrowband voice-service prices have taken a dive, with a few companies reporting traditional circuit-switched long-distance rates of less than 5 cents per minute. International rates have been driven down even more dramatically by voice ISPs, which move voice traffic at low cost over packet-based networks.
A notable shift has taken place in wireless voice services. Many cellular and PCS vendors have ended roaming and long-distance charges in their high-end packages. Iridium launched its low-earth-orbit (LEO) satellite service in 1998, offering handheld satellite communications from almost anywhere--at steep rates.
Mobile workers will have more options than ever for applications, text messaging and Web-based information access. Timex-Motorola's Beepwear watch includes a pager. PDAs are merging with cell phones in devices such as QUALCOMM's PDQ smartphone. 3Com/Palm Computing's Palm VII will bring better Web access to a PDA, while Motorola, Nokia and Samsung handhelds offer browser-like access to Web servers.
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