DSL gets ready to speak

DSL is fast and popular. DSL with the addition of voice data can only be better and more popular--and it's coming soon to a carrier near you.

By Paul Korzeniowski | Posted Aug 17, 2000
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Voice and data digital subscriber line (DSL) services may soon become an all-American twosome like burgers and fries, or apple pie and ice cream. Because it delivers an always-on high-bandwidth connection, DSL is becoming a common way for businesses and telecommuters to access the Internet--the number of subscribers is expected to grow from 500,000 at the end of 1999 to 10 million in 2003, according to TeleChoice Inc., a Tulsa, Okla., market research firm.

To date, DSL has been limited to data-only connections; however, voice over DSL (VoDSL) services have the power to integrate up to 24 voice, fax, and Internet channels on one copper wire connection, which should appeal to businesses. By deploying new services on DSL lines, carriers can turn their bottom lines from red to black. In this article, I'll tell you more about how VoDSL works and its benefits for business.

Benefits of DSL

"Small and medium businesses that use half a dozen or more phone lines but couldn't afford T1 services ... can justify installation of a VoDSL line for their communications needs. "

Data access has made DSL a success. With employees spending more time surfing the Web, DSL connections are usurping dial-up modems' standing as the most popular Internet access option.

As businesses become familiar with DSL services, they want to use the high-speed connection for more than simply Web surfing; they want it to support all of their communication requirements, explained Stefan Knight, director of product marketing at CopperCom Inc., a Santa Clara, Calif. DSL equipment supplier.

DSL can do this--and do it inexpensively for businesses as well as carriers. Businesses also see cost benefits: bundling multiple voice and data services on one DSL line can reduce communications costs by 20% to 40 %. VoDSL services that include 8 to 12 voice lines and an Internet connection come at a cost of about $200 to $400 per month. Small and medium businesses that use half a dozen or more phone lines but couldn't afford T1 services, which run from $500 to $1,000 per month, can justify installation of a VoDSL line for their communications needs.

These services also simplify administrative chores, such as network management. Currently, companies have multiple devices and variety of services to support their voice and data needs, notes Pat Hurley, a DSL analyst at TeleChoice. They prefer to work with one set of devices and receive one bill from their carriers.

VoDSL also appeals to the growing number of executives working at home. There are approximately 19 million employees (salespersons, district managers) who work from home part of the time. Many of these employees now have multiple residential lines, which can be replaced by higher-speed, multiservice DSL connections.

Carrier considerations

Carriers can benefit from VoDSL acceptance. While there has been a growing need for integrated, high-speed telecommunications services, carriers have faced a tremendous challenge delivering them. Their existing network infrastructures were not designed to support such services: they rely mainly on expensive central office switches built to deliver dial tone. Copper lines, the least expensive media, carry calls from business to the switches, which can be miles away.

This infrastructure requires a tremendous amount of ongoing maintenance: Carriers spend $20 billion dollars annually maintaining their local loops. Because of the high maintenance costs, carriers jammed as many connections as possible into their switches and adding capacity has been a complex, expensive undertaking. Pricing for providing a business with a second telephone line starts with an investment of $500 to $700 in central office equipment and another $800 to $1,000 for running copper wiring to the customer site, which brings the total to $1,300 to $1,700 per line.

Historically, carriers were able to justify such investments because competition was prohibited and they were assured of an ongoing revenue stream. That has been changing since the Telecommunications Act of 1996 began opening up the local loop. More than 500 companies have filed for competitive local exchange carrier (CLEC) status, so carriers can no longer count on the lengthy timetables to recoup their investments--in fact, they could lose a customer soon after a new line is installed.

While carriers' customer bases and revenue have been rising, that has not been the case with their profits. Massive infrastructure investments have been eroding profit margins. VoDSL offers carriers compelling economics. A single twisted-pair copper telephone line delivering analog voice calls generates about $70 per month in revenue, including both local and long-distance service. By using that wire to support multiple services (Internet access, multiple voice lines, unified messaging), carriers can boost the number to a few hundred dollars per month.

And the new multimedia services can serve as a differentiator and help carriers grow their customer bases. The extra services can also help to reduce churn: Customers with multiple services are less likely to switch carriers than those with a single service.

