New optical tech deployments slow but gaining ground

TRENDS

By ROBERT PEASE

The technology choices and deployment timing for today's network owners and service providers will be key to the industry's economic recovery over the next year. Some advanced technologies poised to lead the way to economic recovery include Ethernet and Gigabit Ethernet, passive optical networking (PON), all-optical-network (AON) elements, and a combination of SONET and broadband PON. But how soon will carriers begin deploying these new technologies? Although many factors weigh in the decision to make a technology move, the criteria usually include lowering expenditures, the use of embedded technology, and telecommunications deregulation.

"The economy is having a drastic effect on the telecom carriers," says Kay Burin, director of advanced technologies at AT&T's local-network services division in Dayton, NJ. "The emphasis is on efficiencies and maximizing profitability. Financials are leading the way in terms of what will be done, but everything must be proven-in for economics or cost reduction."

If the current economic climate has any silver lining at all, it's in buying carriers a little time in making those spending decisions-although competition for the last mile is intensifying. "Customers need flexible, low-cost, point-to-point and point-to-multipoint connectivity to support data applications and services in the metro area," explains Burin. "Ownership of the last mile, or access loop, remains key to profitability."

Although Burin believes Ethernet will eventually erode existing SONET and ATM data services with a more cost-effective, high-bandwidth approach, she remains convinced that acceptable solutions will interoperate with existing infrastructure. Dean Casey, director at Verizon Laboratories (Waltham, MA), agrees that the embedded base of today's technology presents a significant challenge to carriers. However, there are many more obstacles to deploying new technologies.

"We face challenges today that include tighter deployment budgets," says Casey. "The rationale for deployment is changing with slower traffic growth. All-optical network technology is still in its 'adolescence'-platforms are in 'infancy.' To reach a solution, carriers need corporate-level management support, stronger vendor alliances, and validation of technologies and systems in labs and in the field."

Management, interoperability, and cost aside, there is one other significant hurdle that rises to the surface in discussions of deploying advanced technologies in today's economy. Most carriers agree that the Federal Communications Commission is contributing to the telecom depression and curtailing investment into the sector by a lack of expediency in rendering de-monopolization decisions, deregulation, and independent facility incentives for incumbent local-exchange carriers (ILECs).

"The FCC is sitting on the fence with many critical issues in opening up the local exchange," says Dave Rusin, president and CEO at American Fiber Systems Inc. (Rochester, NY). "It's the worst position for the FCC to take, as venture capital investors do nothing while this lack of regulatory direction remains in flux."

Costly cost model?
Since 1999, the Supreme Court has heard two major cases regarding the FCC's implementation of the interconnection and network access provisions of the Telecommunications Act of 1996. The infrastructure-sharing rules, say carriers, force incumbent local telephone companies to share elements of their networks with competitors at heavily discounted rates.

The most recent case of Verizon Communications vs. FCC rendered a decision that enables federal regulators to continue applying these rules and is regarded by many, particularly the ILECs, as a major setback to telecom deregulation. The rules are highly controversial among carriers since they don't believe the FCC's cost model promotes real competition.

"Making the ILEC bound by unbundled network elements [UNEs] stalls robust expansion and innovation-not only by competitive carriers, but the ILECs themselves," surmises Rusin. "Common sense dictates that, in order to achieve network diversity and security, shared UNE facilities not only poses an economic risk, but is void of diverse routing options, scalability, and reliability."

Rusin does, however, support making UNEs available for spurring telecommunications competition in more rural areas. Without a UNE offering in rural areas of 300,000 inhabitants or less, notes Rusin, competition or choice of services would not become a reality for another 20 years.

Despite all these and other barriers for deploying advanced technologies, carriers cannot sit still. The ILECs may still have the advantage, particularly if non-ILECs bask in the FCC "hand-outs" while neglecting to realize facilities and innovation as a prerequisite for survival and expansion. ILECs may be able to simply outlast the recession until the next investment cycle.

No longer will carriers buy technology for technology's sake-those "optical money machines" of yesteryear are as much a part of telecom history as the teletypewriter. But as the fight continues toward more acceptable deregulation across the board, competition can again be a catalyst for network expansions and improvements.

"The economic growth rates of our industry are profound and grow each and every year," observes Rusin. "The act of making a phone call or data-based transaction is not diminishing-it's growing. As long as there remains this innate human characteristic to communicate, our growth and opportunities are unlimited."

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