By MEGHAN FULLER
In October, SBC Communications Inc. (San Antonio, TX) unveiled its Multiservice Optical Networking (MON) service designed to provide large enterprises with an efficient, scalable way to connect mainframes, data centers, and storage networks within a metropolitan area. SBC will provide the basic service as well as a Data CPE offering for those who have already done custom builds or rented dark fiber. While there is some contention about the current level of demand for such sophisticated services in some metro regions around the country, the overall market seems poised for escalating demand in the near future.
SBC's MON offering is a dedicated point-to-point network solution employing DWDM technology, which enables traffic to be transported in various native protocols, including Escon, Ficon, ETR, ISC, Fibre Channel, Fast Ethernet, Gigabit Ethernet, SONET, and D1 video. The only native high-bandwidth point-to-point service SBC currently offers is the Gigabit Ethernet-based GigaMAN. While the offering has proven to be popular, it is also limited, admits SBC spokesperson Ashley Blaker.
"It requires a dedicated fiber pair," he explains, "so you've got one stream going up and one stream going back between two buildings, as it were. And it's only that one protocol, whereas there is a lot more flexibility if you introduce WDM." The MON offering supports up to 160 Gbits/sec of unprotected traffic or 80 Gbits/sec of protected traffic in its native protocol format, which eliminates the need for expensive translation processes to enable cross-platform interoperability, contends the company.
Nicolas Maynard, a research analyst with Boston-based Yankee Group, believes that retail wavelength services such as SBC's will become an important niche market in the near future-one that carriers can't afford to ignore.
"Right now, [it] is a long-haul market," he explains, "and then in the metro, you're talking about PoP-to-PoP [point-of-presence to point-of-presence] connections for service providers, extending network reach for carriers, market entry for international carriers." While he admits that these situations differ greatly from SBC's MON service, Maynard contends that such access services will become more numerous as prices come down and equipment evolves.
"We just did a survey of North American-based multinational corporations," says Maynard, "and we asked them, 'What is the speed of your current connection to the Internet today and what are you expecting in 2003?' What we found was in 2000, 6% [of the respondents] were using a connection at 622 Mbits or more, and in 2003, 20% expected to be at 622 Mbits or more. That's a big jump."
The number of competitive offerings planned or already available speaks to the demand for retail wavelength services, contends Blaker. In the past five years, many competitive local-exchange carriers (CLECs) have built metro-area fiber rings to provide enterprise-targeted access services. XO Communications (Reston, VA), for example, currently offers metro wavelength services in 62 U.S. markets, and Cogent Communications Inc. (Washington, DC) provides metro Gigabit Ethernet services in 10 U.S. cities. Genuity Inc. (Woburn, MA) will offer inter-LATA wavelength services in 28 major U.S. markets by the second quarter of 2002, and Telseon Inc. (Englewood, CO) aims to have its 2.5- and 10-Gbit wavelength services up and running in 18 American cities by the end of the year.
And then, of course, there's Verizon Communications Inc. (New York City), which has set up shop right in SBC's backyard. In July, Verizon announced plans to light up facilities-based data transport services on six fiber-optic rings (covering 270 route-mi) in the Dallas/Ft.Worth metroplex area, where there are approximately 3,500 company headquarters and an additional 32,000 sites that might require such services-many of whom are Southwestern Bell customers.
Rob Carlson, senior analyst in network services for market researcher Current Analysis (Sterling, VA), contends that SBC was forced to offer a similar service to compete with Verizon. "SBC really cannot have Verizon play on its home turf unimpeded," he asserts, adding that the MON announcement seemed, to him, "decidedly underwhelming." First, demand for high-bandwidth wavelength services in the Southwestern Bell region is relatively low, he argues, and second, several other CLECs have announced similar offerings with better speeds in areas where demand is much greater.
"A wavelength service is just a super-high-capacity connection between two points," explains Carlson, "and there's just not a whole lot of demand for that capacity bandwidth outside of the carrier arena, and there's not too many of them playing in the limited number of major markets in those states."
SBC's Blaker contends that there is more than enough demand to justify such an offering, however. "If we didn't believe there was demand, there would be no incentive for us to have gone through all of the cost and effort to make this available to customers," he asserts, adding that the number of competitive offerings further validates the existence of a viable market. He also cites the immense cost involved in rolling out a new service and contends that neither SBC nor its competitors would offer a service in this economy without assurance of demand.
At press time, the service was only available in the five states in the Southwestern Bell territory-Texas, Oklahoma, Missouri, Kansas, and Arkan sas-although SBC hopes to make it available in all of its territories by the end of the year, or as soon as it has received the necessary regulatory approvals. There is no set rollout schedule per se, as SBC will only provide the service where there is demand.
"This is a point-to-point solution," contends Blaker. "It's not an inexpensive solution, so you can see where you wouldn't just go out and outfit your whole network, in case two customers-at point A and point B-want to be connected. It just doesn't work that way. You want to have all of the agreements in place, all your engineers trained, so that as soon as a customer wants it, you go set it up for them."
While Yankee Group's Maynard admits that the SBC announcement may be motivated partly by competitors' recent announcements, he contends that carriers in general cannot afford to ignore this burgeoning market. "There may be a small number of companies [who need this service]," he says, "but they represent a large market in terms of IT dollars spent."
Moreover, Maynard argues, SBC's offering is just part of the overall wavelength services market evolution. "In the future, you'll start to see some OC-12-equivalent services, and you'll see more managed services, so instead of just taking care of the DWDM, you're also taking care of that SONET gear," he contends. "You're also managing that Ethernet connection. I think you'll see a migration toward more flexibility in terms of capacity, more managed services."
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