Challenges of VoDSL

CrossLinks

VoDSL services offer many potential benefits, but there are also a handful of challenges in delivering them. The key difficulties center on transporting voice communications on data lines. It is relatively easy for carriers to translate an analog voice signal into a digital format, and then send it across a data network like any other piece of information. But to deliver high call quality, carriers need to insure that sufficient bandwidth exists to deliver voice packets in a timely manner.

This is difficult on IP networks because packets are scrambled as they travel across a network in a haphazard manner. Carriers are addressing the problem by layering their DSL services on top of Asynchronous Transfer Mode (ATM) networks that include Quality of Service (QoS) features to insure a clear point-to-point path.

Another issue is how much bandwidth is available for voice calls. To date, most carriers have relied on Asymmetric DSL (ADSL) equipment to deliver their services. ADSL offered carriers the quickest and easiest way to get new services out to market, so about 90% of the existing systems support it, notes Tim Templeton, a marketing manager at PairGain Technologies Inc., a Tustin, Calif., DSL equipment provider. Incumbent Local Exchange companies, who have been targeting the consumer DSL market, have used this technique.

ADSL can deliver a high volume of bandwidth (as much as 8Mbps) but not on both sides of a connection. While data can move from a central office switch to a user at 8Mbps, the customer's connection is limited to about 400Kbps; as a result, it becomes difficult to balance multiple services running on one line.

Synchronous DSL (SDSL) delivers less maximum bandwidth (about 1.5Mbps), but it has equal amounts flowing in both directions. CLECs have been the primary SDSL supporters and targeting their services at small and medium businesses.

Another challenge is layering traditional voice services, such as call waiting and voice mail, on new IP networks. A handful of protocols have emerged that enable carriers to map PSTN services to IP networks, explains Enzo Signore, director of marketing at Cisco Systems Inc., of San Jose, Calif., Carriers have begun testing them to determine which best meets their network and service requirements.

To deliver DSL services, carriers must install Integrated Access Devices (IADs) at customer sites; the devices consolidate multiple information feeds onto a single line. To date, such devices have been designed to carry data traffic only. New multiservice IADs are making their way to the market but they come with high price tags: about $1,000. In some cases, carriers have been subsidizing these purchases with the hope of making it up in future service revenue.

In addition to being high priced, IADs lack standard interfaces, so interoperability between these devices and equipment at the customer site and central office may be limited. Vendors have been testing their products to insure different devices can exchange information, but it's a time-consuming, case-by-case basis.

Making market inroads

Despite those issues, VoDSL is moving toward the mainstream. Several regional providers have begun offering commercial services in limited areas. Picus Communications Inc., of Hampton Roads, Va., offers services in two markets (Hampton Roads and Richmond, Va.), and plans to expand along the East Coast from Boston to Miami. At the end of 1999, Mpower Communications Corp., of Pittsford, N.Y., began expanding its commercial service area from Las Vegas to 13 markets in California, Florida, Georgia, Illinois, and Nevada. Network Plus Corp., of Quincy, Mass., Gateway Telephone North Bay, of Canada, and Focal Communications Corp., of Chicago, Ill., are other regional carriers starting to roll out VoDSL services.

In addition, nationwide CLECs Covad Communications Co., of Santa Clara, Calif., NorthPoint Communications Inc., of San Francisco, Calif., and Rhythms NetConnections Inc., of Englewood, Colo., have begun trials with deployment plans for this year. Among the incumbent carriers, SBC Communications Inc., of San Antonio, Texas, has targeted high-end residential customers for its services.

There seems to be a market for these services. In a TeleChoice survey, small (42 %), midsize (38 %), and large businesses (48 %) expressed a high degree of interest in the technology. Consequently, the market research firm expects the number of domestic VoDSL lines to increase from 40,000 this year to 1.75 million by 2004.

Vendors are also optimistic. Because of the advantages VoDSL offers, we expect that half of all the systems we will be shipping at the end of next year will include those features, states PairGain's Templeton. Then, whenever DSL is mentioned, users will think of voice as well as data connectivity. //

Paul Korzeniowski is a freelance writer in Sudbury, Mass., and specializes in networking issues. His electronic mail address is paulkorzen@aol.com.

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