Communications Crossroads - Spring 2008 - (Page 13)

This transition has been pushed upon companies by the demands of their customers for the new services that the Internet offers. All carriers, including small and rural companies, must upgrade their networks to keep pace in today’s competitive marketplace, where customers have wider choices than ever before for how they get not only telephone services, but Internet and other advanced services as well. Tom Soroka, vice president of engineering and technology for USTelecom, says companies have no choice in the matter. “The whole competitive landscape of society has changed and telephones are no longer the primary means of communication. Customer demand for services like high-speed Internet access, converged email and video-based services can’t be supported on traditional phone networks.” But smaller and rural companies can find themselves at a competitive disadvantage. The newer equipment necessary to offer IP services to customers represents a heavy capital investment for many firms, which often have limited resources. How can they upgrade in a financially viable way and provide uninterrupted and competitive services to customers? Transitioning to IP is a challenge of cost, equipment and staffing. In the past, small and rural communications companies bought switching equipment from companies like Lucent and Nortel. Much of that equipment is still in place, but to offer IP services, companies must transition to new networks. One question the smaller and rural telcos face is what to do with their current switching systems. “Many decide to wait for the depreciation cycle to complete before they rip out the old equipment, because at some point it becomes more expensive to maintain and run the systems than to replace them,” says Soroka. There’s also a staffing issue: because so many were trained on the old switching systems for years, carriers must either retrain their staff or hire new people to build, operate and troubleshoot the new IP-based equipment. But there’s also good news when it comes to transitioning to IP. The old switching equipment took up a lot of space, power and air conditioning. IP equipment is much smaller and faster, and it’s easier to add new features to Internet-based voice networks than to the old systems—often just a few weeks, compared to a year for some large vendors. IP offers savings not only on space, but on power and cooling costs—smaller equipment means much less power and cooling. Carriers Are Cautious Still, telecoms are cautious about the transition. “They want to see others use the new technology first and work the bugs out. Also, many smaller and rural carriers may have a tough time deciding whether to consolidate with other telcos in order to transition or to invest money in the next generation network equipment,” Soroka says. One way to for smaller companies to transition is for several in a region to form cooperatives, pooling their resources to build fiber and video infrastructures to share and to get better pricing on content and traffic. This practice offers an economy of scale, which translates into more buying power and clout. “For those getting into video, banding together into coops can make smaller carriers appear as larger ‘buyers’ to the content providers,” Soroka says. An industry irony is that many smaller telecoms have been much more aggressive in offering new services than larger ones, and many rural areas have had DSL for years. “Smaller companies can be more nimble because they have fewer subscribers to build out for. There are many examples of smaller providers that are way ahead of the technology roll-out curve, but that depends on each company’s funds and desire. There’s a smattering of smaller companies in every situation. For instance, Shenandoah Telecom in Virginia has a broad range of offerings with a penetration rate approaching 100 percent. They are aggressive and fully committed to serve their customers with the highest degree of service and capabilities.” Mitchell Auster, senior director, product marketing, Ciena, says that although data migrated to IP long ago, applications like video and voice are the focus now. “IP isn’t a transport protocol, so the question is ‘what is the best transport protocol and architecture for IP traffic?’” he says. The challenge is going from PDH/SONET/ SDH to Ethernet transport to deliver a variety of services including T1 private lines, traditional voice services, frame relay, Internet access, Ethernet and video. Telecom companies are seeking the best ways to migrate customers, to maintain the quality and reliability of service in a cost-effective approach. The migration needs to be done gracefully, he said, enabling customers to transition from frame relay, for example, to Ethernet service seamlessly. One method is using service interworking to enable the migration to Ethernet of one or two endpoints at a time instead of all at once, he says. That makes transitioning less intrusive both financially and technologically for both carriers and their customers. Many companies utilizing SONET technology have implemented Ethernet over SONET as a first step, but Auster says SONET doesn’t provide the ultimate solution with regard to scalability or cost-per-bit for packet services. To accommodate the massive volume of IP traffic, carriers will need to adopt DWDM equipment and Ethernet switching to provide scalable, economical transport of IP services and to offer Ethernet service directly to their enterprise customers. But could the cost of adopting new equipment price some out of business? “It could, but there are multiple ways to build networks, Spring 2008 COMMUNICATIONS CROSSROADS 13

Table of Contents Feed for the Digital Edition of Communications Crossroads - Spring 2008

Communications Crossroads - Spring 2008 Up Front Contents TeleBites Cover Story: IPTV Technology Today: Network Transitioning: It’s Not a Matter of If, but How Business Advantages: Turning Knowledge and Growth into Profit and Success Industry Calendar Advertisers DotCom Index to Advertisers Straight Talk

Communications Crossroads - Spring 2008

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