Providers of Public Networks | Environments

Now we will change gears to describe networks of an entirely different kind. Enterprise networks, covered in the preceding sections, are one factor—possibly a critical one—in the success of a business whose primary purpose is something other than networking. For a public carrier network, the network is the business—sales of network services are the primary source of revenue and the reason why everybody from the CEO to the cable splicer goes to work in the morning. The most obvious effect of this different focus is to considerably raise the stakes as far as network reliability and service quality are concerned. While there are arguably a number of other businesses that rely on telecommunications so directly that their reliability requirements may actually be similar, for a public carrier there is no denying the fact that if the network stops, the inflow of revenue stops too. It’s not possible to just spend an hour cleaning out your inbox while the phones are down! Quality is a sensitive matter as well, because along with price, customer relations, and a few other factors, it inevitably constitutes one of the basic dimensions of competition.
Add a Note HereReliability and quality requirements are among the characteristics that make public network providers stand apart, but they are not the only ones. For the largest public carriers, including the former national monopolies and their largest competitors, scale is obviously another consideration. Public networks may have hundreds or thousands of times as many end users as the very largest enterprise networks. Large scale determines the optimum choice of network architecture as well as approaches to operations and network management.
Add a Note HereRegulatory requirements also come into play for public networks. In many places, in spite of deregulation, there may be specific government-imposed metrics of service quality. Government rules may require that carriers implement certain features, and may prohibit certain classes of carriers from implementing other features. The path to deregulation itself, for example as followed in the United States, has created perhaps arcane-seeming rules about which carriers are allowed to handle which types of calls and what charges may or may not apply to them for purposes such as supporting universal service. Government efforts to open the telecommunications business to competition and foster interconnection have resulted in requirements to support specific types of open interfaces.
Add a Note HereStepping beyond technical requirements and looking at the businesses as a whole, one of the defining characteristics of public carriers as opposed to enterprise networks is that the public carriers have to incur extremely large expenditures in order to convince customers to use their services. Costs may include mass television advertising to consumers or support of large sales forces to stay in touch with the needs of business customers. An effect of these large sales and marketing expenditures is that the cost of the network and its technology, while never unimportant, may figure less in the business decisions of a public carrier than you might think. 
Add a Note HereAt one time there was just one public network provider in each country or major geographical region. Much has changed, of course, and in some places there are hundreds or even thousands of public network providers with the right to compete for business. Technology and changing government regulations have also created different types of carriers, which the following sections attempt to categorize. If you are a planner for a public carrier interested in Internet and telecommunications integration, your company should fit in one or more of the following groups loosely if not perfectly. We hope the discussion will help you think about characteristics of a public network provider that should influence your decision about whether and how to integrate Internet and telecommunications technologies.

Add a Note HereInternet Service Provider (ISP)
Add a Note HereWe will begin our survey of public network providers with one of the newest categories: Internet service providers (ISPs). The Internet service provider industry arose in the early 1990s when the U.S. government began a phased withdrawal of its direct support for the Internet and encouraged commercialization. ISP at the moment is a broad and rapidly evolving category, embracing thousands of firms ranging in size from mom-and-pop operations to some of the largest communications businesses in existence. All ISPs, however, offer services related to the Internet. Most ISPs offer points of presence for flat-rate dialup access to the Internet over local telephone lines, but services may also include providing high-speed private line access, hosting and creation of Web content, caching of Web pages, and providing a variety of proprietary information services.
Add a Note HereISPs tend to arrange themselves into a hierarchy depending on their geographic scope. Local ISPs specialize as the primary point of contact for end-user customers, deliver services, and bill customers. Backbone ISPs haul traffic across continents and around the world. In between there are levels of regional and national ISPs. These categories overlap and combine in all possible ways. For example, backbone providers often have large retail businesses and function as local ISPs as well. Consolidation in the ISP industry seems inevitable and appears to be happening, but it is not clear whether the rate of destruction yet exceeds the rate of creation of new firms.
Add a Note HereThe interest of ISPs in Internet and telecommunications integration comes from two different directions. Local ISPs are critically dependent on the local public telephone network to support dial access for their consumer business. So local ISPs need products to optimize the use of the telephone network for remote access, and technology that provides alternatives to circuit-switched access. ISPs may also be direct providers of IP telephony services. In this role, they may need to provide differentiated quality of service (QoS) over the Internet for telephony applications, and the ability to interconnect the voice over IP (VoIP) traffic with the public telephone network.

Add a Note HereLong Distance and International Carrier
Add a Note HereBy law, custom, or choice, some carriers focus on national long-distance or international traffic. This category includes the U.S. long distance industry created by the breakup of the Bell System some 15 years ago (carriers include AT&T, MCI WorldCom, and Sprint) as well as some others such as KDD, the traditional international carrier of Japan. Regulatory liberalization and business mergers continue to blur boundaries, so these carriers now have local telecommunications interests—some of them quite substantial. Nonetheless, to the degree that they remain focused on long distance and/or international telecommunications, they have common characteristics that shape their needs for Internet and telecommunications integration.
Add a Note HereThe economics of voice over IP can be tricky, but, at least in the near term, the economic payoff is more obviously positive for long distance—and particularly international—traffic than for local calls—due mostly to the artificially high level of some international voice tariffs and the consequent opportunities for arbitrage. The relative lack of local infrastructure also gives these carriers an incentive to seek out new ways of establishing relationships with customers. Offering Internet-based services with less direct dependence on local telephone infrastructures is one way to attract customers. Also, the reduced embedded infrastructure per customer allows long-distance telecom companies flexibility to contemplate radical changes in technology (like using ATM or IP-based networks).
Add a Note HereA final characteristic is that the U.S.-based long distance companies have been in a highly competitive environment for a long time now and attempt to differentiate themselves by developing a wide set of IN-supported vertical services on top of the basic telephone call. Many of these services have been implemented in some form of intelligent network technology—often a proprietary flavor that does not correspond exactly to either the international standards or Telcordia requirements for IN. For carriers with a large embedded base of IN, integration of the Internet with IN is a primary challenge.

