Sonet technology to join 100 cities
The nation`s fifth-largest long-distance carrier, Frontier Corp., in Rochester, NY, is joining forces with Denver-based Qwest Communications to build a $2 billion network based on Synchronous Optical Network (Sonet) technology. The network build is slated for completion in 1998.
The nationwide Sonet broadband network is expected to interconnect nearly 100 cities (see figure, page 25), provide border-to-border connectivity between Mexico and Canada, and include at least one additional circuit to allow for future growth. It encompasses more than 13,000 route-miles and furnishes coast-to-coast Sonet network connectivity.
The network`s Sonet architecture is expected to be self-healing, redundant, and 100% survivable. When complete, the network will be able to support at least six self-healing Sonet rings. The network`s 24 fibers enhance transport capabilities and increase bandwidth and reliability. According to Robert Barrett, president of Frontier Corp.`s Network Systems and Services, "Self-healing capability means that our customers will not detect any fiber break for voice or data traffic."
The multi-ring network is expected to reduce Frontier`s network transmission costs by 50% to 80% and to increase present network capacity as much as 40 times.
Lucent Technologies in Murray Hill, NJ, has been selected to provide its TrueWave singlemode fiber cable to handle current and future network requirements. The fiber can carry optical signals at multiple wavelengths using optical amplification. It transmits the same 1550-nm signals as conventional dispersion-shifted fiber, but conveys them with less distortion. This allows signals to travel greater distances and at higher bit rates before requiring electronic regeneration.
Commenting on Lucent`s role, Traver H. Kennedy, director of wide area network research worldwide for the Aberdeen Group Inc. in Boston, observes, "Perhaps the most important aspect of the Frontier/Qwest announcement is that Lucent Technologies is demonstrating that it can effectively move significant volumes of its products from the lab to the market without AT&T. There`s no question that Lucent`s TrueWave fiber sets a new standard for extended life and long-term flexibility in commercial transmission environments. Due to its higher-quality characteristics, TrueWave fiber supports a more passive infrastructure and greater end-point upgradability.
"Assuming the industry can develop appropriate measurement and access technology for high-speed Sonet rings, this new generation of fiber can yield terabit speeds. Kennedy also points out that "the promise of advanced wavelength-division multiplexing is that its architecture and economics allow each end-user point of presence to be fiber. In time, fiber networks will jump the curb and head straight into the kitchen, home office and media room."
$500 million investment
Frontier is investing $500 million in the new network build. This figure includes construction, fiber, electronics, engineering and design. The funding is slated to begin now and extend into 1998. It is projected that more than half of the investment costs will be incurred in 1997. Frontier expects to finance the project primarily with cash from operations and short- to medium-term debt loans.
The company is expected to deploy the latest in Sonet-transmission electronics to hike network speeds from 2.5 to 20 Gbits/sec. Frontier did not specify suppliers of Sonet network electronics.
According to Frontier`s Barrett, the new network will give the company a short- and medium-term advantage over competitive long-distance carriers. He explains that establishing control over network quality, availability, price, operations and management is critical to the company`s growth. "We continue to believe that there is tremendous growth potential in the long-distance business, especially in the demand for services that require more bandwidth, such as video," he says.
Despite these comments, Bryan Van Duessen, director of research, telecommunications, for the Yankee Group in Boston, sounds a precautionary note. "There are waves of expansion and contraction in telecommunications. Right now, we are in an expansion mode, and there is the danger of overcapacity and glut in the marketplace. Demand is high--fueled by Internet service providers. There is the danger that companies can build themselves out of the marketplace."
Frontier does expect to have excess network capacity when the network is completed. "This capacity may be leased to others," Barrett stated in a national audio conference held recently.
Van Duessen further observes that this joint venture is a good move by Frontier. "The company considers itself a leading-edge facilities provider and does not wish to rely on the resale of other companies` bandwidth." He also points out that telecommunications companies do not have a good track record in completing joint-venture deals. "The build remains in a state of `it-remains-to-be-seen` until 1998."
At the same time, he thinks the industry can expect to see more mega-deal fiber-optic network build announcements. "Demand is extremely high and growth rates are in the 20% range for many telecommunications companies," Van Duessen comments.
In the opinion of Ronald Brown, an information technology management consultant in Melrose, MA, "The Frontier/Qwest fiber network demonstrates these companies` commitment to the market and their customers. Sonet is the preferred networking approach for its speed and reliability. It also reduces operating costs, and in a commodities business like telecommunications, low operating costs are all-important."
Mike Smith, lead analyst, network services, Datapro Information Services Group, Delran, NJ, notes that "Frontier is seeking to establish itself as a facilities-based provider of high-performance network services specifically targeted at businesses. Having fared well, financially speaking, over the past few quarters, Frontier appears well-positioned to support the required capital expenditures associated with the network build. By deploying Sonet facilities, Frontier will operate a network second to none in performance capabilities."
Doug Hanson, Qwest president, explains that this joint venture will allow Qwest to complete its national network build faster. He notes that 3500 miles of Qwest`s network is complete. The company is also investing $500 million in construction of the new network.
In addition, Qwest is considering routes that would add 4000 miles to the network. The company has right-of-way agreements with major railroads covering 40,000 miles of fiber-optic cable. The company`s construction division, SP Construction Services, which pioneered the installation of fiber on railroad right-of-way, is building the Frontier/Qwest network.
Hanson says the new network is expected to provide its owners with the lowest operating costs in the industry. He adds, "Network users will not only enjoy the high reliability of our conduit-protected system, but will also position themselves competitively from a cost standpoint. The Telecommunications Act of 1996 has greatly stimulated industry growth. This new network will most certainly increase competition and is likely to drive down prices."
The Frontier/Qwest network is planned to be one of the most secure national fiber systems in the United States because of Qwest`s protective fiber-construction techniques, which encase the fiber cable in conduit buried more than four feet deep.
In addition to the rights to use railroad rights-of-way in the United States, Qwest also has rights to install optical fiber along all primary routes of the Mexican National Railroad and is actively negotiating with potential partners in Mexico for the deployment of fiber along those routes. q