DLC Vendors in Next-Gen Name Game

There's a name game going on in the access equipment market. The objective: come up with a catch-all way to classify the latest generation of digital loop carriers (DLCs).

Today's DLCs have to support so many features and functions that they make the devices in carrier networks today seem over the hill. Or under it.

From a name point of view, this presents a problem, because this out-of-date equipment is widely known as "next-generation digital loop carriers" or NGDLCs, reflecting a leap forward in DLC technology more than a decade ago. As a result, vendors are scratching their heads and finding it difficult to agree on what to call the new beasties.

Some background: Since the 1960s, "digital loop carrier" has referred to those systems that were basically channel banks used to extend the carrier's local loop so it could provide voice service to customers that needed it. DLCs helped carriers provide service without having to string twisted copper pairs all the way from the central office facilities to the customer's premises.

In the late 1980s and early 1990s, the NGDLCs arrived from Optilink (acquired by DSC Communications, which was acquired by Alcatel SA). Optilink first called its boxes "optical loop carriers" because of their ability to handle fiber connections on the transport side, while still feeding POTS (plain old telephone service) customers over copper pairs. The company then leaned toward the NGDLC descriptor.

Industry lore says then Optilink VP George Hawley came up with the term next-generation digital loop carrier to help the company differentiate itself from Lucent Technologies Inc. (NYSE: LU), which then had the lion's share of the market with its subscriber loop carrier platforms (SLCs). "I don't know if I remember it that clearly, but it's a pretty good story," says Kermit Ross, who was former director of marketing with Optilink and worked with Hawley.

Whatever the case, by the time Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI) and others rose to prominence, DLCs were not only handling voice, but were also expected to handle ISDN and DSL connections as well.

The modern DLCs must handle all the traditional legacy functions -- and the kitchen sink. The new table stakes are broadband and POTS in every slot, packet voice and softswitch interfaces, as well as the ability to migrate to optical connections on the subscriber side, for applications such as fiber-to-the-home, according to Ryan Koontz, director of marketing at AFC. And, by the way, video over DSL is right around the corner, too.

"If all you're going to provide is POTS, the technology carriers have today is fine," says Russ Sharer, VP of marketing at Occam Networks Inc. (OTC: OCCM). "Alcatel and AFC have done a very good job of wringing costs out of those [legacy DLC] products."

And, thanks to the sizzle added to the DLC story by data applications, the DLC market is growing even while RBOCs are steadily losing access lines and making fewer dollars on providing POTS. In 2003, the DLC (or whatever you call it) market is projected to be worth $810 million, up from $676 million last year, according to Michael Howard, principal analyst at Infonetics Research Inc.

So about this naming problem: what do you call today's NGDLCs? NGNGDLCs?

Market leader Alcatel still calls its Litespan series a digital loop carrier. Other vendors -- including Catena Networks Inc. and Occam -- use the term broadband loop carrier. Industry analyst firms, such as Infonetics, embrace BLC as well.

AFC tried the term Integrated Multiservice Access Platform (IMAP) for a while, but abandoned it about a year ago. Now it's warmed up to the term "Broadband DLC."

TelStrat International sells DLCs, too, but calls them Multi-Service Intelligent Access Platforms. And the functions provided by Telstrat's DLC are referred to as Packet Loop Carrier capabilities.

Calix Networks, with all its integrated functions and stuff, goes with "Simplified Services Platform."

One thing many of the DLC vendors agree on is that some new name is sorely needed. "I call the current NGDLCs 'LGDLCs,' or last generation DLCs," says Ross. "What comes after them will be considerably different."

— Phil Harvey, Senior Editor, Light Reading

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rbkoontz 12/4/2012 | 11:54:53 PM
re: DLC Vendors in Next-Gen Name Game Not sure where Infonetics got these numbers- "the market is projected to be worth $810 million, up from $676 million last year". I recall RHK number show the market has been down every year since 2000 when it peaked at $2.2B. For AFCI, the only pure play in this space, revenues are down since 2001 and flat this year.
inauniversefarfaraway 12/4/2012 | 11:54:52 PM
re: DLC Vendors in Next-Gen Name Game MW,

Your surmise is quite right. Cheerleaders of bb are consistent in preaching that, although cable is ahead, they will surpass... someday.

