Four steps to more effective network services - Page 3

By Paul Strauss | Posted Sep 1, 1999
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Sorting it out

It's usually easy to compare the cost of individual links--a T1 leased line from Atlanta to Chicago versus a frame relay service with a T1-speed Committed Information Rate between the same two cities, for example. And it's easy to compare a simple multipoint leased-line network with the same connections made through frame relay. Frame relay configurations generally cost between 20% and 35% less than comparable leased-line networks.

ATM wide area networks, which usually start at speeds of 45Mbps at the slowest, often cut the monthly cost of leased-line configurations in half. More importantly, they allow multipoint configurations that were never possible with leased lines.

It's also relatively easy to decide between frame relay and ATM. At speeds of less than T1, you must take frame relay (ATM is not offered). At speeds over T1, you usually must take ATM (frame relay is rarely offered). At T1 speed, you can choose between the two.

(There is often a misleading discussion of the so-called "cell tax," meaning the amount of overhead on ATM networks. This amount can run as high as 20% due to the high proportion of cell headers and inter-cell spacing bits to payload. But the 20% overhead only affects a network choice when there is a direct comparison. If a frame relay and ATM PVC both have a T1 Committed Information Rate and both cost $1,000 a month, then the frame relay network will deliver higher throughput because of its lower overhead. In general, however, ATM's high overhead doesn't cost users more than an asynchronous packet service because the fact that it's synchronous helps to reduce the cost of switches. Many frame relay switches are actually ATM switches.)

While it's sometimes easy to choose between frame relay and ATM, in general it's by no means easy to price out comparable networks, largely because of the deregulation of telecommunications. ATM and frame relay are no longer sold as tariffed services, which means that their prices are not listed. Indeed, it's hard to say that there are fixed prices for these services from many carriers. Most carriers set a price by negotiation, which means that large networks are cheaper than small ones, and long-term contracts are cheaper, per month, than short-term contracts.

Moreover, there are signs that some carriers will offer more attractive prices on a data service if the deal also includes the customer's voice services. If deals are made on this basis, it's meaningless to attempt to compute the price difference of ATM over leased lines.

Recent figures show rapid declines in the use of leased long-haul circuits and rapid increases in the use of frame relay and ATM. All three services are usually offered by major long-distance carriers in all metropolitan areas. With the rise in Internet popularity, T1 and fractional T1 circuits are often being used as access circuits, and these facilities also are available in virtually all metropolitan areas. Lagging are local frame relay and ATM access services, which in some cases are marginally less expensive than leased access services.

Other network services

While much of the attention in wide area networking has focused on such services as frame relay and ATM, there are alternatives that can be highly cost-effective for small branch offices. Two technologies to consider are very small aperture terminal (VSAT) services, communications satellite broadcasts received by relatively small dish antennas (usually about four feet across), and ISDN, a dialed digital service that was intended to replace today's analog telephone system. VSATs can be highly cost-effective when there are scores or more branch offices that tend to receive most of their information from headquarters. They are not terribly effective in two-way mode.

The basic-rate ISDN service was originally designed to give all users two 64Kbps digital circuit-switched channels and a 16Kbps packet-switched channel, and to be used either as a telephone service or for data transmission. Unfortunately, because of variations between services, ISDN rarely offers all of these capabilities and virtually never can be used to replace a telephone line. ISDN installations are notoriously difficult, and there are enormous variations in pricing for these services, from a fixed rate of $17.90 a month in Arkansas to $249 a month plus per-minute charges in most Bell Atlantic areas. Still, this is a lot less than the cost of leased lines, which may cost $300 a month for 56Kbps of bandwidth or $500 for a 128Kbps circuit.

While ISDN is by definition a switched service, some ISDN circuits are being sold as point-to-point connections, or the equivalent of a leased line. These can be attractive for access to the Internet, but they're not available in all areas.

New high-speed access services

With ISDN a disappointing option, most organizations are forced to access the Internet or their private data networks using leased lines. In some cases, access is possible using frame relay services.

Since T1 leased lines cost around $1,000 a month plus $1,000 for installation, there are hopes for new services that will be considerably cheaper. The two technologies that are most discussed for doing this are Digital Subscriber (fixed) Lines, which is usually called the xDSL technology these days because of the many speed options, and data over cable TV services, called cable-modem services. Unfortunately, both of these services have been rolled out very slowly, and it's unlikely that either of them will be a major competitor to leased lines for many years.

However, for workers in home offices, both services could be relatively inexpensive. Bell Atlantic has just announced its planned xDSL services, which will be "asymmetrical," meaning that they will have relatively low speeds of sending data but will allow downloads at up to 7.1Mbps. For this service, Bell Atlantic is charging $189.99 a month (which is a lot of money for the average home user, but cheap in comparison to the cost of a leased line). Cable modems offering a download speed of 1.5Mbps are offered for around $40 a month.

On the high end, the latest trend is for carriers to lease OC-3 (155Mbps) and OC-12 (622Mbps) fiber-optic access and long-haul circuits. Prices are rarely listed, but they are likely to be in the tens of thousands of dollars a month. Like T1 circuits, these are simply very high bandwidth point-to-point leased lines. However, they can be used for both voice and data, and for many large companies, they cost less than taking multiple 45Mbps circuits.

Virtual private networks

Because corporations already have Internet access for their Web servers and increasingly use the Internet for electronic mail, there is growing interest in using the Internet for data transport as well. This has many theoretical advantages, the main one being that the Internet, unlike ATM and frame relay networks, is essentially one big network made up of thousands of carriers' backbones. This being the case, you don't have to worry about whether the carrier offers service in Pomona, Punta del Este, or Penang--any global point can be reached.

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