July 26, 1999
Analysis
Incumbent Local Exchange Carriers
The locals' ATM services are limited for regulatory reasons, so they're courting partnerships with IXCs. So far, U S West has the most strategic approach to the enterprise. By David Willis
With the exception of U S West, most ILECs are not building out ATM to the enterprise in a strategic fashion. Regulatory constraints generally limit services to intra-LATA coverage. This has fostered partnerships with long-haul carriers offering ATM, as in Bell Atlantic's agreement with IXC. Bell South and U S West have agreements with Qwest for inter-LATA service. Except for GTE, the ILECs are providing ADSL access to their ATM networks, well ahead of most of the IXCs. And the pricing is generally better than that of T1-based ATM, to appeal to the price-sensitive branch office customer that's generally the ILECs' target.
Ameritech
Ameritech sees ATM as a natural evolution for its frame relay customers, although it's not making a concerted effort to bring them to ATM. Its pricing for ATM is somewhat higher than that for frame relay, though it plans parity within the next year or so. Seventy percent of Ameritech's ATM ports are sold at the T1 level. Ameritech anticipates strong demand for IMA during its upcoming rollout. While the carrier does not now offer SVCs, it knows voice and video integration are driving demand.
Ameritech doesn't offer a customer network management platform. Negotiable service-level criteria are limited to available and Mean Time To Repair. With the expected merger of Ameritech and SBC, ATM networks in Pacific Bell and Southwestern Bell territories may be united. But SBC's ATM platform is not the same as Ameritech's, so true integration may take a while.
Bell Atlantic
Like Ameritech, most of Bell Atlantic's ATM customers use T1s for access, although the company expects the focus to shift to IMA services within the next year. CBR, VBR-rt, and VBR-nrt are available, with UBR service scheduled for the fall. Service levels and CNM platforms are in development.
BellSouth
BellSouth ATM pricing is on average 15-30 percent higher that of frame relay. When ABR service is unveiled this summer, the carrier will be offering all ATM service classes. During the next year, BellSouth is expected to begin offering SVCs, IMA, managed router services and monthly utilization reports. By the end of 2000, real-time alarms and detailed SLA criteria are expected to be available.
GTE
GTE is farther along than most ILECs with ATM. GTE now offers managed CPE services for both voice and video over ATM, and more customer network management options. It expects that its pricing for frame relay and ATM will soon be comparable. However, GTE's scattershot footprint represents a special challenge for the carrier's customers--the territory features many small cities, but the carrier attempts to address major markets first.
Unlike those of most ILECs, GTE's frame relay and ATM networks do not share a core; given that GTE's ADSL service is built out on its frame relay backbone, direct ADSL access to ATM is not available. SONET access to ATM is not provided in the standard offering, but is available on request.
Pacific Bell
PacBell's ATM service has been around longer than most. ATM runs at a 15 percent to 20 percent savings compared to frame relay, with CBR, VBR-nrt, and UBR service classes available. Access rates start at 128 Kbps and run to OC-3, with 20-Mbps fractional T3 available. ADSL access to ATM is available for an affordable monthly charge of $129 (384K up/1.5 MB down) or $350 (1.5 MB/6 MB). With IMA service rolling out this month, PacBell has the most complete range of access offerings. But it lags in customer network management and service-level criteria.
Southwestern Bell
Southwestern Bell's ATM service looks a lot like that of its Pacific Bell brethren. Access offerings run the gamut from sub-T1 to OC-3, with fractional T3, IMA and ADSL available. ATM costs run approximately 25 percent higher than frame relay.
U S West
U S West is pushing ATM harder than any other ILEC. Across its 14-state territory, the carrier has deployed 150 Cisco/Stratacom ATM switches--as many as MCI WorldCom has through its entire network--to support native ATM, RADSL and Transparent LAN Services. Native ATM service is on average only 10 percent higher in cost than frame relay. With CBR, VBR-rt and UBR service available, customers can mix circuit emulation, compressed real-time traffic and LAN service today. By 2000, a full complement of customer network management options is expected. With a strong commitment to backing service levels for latency and cell loss, and a midyear managed service rollout that encompasses voice and video, U S West shapes up as a serious contender for customers in its territory.
In the final analysis, we expect ATM service prices to keep falling, even as demand increases. With Qwest, AT&T, MCI WorldCom, Sprint and U S West leading the charge toward affordable, available ATM service for a wide range of customers, the rest of the market will be forced to keep pace.
Send your comments on the story to David Willis at dwillis@nwc.com.
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