Telecom sees IP as its savior

CHICAGO'Networks don't care what moves over their cables and wires, and packets don't care how they get from one point to another. That means telephone companies can no longer focus on being phone companies if they want to recover economically, telecom executives said last week at the SuperComm trade show here.

'There is a limit to being a phone company, no matter how large,' said Edward Whitacre, CEO of SBC Communications Inc. of San Antonio.

Whitacre, the opening keynoter, said IP lies at the core of next-generation services, so SBC will concentrate on delivering IP services.

Whitacre was not alone. MCI Inc. also is focusing on the protocol rather than the medium.

'We have to move up-stack in the product and service offerings,' said Vinton Cerf, senior vice president for technology strategy and one of the Internet's founding fathers. 'I'm a big fan of applications that lie above the IP layer.'

Cerf said MCI wants to change from being a network services provider to a network-centric services provider, earning revenue from value-added applications rather than by bringing more traffic to its own networks. The company will be carrier-agnostic as to how the customer reaches those new services, he said.

Cerf believes the federal market will demand such services. He cited the 2001 GovNet proposal for a secure, dedicated government network, which was shelved by the Bush administration.

'The ability to provide resilient functionality on a dedicated network was so expensive that it makes more sense to offer the services over resilient, interconnected public networks,' he said.

Wireless talk

Sprint Corp. also is talking packets rather than voice circuits, but on the wireless side. The company announced plans at SuperComm to invest $1 billion over the next two years to deploy the 1x Evolution Data-Optimized high-speed data service on its PCS network.

EV-DO, based on the Code Division Multiple Access cellular standard, could reach a theoretical peak of 2.4 Mbps over a cellular system, although real-world throughput is in the 300- to 800-Kbps range. Sprint estimated average user upload speeds at 300 Kbps to 500 Kbps, with peak download rates up to 2.4 Mbps.

'We see a large, growing customer demand for the services,' said Oliver Valente, vice president of technology development. For example, he said, users have shared more than 100 million photos since Sprint began offering its PCS Vision service. Games, and streaming and stored video and audio, also are growing.

But 'plain connectivity for laptops is the Day One killer app and will continue to be,' Valente said.

Sprint's decision to roll out the new technology follows a trial introduction of EV-DO in Washington and San Diego last year by New York-based Verizon Communications Inc. Valente would not discuss which markets would get the service first, but he said the federal government would be a major customer.

'The government is a first mover in a lot of the wireless data space,' he said, and the security of CDMA technology would make it a good match for government applications.

Whitacre announced a $6 billion SBC plan to run fiber-optic cable to new residential and business premises over the next six years. The Fiber to the Neighborhood program will deliver 15 Mbps to 20 Mbps to nodes within new developments in SBC's territory. The connections could be used for Internet access, television and other digital services.

'It will set the stage for full competition against cable,' Whitacre said.

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