These people live in a strange universe. Legislation is to blame for poor trends, regulation is too risky. It's certainly not because there is no hope for bb, or that it's a white elephant.

Now they have new legislation, and it's still not good enough.

Sadly, these are products are the "noise" society has to deal with. Stakeholders will do everything they can, in a desperate attempt to salvage something of their investments. What do they care if the stock is worthless later, or if suitors get stuck with vaporware down the road, they'll have moved on to the next racket.

How many billions have been throws at the problem since the 60's? Still no solution that's cutting the mustard. Remember the video phone?

As the report points out, attempts at providing some type of quality service is a pipe dream that has existed since the 60's. Now, a new moniker is needed, as if that'll change the trend.

DSL was never that great. This is why these folks are desperate for anything else, hence their clever strategy to move to FTTH. There's another racket, to save the DSL industry, and reinvigorate the deceased fiber industry.

When companies like Cisco, Nortel, and Lucent themselves access the internet via T1 connections, how in the world can the average consumer "use" the bandwidth available on fiber is yet another mystery, much less making it cost effective.

The only element worth adding to your post is that the geniuses at these firms have never really come to grips with the fact that the trend lines between cable and bb don't intersect. That means that, unless some discontinuity is forthcoming, cable will dominate. Proposals for this discontinuity include legislation, FTTH, services, gaming, pornography...

Will investors ever come to grip with the fact that these firms are selling a bill of goods? Of course not, they are also selling the same bill of goods.

The local loop is not the greatest medium, except insofar as being consistently "reinvented", and always rediscovered to be inadequate, and mediocre. If it wasn't for the abundance of (dumb) money, it would have died a restful death long ago. Yes, copper makes great phone line, and not much else.

Fiber is too fragile to cope with the "cable guy." It'll simply never happen. It's way too expensive, and what use is it? Some undefinable service that will happen because of it?

It's time to grow up, and to admit that cable really does work. It's resilient, easy to install, has enormous bandwidth, and provides the elements other technologies simply fall short in terms of cost, convenience, durability, and customer satisfaction.

OTOH, keep throwing money at these white elephants, they make for great fireworks. Can't get it right since the 60's, give me a break. Don't sweat the numbers, they have little to do with reality. Remember, although Alcatel, Cisco, Lucent, Nortel, and all the other players are using T1 to access the net, they want you to believe you "need" 10G to the desktop.

If it wasn't for the fact that cable isn't yet deploying telephone service, phone companies would dissapear from the face of the earth within a few years, along with the whiners that can't seem to realize that the medium just isn't worth the effort.

PackMan 12/4/2012 | 11:54:50 PM
re: DLC Vendors in Next-Gen Name Game It just so happens that Alcatel's DLC division was the only profitable division there last year. And AFC was one of only about three or so telecom companies that actually made a profit last year. So there you go.

With regard to DSL vs. cable, DSL is in fact ahead of cable worldwide; only in the U.S. is cable ahead of DSL.

The reasons why DSL and DLCs will not go away any time soon are:
- Many homes, particularly in rural areas, still don't have cable TV, and will not possibly forever.
- It still costs tons of $$ to dig up the ground, or hang new ugly wires in overhead installations. Much cheaper to use existing infrastructure at the edge.
- VoD will be a big deal for cable. Cable doesn't have nearly the bandwidth as fiber, thus as bandwidth requirements increase you have to drive the swiching intelligence further and further towards the customer. With DSL each customer already has his own drop to the switching device, so this isn't an issue; you only have to add components in the switching device. With cable you have to install new switching devices and reroute cables. VoD makes this a big deal because a given group of subscribers will need much more bandwidth which cable cannot provide until you get much closer to the home.

