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October 9, 2002
DENVER -- Asynchronous Transfer Mode (ATM) or Multiprotocol Label Switching (MPLS)? Which technology will prevail in incumbent telecommunications networks?
That’s the question equipment vendors were debating here this week at MPLScon. The discussion especially focused on which technology will be used by the regional Bells, now seen as the last large source of serious funding. Ironically, few if any RBOCs are actually attending the conference, so the equipment vendors had the luxury of launching a debate in which their customers had no say.
According to a panel of vendors -- which included representatives from IP companies, Cisco Systems Inc. (Nasdaq: CSCO), Juniper Networks Inc. (Nasdaq: JNPR), and Vivace Networks, along with more ATM-centric vendors, Équipe Communications Corp. and Marconi plc (Nasdaq/London: MONI) -- all the major RBOCs are very interested in MPLS for certain parts of their networks, but widespread rollout isn’t expected for the next year and a half. All panelists agreed that ATM will continue to play a major role in existing network deployments.
The regional Bells are looking at MPLS, says Dan Proch, of Marconi. “But today they are buying bigger ATM switches for their existing local networks.”
MPLS is considered by many to be a unifying technology that could tie together disparate data and ATM voice networks on the telecommunications backbone. At the same time, MPLS would enable the deployment of new services such as virtual private networks (VPNs). But capital expenditure concerns and debt issues are forcing most RBOCs to put their plans for network convergence using MPLS on hold for the time being.
Carriers would have the option of using either Layer 2 MPLS tunnels based on the Martini draft standard, while others might opt for a Layer 3 IP VPN based on Internet Engineering Task Force (IETF)draft 2547. In either case, it's MPLS, not ATM, that will be used to build out the new networks, according to Michael Sheehan, product manager at Juniper.
While MPLS may be used to tie older data and voice networks to newer switching and routing technology, the bulk of the existing in-region networks will remain based on ATM technology, said the panelists. All the vendors on the panel agreed that RBOCs are not going to abandon their high-margin Frame Relay or ATM access business any time soon. The customer-facing service will continue to be FR or ATM.
Is anybody ready to buy this stuff? Many of these vendors are pinning their hopes on Section 271 of the 1996 Telecommunications Act, which will allow RBOCs to enter the long-distance market if they can demonstrate that they have opened up their local markets to competition. As incumbents pursue business over Local Area Transport Authority (LATA) boundaries -- which are currently used to separate local providers from long-distance providers -- they will need to build a new network. Section 271 relief has already been granted in several states including Kansas, Massachusetts, New York, Oklahoma, and Texas.
So if RBOCs aren’t expected to deploy MPLS gear anytime soon, where do equipment vendors turn for near-term revenue? The answer is overseas. Asian carriers, European PTTs, and Latin American carriers seem to offer the best opportunities for these vendors over the next year and half. In Asia for example, providers like Juniper, Cisco and Riverstone Networks Inc. (Nasdaq: RSTN) report that they have seen MPLS deployments where these carriers are offering Ethernet and VPN services. Wireless providers in Europe and Asia deploying 3G wireless technology also are using MPLS as a transport to backhaul the ATM traffic coming off of radio transceivers, says Axhar Sayeed, manager product management for MPLS and QOS for Cisco.
Another opportunity could lie in the cable MSO market here in the U.S. Some providers like Cox Communications Inc. (NYSE: COX) say they are looking to deploy MPLS in order to offer Layer 2 and Layer 3 IP VPNS. Currently, the operator leases its OC48 backbone from Level 3 Communications Inc. (Nasdaq: LVLT) and AT&T Corp. (NYSE: T). Because it doesn’t own access to this capacity it is unable to offer transport services like Frame Relay or T1 provisioning. MPLS would allow the cable operator to offer a competing private-line service to what’s offered by the local incumbent carrier.
“We need MPLS to open our business model,” says Mazen Khaddam, network architect for Cox. “It’s the only way we can provide VPN service.”
But Dave Boland, senior product manager at Équipe, argues that the cable market is a small one for MPLS equipment providers. While he concedes that some cable operators may be interested in MPLS, he says that because most cable plant is installed in residential areas, there is no real market for corporate VPN services offered through cable providers.
”I don’t see them digging trenches to add more cable plant out to businesses just to offer VPNs,” he says. “They’re better positioned for the residential market.”
— Marguerite Reardon, Senior Editor, Light Reading
www.lightreading.comWant to know more? The big cheeses of the optical networking industry will be discussing VPNs at Lightspeed Europe. Check it out at Lightspeed Europe 02.
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