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Feature Article
July 2000


Online Exclusive IP And DSL Services Give Competitive Edge To Building-Centric Service Providers


As businesses of all sizes and all industries reach for the brass ring of e-business, demand for high-speed Internet access continues to rise, creating a tremendously attractive opportunity for service providers. Today's Digital Subscriber Line (DSL) broadband technologies are ideally suited for the task. With DSL, service providers can bypass the local loop -- and avoid paying a "toll" to the local exchange carriers with whom they compete -- while cost-effectively leveraging the existing copper in the customer premise. For small business subscribers, DSL offers all the advantages of a high-speed broadband pipe at a cost far lower than a dedicated T1 line.

DSL has significantly lowered the barriers to entry in the high-speed Internet game, pitting Internet Service Providers (ISPs) against a host of competitive local exchange carriers (CLECs), including so-called "next-gen" carriers. In fact, DSL is creating a whole new category of building-centric service providers focused on providing broadband access on a building-by-building basis. Even real estate investment trusts (REITs) and other companies that own and manage multi-tenant unit (MTU) buildings are competing. Recognizing a revenue opportunity when they see one, REITs are partnering with DSL hardware and service providers to deliver high-speed access to their tenants. This is especially prevalent in commercial buildings, where DSL availability is rapidly becoming a prerequisite to tenants signing a lease.

The Next Big Thing
But even as it opens the door to new revenue models, DSL poses a challenging question to building-centric service providers: what next? To date, DSL has served primarily as affordable, high-speed Internet access to business and residential users. The fact is, DSL has been severely underutilized. Where are the broadband services that would elevate DSL beyond simple Internet access -- and even beyond commodity status?

The answer to this crucial question is appearing in the form of a new generation of converged IP services that combine data, voice, and video over the same high-speed pipe. Leveraging today's advanced IP-based DSL equipment architectures, building-centric service providers can now offer their tenant/subscribers a new generation of exciting subscriber services, customized to their needs, all over the same DSL line that provides basic Internet access. And they can do it extremely cost-effectively. These services offer small and medium-sized businesses a valuable edge, greatly enhancing their ability to communicate with colleagues, clients, and partners. For DSL service providers, IP services represent a rich new revenue source, as well as a vehicle for differentiating their service offering from their competitors'. This last point is especially critical for REITs, who will use broadband services primarily as a value-add to attract and retain profitable business tenants.

New Converged Services
What are these new services? Thanks to the flexible nature of their underlying IP architecture, broadband services can take a wide variety of forms. Indeed, new IP services can be developed or customized rapidly to meet the specific needs of a particular subscriber or tenant. The following is just a sampling of some of the IP services now emerging to give building-centric DSL providers the edge:

Voice Over DSL
If high-speed Internet access was the first "killer app" for DSL, IP telephony seems destined to be the second. Providing voice service over a tenant's broadband DSL line offers the potential for significant monthly cost savings for subscribers (and an attractive, new revenue source for service providers). And, because those services are delivered over a managed IP network right in the building, subscribers will not experience the kind of latency and quality of service (QoS) issues that have plagued some early voice over IP (VoIP) efforts over the public Internet. Probe Research predicts that IP-based networks will carry 18.5 percent of the world's voice traffic by the year 2002. For building-centric service providers, today's IP-centric DSL solutions are the logical choice for carrying voice traffic.

Virtual Private Networks (VPNs)
As companies become increasingly decentralized, they are turning to VPNs to link together geographically distributed offices and workers. VPNs offer all the cost advantages of communicating over public data networks and the performance and security advantages of a private network. The new generation of DSL solutions is ideal for VPNs: the bandwidth for high performance; the sophisticated management capabilities to ensure robust security; the flexibility to allow a variety of remote access capabilities; and extremely cost-effective deployment and scaling. DSL-based VPNs can also accommodate telecommuters, offering high-speed access from home or the road.