In reality the line between the two will get blurred anyhow with video services since most cable uses fiber for its core infrastructure anyhow. Some FTTH and DSL video solutions utilize cable in the home, so the difference between cable providers and telephony providers is only a matter of where the fiber meets the cable (or CAT-5 or whatever).
inauniversefarfaraway 12/4/2012 | 11:54:49 PM
re: DLC Vendors in Next-Gen Name Game Thank you PM for making my points for me, it is appreciated. It took me a few minutes to figure we were arguing the same point, but I will entertain everyone by actually trying to debate some of your more comical contradictions.

Wireless was the only division in Nortel that made money, does that mean that wireless will win in providing bb services? No. Your examples hardly make a case.

Feel free to publish your numbers. Yet again, estimates and projections don't make it so. US is the only country where cable is ahead, is that right? You really want to stand on that leg?

Either way, time will tell, and you will lose the bet, as has been proven since the 60's. Your hard sell is hardly a sell. Smoke and mirrors is all this is about.

Let's try the following test. The premise that cable can't provide voice services is absurd. Basically, the premise is that cable can't provide for a couple of 64kbps channels, when the medium can provide hundreds of channels, today, right now. Can your VoDSL do anything remotely similar: no.

It seems far less plausible that video will ever make it on DSL in any meaningful form. People can't wait ten seconds if a web page won't load, how long do you plan to keep them waiting for your video download? Guess you'll need fiber alright.

By the way, thank you for affirming that VoD will only be a reality on fiber.

It is far more rational in the scenario you describe of cable scarcity in rural areas, to bring cable to them. Much, much cheaper than your proposition of bringing DSL, then fiber. You refute this by saying they will never want cable. Why would they need your high bandwidth services. Maybe they want piece and quiet.

Much cheaper to use existing infrastructure, care to present a cost analysis? There's your bill of goods. You probably also believe that it's easier to renovate a money pit than to build something decent and new. Besides, you can always buy more gear later, isn't that right? And you'll be happy to provide it.

You propose an inadequate solution, and you affirm that it will need replacement. All the while, cable would fufill all the requirements, it's available today, at a known cost. You can only present superlatives in regard to the cost involved in your so-called solutions.

You state the following:

"Many homes, particularly in rural areas, still don't have cable TV, and will not possibly forever"

>>> Not possibly forever? <<<<

But you then say these people want BB? Coffee?

On the one hand, you state that using existing infrastructure is the way to go, negating the advantage of installing cable, on the other hand, you state that fiber will beat that technology sometime in the future. This will be a big deal for cable? Is that right? They are loosing sleep over your vaporware technology?

According to you, cable companies are loosing sleep that you brave boys are going to suddenly dig up the ground to lay fiber down? But you said earlier that digging the ground is expensive, "It still costs tons of $$ to dig up the ground, or hang new ugly wires in overhead installations"

"new ugly wires" Hahahahahaha, this is great material. There wouldn't be any overhead wires if people had their way, they're all ugly. Society does tolerate ugly new wires though.

Cable people must only be loosing sleep over the fun they're going to have watching the phone companies go bankrupt, or because they're laughing at the show.

Society should simply jetison these people that are constantly trying to bring value to this dead media. This is the equivalent of make work, or working welfare.

That's right buddy, argue that the lines will get blurred sometime down the road, very vague.

Bottom line is still very much that cable does everthing the consumer expects, and much more. It is the most cost-effective, future-proof technology that is available now, and with minimal effort, R&D, and tax dollars.

The rest is just another freak show that's going to disappear sooner or later. The quicker these folks stop working on "make work" projects, the sooner they can be put to work on technology that actually delivers value to the customer.

Besides, your position is weaker. Five years of crying, and you folks are still spinning the same yarn. All the projects you describe are re-cycled ideas. They were too expensive when developped in the telcom co's, and the promise of cheaper components hasn't panned out. You just don't want to let go of the dream.

