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Using Power for GoodUsing Power for Good

11:00 AM The 'Big 2' may be all powerful, but the influence of AT&T and Verizon can help other operators, too

November 10, 2009

3 Min Read
Using Power for Good

11:00 AM -- AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ), the "Big 2," are often reviled for their size, charged with being too cumbersome to adapt quickly to market changes, seen as too bureaucratic to be truly customer-oriented, and regarded as too entrenched in their ways to be innovative.

But the reality of the U.S. telecom market is that AT&T and Verizon are the major forces capable of driving change: When one of them adopts a technology or an approach to a challenge or problem, there is an immediate shifting of the telecom axis. And that's not always a bad thing.

Verizon’s multibillion-dollar investment in FiOS has made fiber-to-the-premises technology affordable for everyone else. The fact that Verizon continually pushes its vendors to drive cost out of deployments has helped launch multiple new form factors and ease-of-installation innovations.

When Verizon decided to wire multi-dwelling units (MDUs) -– fiber to the apartment -- it again pushed its vendors. The result was a set of technology breakthroughs that are now making fiber-to-the-desktop a possibility, a move that could have a dramatic impact on office and building wiring. (See Verizon Brings GPON to the Desktop)

AT&T has pushed vendors as well, becoming a driving force for better compression to enable more video to be delivered over its copper-fed networks. Margaret Chiosi, executive director, Optics & Ethernet Service Development, for AT&T Labs , told the crowd at Light Reading's Ethernet Expo Americas 2009 in New York City last week that AT&T was able to consolidate its networks following the SBC-AT&T-BellSouth mergers in part because it adopted one architecture -- an MPLS backbone -- and then forced its vendors to build Border Gateway Protocol (BGP) signaling into their MPLS equipment so it could avoid having to build another control plane. (See AT&T: Ethernet Is It and EENY: Is Everyone's Ethernet the Same?)

Who wouldn't want that kind of power? But with power comes responsibility, and just as AT&T and Verizon can lead a market, they can hold it back.

Today, within the Ethernet market, there is a debate over whether connection-oriented Ethernet developments should move toward MPLS Transport Profile (MPLS-TP) or Provider Backbone Bridging - Traffic Engineering (PBB-TE). (See MPLS-TP vs. PBB-TE.)

Some are waiting for AT&T or Verizon to make a move that will, in turn, affect what vendors are doing.

"Vendors are talking in the MEF , in the Institute of Electrical and Electronics Engineers Inc. (IEEE) , and in the International Telecommunication Union (ITU) ," says Asim Zakria, director of Technology Management and Architecture at business services specialist Covad Communications Inc. .

"If one of large service providers would show the commitment to deploy one or the other type of standard in a given time frame, vendors would then grab that and run with it. We can benefit -- we can be fast followers. We will commit to a solution, then as they succeed, we succeed."

It’s likely that Covad is not the only competitive operator watching carefully what the big guys do. Love it or hate it, the role the "Big 2" play is undeniable.

— Carol Wilson, Chief Editor, Events, Light Reading

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