Hugo can't budge VSAT fortress

Communications News, May, 1990

HUGO CAN'T BUDGE VSAT FORTRESS

When Hurricane Hugo ravaged the Carolinas last September, First Union's VSAT network faced its moment of truth. Its primary hub earth station, in Charlotte, was thrown out of alignment by winds over 130 mph.

"Hugo put us out of business for a few hours, but recovery was so fast most of our employees never realized there was a problem," says George Mattingly, vice president and director of telecommunications. "As soon as the hub was realigned, the data communications network was back on line.

"The same is true of the 1.8-meter VSATs. Right before the storm, we saw other banks taking down their larger 2.4-meter antennas. GTE Spacenet engineers told me our smaller antennas were survivable in winds up to 125 mph. they were correct but conservative; the VSATs actually survived winds in excess of 138 miles per hour. Although they were pushed around by the high winds, not one was destroyed. And, as soon as power was restored, our ATMs were operational."

Although phone service to homes was virtually unaffected, datacomm transmissions were severely disrupted. "Almost all the merchants experienced problems with their networks. Residents were unable to use their credit cards to buy food and other necessities because the circuitry to validate those transactions was down. But First Union's customers, as well as those of other banks, were able to get cash through our ATM network," Mattingly says.

Top-20 Super Regional

The assets of this bank holding company, based in Charlotte, have gone from $8 billion in 1985 to $38 billion last year. Much of this growth has come from the acquisition of 21 U.S. banks in five states since 1985. This expansion has transformed First Union from a statewide institution to a super-regional bank, one of America's 20 largest.

GTE Spacenet Corp. is implementing a Skystar private data/video network to connect all First Union banking and brokerage sites throughout the Southeast by mid-1990. More than 567 are already operational.

First Union's network of very-small-aperture terminals (VSATs) will support branch automation and transaction processing at 24-hour ATMs, as well as account inquiries and employee computer-based training throughout the 723-branch system.

First Union's 16-office brokerage network is only the second such operation in the U.S. to use this technology.

At each branch, a 1.8-meter VSAT will permit interactive communications with the 6.1-meter dedicated hub earth station in Charlotte, via GTE Spacenet's GSTAR II.

First Union had used traditional leased lines to link branches in North Carolina, South Carolina, Tennessee, Georgia, and Florida. But increased waiting times for line installation and repair became a frustration that was compounded by deregulation.

End-To-End Control

Now, First Union has end-to-end control. It no longer depends on leased lines from multiple telcos.

The bank will reduce communications expenditures by $4.5 million over the next five years. It will be able to predict and budget its monthly communications costs. "Upgrading the speed and flexibility of our system was going to be a major capital investment anyway," says Mattingly.

With its numerous acquisitions in the late 1980s, the bank faced a tremendous challenge in integrating the various data processing systems and telecommunications equipment that permeated the five-state network.

GTE Spacenet's Universal Protocol Card consolidates multiple operting systems, languages, and protocols at VSAT level. Supportable networking architectures include IBM, DEC, and Unisys.

The VSATs can be installed in a few hours. New locations can be brought on line rapidly. Rural sites can be brought onstream as quickly as urban ones, with the same quality and consistency of service.

First Union's network was designed to provide availability rates of 99.6%, as compared with 98% to 98.5% availability using leased lines.

A Little Goes Far

A 1% improvement in reliability means 7.5 more hours of availability a month for each ATM. VSATs have improved terminal response time, due to the 19.2-kb/s data transmission rate (the old network ran at 4.8 or 9.6).

Productivity rates improved. First Union's customer service reps and specialists, who process more than 500,000 transactions daily, now can handle each one a full second faster. This amounts to a system-wide savings of nearly 120 work hours a day--time that these employees can use to focus on current and potential customers and their needs.

"The ability to simultaneously deliver the same message to all our branches represents a powerful advantage," Mattingly says. "We will be able to roll out a new product virtually overnight."

The Skystar network's video overlay extends the usefulness of First Union's existing business television network. The bank can conduct videoconferences, show training films, and otherwise communicate more effectively with employees.