Verizon takes a big swing at softswitches: Class 5 replacement project is based on 'economic triggers'

America's Network, Feb 1, 2004 by Joan Engebretson

Verizon's recent move to replace traditional Class 5 central office switches with softswitches from Nortel is the largest, although not the first, such announcement from a U.S. local carrier. But where predecessors Sprint and Qwest have emphasized central office consolidation as a main driver of their softswitch plans, Verizon has a rather different motivation.

"We've identified four economic triggers that led us to put in a softswitch," says Stuart Elby, Verizon vice president of network architecture and enterprise technologies. Those four triggers, he says, are:

* Where there is a high concentration of business users that would support new services such as desktop videoconferencing or hybrid PBX/ Centrex

* Where a CO switch is on a trend to exceed existing capacity or where power or real estate would have to be added

* Where existing equipment is obsolete

* Where the company is installing fiber-to-the-premises and a headend to support it, it will add softswitches to support work-at-home and business applications

Using this strategy, the company initially will not blanket a metro area with softswitches, Elby says. "What you'll see the first year or two will look pretty random, but after two to three years, it will all begin to tie together," he says. Eventually, a single softswitch will be able to support multiple central offices.

Although business customers often devise their own customer premises equipment-based solutions for videoconferencing and PBX applications, Elby says Verizon expects that many such companies will seek to outsource those applications for remote offices and teleworkers.

The letter of agreement with Nortel calls for Verizon to purchase Nortel's Multimedia Communications Portfolio and Succession carrier VoIP solutions. Although VoIP plans relating to this announcement are purely for the business and teleworker markets, Verizon would appear well positioned to use its softswitch architecture to support a residential VoIP over broadband offering outside its original RBOC territory--or to terminate such traffic for other parties. The local infrastructure that came from the GTE side in the Verizon-GTE merger and is scattered nationwide could provide the carrier with an edge there, in much the same way that Sprint's disperse local infrastructure helped it garner a recent VoIP termination deal with Time Warner.

So what are Verizon's plans for VoIP over broadband? Elby declined to provide details, but added, "That's a market you'll hear more from us on."

Verizon's softswitch investment is part of an estimated $2 billion investment that the company will make over the next two years in broadband, which will also include fiber-to-the-premises and the continued growth of the company's Internet protocol- multi-protocol label switched (MPLS) network. A Verizon spokesman emphasized that this $2 billion does not represent an increase in its overall investment level, but rather will be reallocated from funds that would otherwise have been spent on other technologies.