Add a Note HereNew Carrier
Add a Note HereNew carriers constitute another broad and flexible category. Here the term refers to carriers whose idea of the path to fortune for their investors is to take a clean sheet of paper and design a completely new network using the latest technology. Often these carriers intend to focus, at least as a first order of business, on long distance and international instead of local telecommunications. This focus has the advantage of reducing somewhat the enormous capital expenditures involved in building a network from scratch. Examples of such carriers are the U.S.-based firms Qwest and Level 3. Similar carriers are developing in Europe as competitors to the former national monopoly providers. Since they are open to the use of new technology, and in fact use it as a key differentiating factor, these carriers actively engage in integrating Internet and telecommunications, including use of such technology as large-scale circuit-to-packet voice gateways.

Add a Note HereIncumbent National Carrier
Add a Note HereIncumbent national carriers include most of the very large embedded telecommunications providers of the world. In most of the places where competition is being introduced into the telecommunications service industry (though not the United States—see the following sections), the former national monopoly carrier is more or less intact as an entity, though often privatized in the sense that its shares are traded on the stock market and its finances are no longer part of the national budget. This description includes giants such as Deutsche Telekom, France Telecom, and British Telecom. (It probably includes NTT of Japan as well, although the regulators in that country have made a halfhearted attempt to separate NTT into two regional subsidiaries for local service plus a long distance subsidiary.)
Add a Note HereGenerally, these incumbent national carriers are highly aware of the Internet as both opportunity and threat, and may be interested in integrating Internet and telecommunications for a number of reasons. First, most have either established or acquired ISPs, and so have the same interests as other ISPs (see the preceding ISP discussion) in efficient dial-up access as well as potential direct provision of IP telephony. Second, most are studying options for evolving part or all of their network infrastructure to be based on IP. Any such evolution, of course, would demand implementations that could operate at extreme scale and deliver services with differentiated QoS characteristics. Although not to the degree of the U.S. long distance carriers, these national carriers typically have implemented value-added services using IN, making the interworking of this IN infrastructure with VoIP an important consideration.

Add a Note HereIncumbent Local Exchange Carrier (United States)
Add a Note HereWhile incumbent local exchange carriers are a unique product of the path taken by regulation and deregulation in the United States, this category includes a number of very large companies, namely the regional Bell operating companies (RBOCs) like Bell Atlantic, SBC, BellSouth, and USWest and, in a rather different regulatory position, GTE. All of these companies have their assets heavily concentrated in local telecommunications, and, in the case of the RBOCs, they are currently still legally restricted in their ability to offer long distance, having just barely begun to overcome the legal hurdles defined in the Telecom Act of 1996. Nonetheless, they are all developing plans for eventual long distance services, and it is partly as potential deployers of substantial amounts of new long distance infrastructure that they loom large in the picture of Internet and telecommunications integration.
Add a Note HereOn the more traditional end of their business—local access—local exchange carriers (LECs) are also interested in providing dial-up access to ISPs. Here, the unusual traffic characteristics presented by dial-up (large volumes of long-holding-time calls, where ISPs serve almost exclusively as terminators rather than originators of calls) have caused the LECs to reengineer their networks, purchase and deploy capacity upgrades to their existing circuit-switched infrastructures sooner than anticipated, and actively seek more technologically advanced solutions. IN interworking with VoIP is also a concern of the LECs; the larger LECs have made significant investments in IN infrastructure, even though a smaller percentage of calls access an IN SCP compared to calls in a U.S. long distance provider’s network.

Add a Note HereCompetitive LEC
Add a Note HereCLECs are the new carriers of the LEC market. What makes them different from the new carriers described earlier is a focus on the local (as opposed to long distance and international) market. Because CLECs are deployers of new infrastructure and competitors in search of a technological edge over the incumbent LECs, integrating Internet and telecommunication has great appeal, although competitive LECs should take a hard look at costs relative to more traditional solutions in their environment.

Add a Note HereCellular/Wireless
Add a Note HereProviders of cellular and wireless communications are having their own experience of spectacular growth, which seems to be continuing unabated. A commonly held belief is that a crossover of wired and wireless access will occur early in the twenty-first century. This means that much VoIP traffic will be wireless voice over IP, which makes wireless a big factor in the integration of Internet and telecommunications technologies. In addition, there is strong interest from consumers and service providers in enabling wireless access to the Internet for Web, e-mail, and similar applications, so that IP voice in a wireless environment is likely to be one component of a multimedia mix.

Add a Note HereCable Network
Add a Note HereCable TV networks have long been recognized as a potential alternative means of access for consumers to communications services that go beyond one-way transmission of TV signals. This potential is finally being actualized due to developments such as the upgrading of cable systems with two-way fiber trunks and the deployment of cable modems. Business moves such as the acquisition of TCI by AT&T are also accelerating developments in this sector. Since second-line voice and Internet access are both key components of the service mix being contemplated by the cable companies, interest in integrating the Internet and telecommunications is natural.

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