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The prospect of voice over digital subscriber line (VoDSL) enabled by a new breed of specialized switching systems is music to the ears to competitive and incumbent local exchange carriers that have been scratching their heads over the mis-match between the cost of DSL deployment and the relatively limited revenue opportunity for basic high-speed Internet access. Proponents say this technology will be ideal for small businesses, a rich but thus far unreachable market segment for many service providers.
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Channelized gear may make deployment worthwhile for previously uninterested small business customers
Usually, cheap talk is something to be frowned upon. But the prospect of voice over digital subscriber line (VoDSL) enabled by a new breed of specialized switching systems is music to the ears of competitive and incumbent local exchange carriers (CLECs and ILECs) that have been scratching their heads over the mismatch between the cost of DSL deployment and the relatively limited revenue opportunity of basic high-speed Internet access.
Proponents say this technology will be ideal for small businesses, a rich but thus far unreachable market segment for many service providers. "Voice over DSL opens up more than a million businesses to us," says Gary Williams, vice president of strategic marketing for integrated communications provider GST Telecommunications Inc. (Vancouver, Wash.), which operates primarily in the West. It wasn't cost-effective, Williams says, for CLECs such as GST to deliver a T1 (1.544 Mbit/s) to businesses for just three or four lines, forcing them to completely surrender the market for small-business voice revenue. Analysts estimate that market to be anywhere from $35 billion to $50 billion in the United States alone.
DSL's economic prospects have been improved profoundly this year by the introduction of technology that enables providers to offer a channelized mix of voice, data and even video service over a single copper line. The gear usually includes a central office (CO) gateway system linking the data network to the public switched telephone network (PSTN). It sits in front of the DSL access multiplexer (DSLAM) and customer premises equipment (CPE) and supports multiple 64-kbit/s voice lines and a highspeed public network connection. The equipment usually supports both asymmetric DSL (ADSL) and symmetric DSL (SDSL) systems.
What has changed since the early days of DSL deployment is the emergence of systems, primarily from startups, that split the available data bandwidth into discrete channels that providers can use and manage to deliver services. These configurations are agile: If the percentage of voice circuits rises in comparison to data, for instance, the adjustment can be made on the fly. The effect of the technology, which uses either Internet protocol (IP) packets or asynchronous transfer mode (ATM) cells, is simply more bang for the buck.
It is a marriage of convenience between known and understood technologies. The issues of running voice as a data application in the local environment appear to be licked, which has facilitated a rapid ramp-up of services from providers. "The vendors are simply putting two pieces together: Voice over frame or ATM is real, and DSL is real," says John Freeman, principal analyst with Current Analysis Inc. (Sterling, Va.). "We're just talking about hefting the [voice communications] over to the central office, then back to a Class 5 switch. It's circuit transmission there-we're not talking about end-to-- end voice over IP."
The vendor community is convinced that issues such as spectral compatibility and crosstalk won't come into play. "There are no problems beyond those that exist for DSL itself," says Cynthia Ringo, chief executive officer of CopperCom (Santa Clara, Calif.), a vendor of VoDSL gear. Some well-known challenges to packetized voice-such as inconsistency in the arrival of packets aren't a big problem because the CO-to-- CPE distances are short.
Indeed, providers preparing to deliver VoDSL seem comfortable with the state of the new gateway and switching technology. "We would not even enter this game if this wasn't equal to or better than toll quality," says GST's Williams, while acknowledging that the equipment market is young. GST is partnering with Covad to deliver its VoDSL service to small and midsize businesses, and expects to have it ready by the fourth quarter of this year.
"We're very confident about quality," says Dennis Allen, executive vice president of Internet service provider (ISP) Network Telephone (Pensacola, Fla.), which is planning to begin a VoDSL service this month. "There won't be any degradation whatsoever."
The technology for supporting VoDSL services to small and midsize businesses, as well as upscale residences with a need for multiple voice and data lines, is being installed by facilities-- based DSL network service providers such as Covad Communications Co. (Santa Clara, Calif.), NorthPoint Communications Inc. (San Francisco) and Rhythms NetConnections Inc. (Englewood, Colo.). In general, services will roll out by the end of the year.
The companies offering the required switching and gateway technology in addition to CopperCom include Lucent Technologies Inc., Jetstream Communications Inc. (Los Gatos, Calif.) and Toll-- Bridge Technologies (Sunnyvale, Calif.). They are either partnering with DSLAM vendors or designing their systems to be DSLAM-- agnostic. In both cases, the objective is to create a packetized voice delivery environment that is as reliable and effective as current phone systems.
Rather than getting anywhere from $30 to $200 per month for DSL Internet access, service providers can generate revenue for additional voice lines activated on the same loop. Even at only $20 per month for each of the lines, a bargain rate for business customers, "the math starts to look stunning," says Ringo. "For CLECs and those acting like CLECs, it's about how much they can put down the [DSL] line."
Indeed, such integrated services may be the next big thing in DSL. "The small to midsize business market is wide open to us," says Network Telephone's Allen.
Copyright CMP Media Inc. Sep 20, 1999