Maybe Alcatel will always be the only company that's profitable in DSL. Maybe they've got it all figured out. Why would anyone go elsewhere?
BobbyMax 12/4/2012 | 11:54:48 PM
re: DLC Vendors in Next-Gen Name Game There are about 29 DLC vendors. Gradually there have been improvement in the feature of DLC and their performance and relaibility has increased. The RHK report on the DLC market size is under-rated. The correct size of the DLC market size appears to be the order of magnitude of $500 million.
hitekeng 12/4/2012 | 11:54:39 PM
re: DLC Vendors in Next-Gen Name Game It worked for wireless and DSLAMs so it should apply the same to DLCs. POTS DLCs (SLC-96, DMS-1U,..) are plain DLC or 1GDLC. Alcatel's, AFC's and similar boxes fall under NGDLC or 2GDLC (fiber-fed POTS & DSL carriers). Evolved carriers fall under 3GDLC and on...
hitekeng 12/4/2012 | 11:54:24 PM
re: DLC Vendors in Next-Gen Name Game PM and Far'y,
depending on the market being served, you may both be right...
However with the evolution of DBS and wireless services, neither may provide a ubiquitous offering suitable for all markets in the future. Just consider that:
- we can now get satellite TV with a 5 inches dish way down from the 5ft dish it started with. -- data rates have increased by at least an order of magnitude for wireless.
- neither require outside plant cables installation or maintenance.
- both are quick to deploy and install with one or no truck rolls from providers.
light lunch 12/4/2012 | 11:54:13 PM
re: DLC Vendors in Next-Gen Name Game fgoldstein,

Why does Occam's "eye-pee" solution degrade voice quality? I don't know much about the technology, but if they're pitching themselves as a real standards-compliant carrier class DLC (ooops, sorry, BLC), don't they have to deliver the same quality of voice service as other technologies?

fgoldstein 12/4/2012 | 11:54:13 PM
re: DLC Vendors in Next-Gen Name Game You'd think with all the trouble in the industry, manafacturers would search for unfilled niche markets. But instead they copy each other. Sure, everybody has a mux that can deliver lots of dialtone and DS3s out of an OC-12 feed. Just what every house needs, I'm sure.

But I can't find bo diddley to serve real world applications. For example, I've got clients looking to serve MDUs with, say, a goal of 50 dialtone+DSL subscribers. An IAD won't do; it only delivers up to 24 phone lines, and won't drive DSL by itself. An "NGDLC" won't do, because it needs two T1s for GR-303 voice and at least one separate T1 for the data. Woudn't it make sense to feed everybody from a flexible grow-as-you-go ATM feed, with voice on BLES? Instead, I've got to choose between a multi-box kludge (at best, multiple Occams, but they don't do ATM, just eye pee, which degrades the voice quality, or else an NGDSLAM + channel bank) or an expensive box that's overkill and needs too much bandwidth to make it pay. (In rural areas, T1s are costly.) There's a product hole you could drive a truck through.

Everybody's "new" products seem like nightmares otu of the dotcom boom days, when VCs expected infinite supply and demand for bandwidth, and IP under alles. The generation we need is practical gear.
sevenbrooks 12/4/2012 | 11:54:11 PM
re: DLC Vendors in Next-Gen Name Game

You are mistaken that all DLCs require multiple T-1s for 303 and yet another one for Data.

There is a DLC product that can do this over a single T-1 (in fact it can even support redundant EOC and TMC channels over the T-1 for all that that is worth). By the way, its sounds like you are wasting a whole lot of money if you are using a 303 group to run 50 customers. This same product can share up to 33 remotes into a single 303 VIG. Its all generally available today. Been generally available for some time.

As for other differentiation, you simply don't understand the environment. To be a DLC, one must provide the elements of TR-57. TR-8 and GR-303 are also required if one supports them. There are other ancillary specifications for DDS and ISDN. Now, the reality is that these are REQUIREMENTS.

What you have described is not a DLC, but shares many common interfaces with them.

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