FTS faces telecom's future

FTS faces telecom's future

Agency knows it must serve up new hot services to compete


Sandra Bates, commissioner of the Federal Technology Service, read recently about plans for a disposable wireless phone.

The preprogrammed phone would sell for about $20 and come with 60 minutes of airtime. It would have limited battery life and no display and would handle only outgoing calls'just right for a whitewater rafting trip, or to keep in the glove compartment.

Are disposable phones going to be competition for Bates as a government telecommunications reseller?

Probably not. But they illustrate the challenges facing the General Services Administration's FTS as standalone products and services, once the exclusive province of a handful of carriers, become commodities to mix and match.

align="right" width="150">

size="2" color="#FF0000">New wireless data services are on the federal horizon, FTS' Sandra Bates says.

For example, when FTS awarded the Federal Wireless Telecommunications Services contract in 1996, cellular service was expensive, and there was no national service network.

Contractor GTE Corp. had to patch together more than 100 subcontractors for 700 local markets. Data services were rudimentary. Acquiring, managing and billing cellular services was centrally managed.

'All of a sudden, the paradigm shifted,' Bates said.

Today nationwide cellular services with Web access and e-mail are available on GSA schedule contracts. Sprint Corp. hopes to add Sprint PCS wireless service to its FTS 2001 contract soon.

'What has to change is our business process,' Bates said. 'It seems like outsourcing more and more is what we will be looking at.'

Business process re-engineering is not a term used much these days, 'but that's what we're doing,' said Frank Lalley, assistant FTS commissioner for service delivery. Buying services rather than products lets agencies upgrade without capital investment. It also lets them avoid committing to specific technologies.

'Two or three years ago, everyone was saying ATM, and a lot of people are still using' asynchronous transfer mode networks, Bates said. 'But there are a lot of other options today. And where are you going to get the money for an ATM upgrade?'

One answer is to let the service provider worry about the upgrade, while the agency pays a fixed fee. 'Price predictability, that is key' as much as the price level is, she said.

John Johnson, FTS assistant commissioner for service development, said FTS worked on hardware in the 1980s and on contracts in the 1990s. What he calls the next-generation FTS will concentrate on telecom solutions.

'Our customers are focusing on core missions' and do not want to hassle with the care and feeding of technology, he said.

New services and solutions mostly will be offered through existing contracts. 'We're not going to be having a lot of new procurements in the coming months and years,' Bates said.

size="2" olor="#FF0000">Frank Lalley

On the inside track to offer these new services are the existing FTS 2001 long-haul contractors: Sprint and WorldCom Inc. Both are adding managed services, such as security and Web hosting, to their contract offerings.

'We think FTS 2001 is a tremendous vehicle for making the migration' from products to solutions, said Anthony D'Agata, vice president and general manager of Sprint's government systems division.

New vendors will continue to enter the government market as subcontractors on existing contracts or through their own GSA schedule contracts.

One of the most interesting innovations under FTS 2001 however, is one that could become available to agencies this year and won't involve any new technology. FTS wants to package local and long-distance services at a single flat rate.

Sprint Corp.
Approved offerings

  • Internet virtual private networks

  • Managed remote authentication dial-in service

  • Derived Access Adaptation Function enhancement to managed network services

Pending offerings

  • FONCard enhancements to block Caller ID and add braille and private-label cards

WorldCom Inc.
Approved offerings

  • Customer premises equipment service enhancement

  • ATM unspecified bit rate, wideband frame service

Pending offerings

  • Prepaid phone cards

  • Custom managed network services

  • Permanent virtual circuit point-to-point connections

  • Audioconferencing

  • Frame-relay switched virtual circuit and permanent virtual circuit redirect

Separate local and long-distance providers still would bill the services to the government, but FTS would combine the charges and send each agency a single, flat-rate bill.

'We have the service, we have the providers, we just need to put the package together,' Lalley said. 'Our goal is to offer something this year in selected areas.'

Overall telecom costs might not drop under such a pricing scheme, but a single flat rate could help smooth one of the thorniest areas in government telecom services: billing.

Continual challenge

'Billing continues to be something we've not been able to solve,' Bates said. Myriad billing requirements for different agencies have created headaches for vendors and users alike, mostly in tracking long-distance use.

'We're still maintaining our telecom structure as if it were the expensive service it was 10 years ago,' Bates said.

Long-distance service no longer is expensive. The current lowest on-net rates under FTS 2001 run 3.02 cents per minute. A flat rate could eliminate tracking use and do away with cumbersome infrastructures for allocating charges. The trouble is, agencies have budgeting systems for managing long distance centrally and local service locally, and that could dampen the early demand for flat-rate packages.

Before focusing on new services, the challenge for FTS 2001 contractors is to finish moving agencies to the new contracts. Old contracts have been extended, and the new deadline for completing the transition is June 6. By mid-February, 88 percent of the circuits had been switched. About 110 out of 145 agency customers are finished.

Most of the remaining circuits are in remote locations or have special needs. And the transition may never be completely finished. For example, about 5 percent of Commerce Department circuits have not yet made the transition, said Jorome T. Gibbon, telecom manager under the department's chief information officer.

'Some of that will never change because there aren't any comparable services in the new contracts,' he said.

X.25 packet-switched service, used primarily for remote locations and low-speed applications, is the prime example, Gibbon said. In areas such as the Florida Keys, where AT&T Corp. owns the infrastructure, service has remained with that carrier, he said.

Although the FTS 2001 vendors offer more services than the contracts of their predecessors, 'for the most part, agencies did a like-for-like transition,' said Jerry Edgerton, WorldCom senior vice president of government markets.

Once past the transition hurdle, he said, agencies will begin requesting new services such as Web hosting, managed security and virtual private networks.

Hosting a Web site capable of delivering dynamic information can be capital- and labor-intensive. 'We think it's natural to add this to our capabilities,' Edgerton said.

Sprint is building a Web hosting center in Reston, Va., and another on the West Coast. It plans to open 11 centers and to offer the service on FTS 2001. The company also has built a dedicated federal management center in Herndon, Va.

One interested agency is the Veterans Affairs Department.

'We are very aggressively searching out a managed national services contract,' said Robert Bubniak, acting assistant secretary for information technology and acting CIO.

VA is retiring its 16-year-old Integrated Data Communication Utility, which served 233,000 workers, and replacing it with FTS 2001 services from Sprint. IDCU's bandwidth requirements have doubled each year, and VA no longer has the staff to monitor the network day to day.

Comm coalescence

Another trend is bundling several types of communications onto a single network.

'On the government side, convergence gets rid of all the different instruments on the desk and replaces them with a single device,' said Ray Bevacqua, business development group manager for Sprint's government systems division.

The IP network is the apparent choice for integrating voice, video and data'wired or wireless. Demand for IP convergence will be driven by the enhanced apps it promises.

'How we are going to migrate the circuit-switched environment to the IP platform' is a question FTS is struggling with, Johnson said. 'We're not going to charge down a technology path until we find a way to increase services dramatically.'


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