IP Multicasting
IP multicasting is an emerging "push" technology that enables DSL service providers to broadcast voice, video, and data over the Internet or corporate intranets without depleting network resources. Based on standards developed by the Internet Engineering Task Force (IETF), IP multicasting enables service providers to broadcast news, radio, and television feeds, stock updates, and voice or video conferences with exceptional cost and bandwidth efficiency. IP multicasting opens the door to a host of customized service offerings focused on the needs of individual tenants.

Video Services
Delivering video over a cost-effective DSL pipe is one of the most exciting of all converged IP services. Today's advanced IP-based DSL architectures can bridge audio and video transmission without sacrificing quality in either, so your corporate sales meeting doesn't end up looking like a poorly-dubbed foreign movie. The possibilities for innovative IP video services are nearly endless, but hot emerging applications include:

  • Video conferencing (providing two-way, real-time video meetings and group collaboration);
  • Video streaming (for high-quality, one-way video, either real-time or recorded);
  • Distance learning (providing either one-way or two-way video communication, with instant online access to learning resources during a class or lecture);
  • Telemedicine (bringing doctors and their patients together via two-way video; and
  • Video on demand (offering the ability to provide movies and other recorded video content directly to subscribers, whenever they want it).

Application Service Providers (ASPs)
The aggregation of business services has fueled the emergence of ASPs providing access to applications, services, and resources residing on external, commercial servers. ASPs offer a variety of advantages, including freedom from costly site licenses and upgrades. In many cases, ASP users can also store data on a secure, remote server. This advantage is driving the emergence of ASPs dedicated to providing data back-up and disaster recovery services. Creating a seamless link between users and ASPs is critical to the success of this innovative concept. Today's advanced DSL solutions provide the high-bandwidth, always-on connection that make using ASP resources as easy and convenient as using a corporate network. Partnering with ASPs, building-centric DSL service providers can deliver to their business subscribers a total solution, with one provider for all services -- including business applications. This offers tremendous cost and convenience advantages to subscribers and powerful differentiation and revenue potential for service providers.

A New Architecture
So why haven't we yet seen widespread deployment of these innovative services? The answer lies primarily in the limitations of existing DSL equipment architectures. Legacy DSL hardware -- called a DSLAM  (Digital Subscriber Line Multiplexer) -- was designed to do one thing: provide high-speed access to the Internet. Going beyond this basic capability meant deploying costly and complicated solutions to provide bridging, switching, routing, and other functions required for delivering converged services.

However, a new "smart" DSL architecture is emerging that is specifically designed to enable the next generation of IP-based broadband services. This new architecture integrates into a single Digital Subscriber Line Access Router (DSLAR) the intelligence and functionality to enable IP services: DSL access multiplexing; Layer 3 IP routing; Layer 2 switching; and virtual private networking. It also provides seamless integration with Ethernet, ATM, and circuit-switched networks and support for a wide range of next-generation protocols -- including RIP, RIP II, OSPF, IP Multicast, VoDSL, and protocols for legacy network support. The result is a DSL architecture that enables simpler and faster deployment of the IP-based converged services. Cost is reduced throughout the lifecycle. Service quality and reliability are improved. Bandwidth management and allocation efficiency are increased. And a single, integrated unit means less space is required in the already cramped building equipment closet.

Think Smart
As DSL continues to make inroads in office buildings, college campuses, residential developments, and other MTU environments, the demand for more sophisticated broadband services will only increase. In the next few years, prospective tenants in a corporate office park may well have video conferencing and VPN on their list of must-haves, along with a conference room and janitorial service. Building-centric service providers able to fulfill those demands will enjoy a captive subscriber base willing to put all their broadband communications eggs in one, cost-effective basket. To ensure they don't get left out, service providers must choose the DSL architecture that lets them cost-effectively deploy these next-generation services. Thinking smart -- thinking IP -- will be the key to transforming DSL from a limited commodity to an unlimited competitive advantage.

Kenneth Osowski is vice president of marketing for Interspeed, Inc.,  a provider of integrated DSL access solutions focused on the MTU and other building-centric DSL markets.

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