Who cares about the killer app? - Communications - broadband to the masses - Statistical Data Included

Electronic News, June 3, 2002 by Shannon Pleasant

There has been much lamenting of the lack of a "killer-app" to drive broadband to the masses.

Story after story bemoans the need for that super application that can parallel caller ID in adoption and revenues for the service providers deploying broadband.

Don't get me wrong, like everyone else, I'm a believer that killer apps can make or break a market, but in the new telecom environment that has emerged over the last 12 months -- capital spending cuts, short-term ROI requirements, etc. -- the requirement for a "killer app" has become much less pressing than the need for "pragmatic apps" that leverage technology already in place, provide incremental revenue and do not require a leap of faith, aka forklift upgrade.

There are two fundamental drivers motivating decisions among end-users and the service providers that sell to them: doing more with less and creating efficiencies that cut costs and add value.

Technology providers have to pursue a new model to create demand for their products. Technology is not enough -- in fact, it is irrelevant. The question to answer is: Can my product help the customer cut costs and create new value? The underlying technology is a nonissue because service providers and end-users are only adopting products that work with what they already have. So, using new technology to create cost advantages and value is exactly what they need as long as it doesn't force a major upgrade or disrupt existing networks and services.

Which brings us back to the pragmatic-app. What kind of applications can technology providers enable that meet all of the criteria laid out above -- cuts costs, leverages technology already in place, adds new value and doesn't disrupt existing networks/services?

Here are two examples of applications that are simple extensions of existing networks and services that offer a compelling value proposition and a short-term return. Integrated access lines that deliver voice and data within the same access facility have become very popular among small/medium-sized businesses and branch offices. In this application, a T1 circuit is configured to carry local telephone, long-distance telephone and data service all on a single pipe.

Traditionally, this combined traffic uses TDM as the transport layer, with static channels being dedicated to either voice or data. This arrangement leads to either underutilization of bandwidth, or correspondingly higher costs to supply additional T1 circuits. Herein lies the opportunity. We have the right formula -- proven application and demand, but there has to be a better way to deliver it to lower costs and generate more revenue.

The answer is to introduce voice over a broadband connection -- DSL for example. The end-user is able to use the existing PBX in place, and using an integrated access device (IAD), a connection is made to the PBX using DSL configured for E&M signaling. The network side of the IAD is connected to an AAL2 permanent virtual circuit (PVC) configured for voice. Individual channel identifiers (CIDs) within the PVC are programmed to carry either local or long-distance traffic. When the PBX goes off hook to place a call, the appropriate CID is selected and the call switched to the proper exchange. A voice gateway sitting behind the broadband network in the service provider central office (CO) transparently carries all trunk signaling and hands off the traffic to the appropriate destination.

The end-result provides many benefits over traditional means for offering integrated voice and data access. For example, data traffic can burst up to higher speeds when voice lines are not in use, making more bandwidth available to the end-user without having to add capacity. Statistical efficiencies of AAL2 offer more bandwidth over the same pipe -- DSOs are not tied up for voice traffic, bandwidth can be assigned dynamically. Long-distance traffic is offloaded and sent to the appropriate service network prior to reaching Class 5 switching facilities, saving the service provider money.

Service providers win because for a minimal investment in gateway hardware they are able to provide a competitive integrated service offering with dramatically improved margins over existing alternatives. End-users gain access to more bandwidth, have less communications infrastructure to manage and benefit from a more competitive service. Voila--we have a pragmatic app.

The availability of low-cost broadband access has enabled small-office and home-office (SOHO) users to gain high-speed, secure access to corporate-based information and data applications through the use of virtual private network (VPN) technology across the public Internet. While VPNs via the public Internet meet the user's data needs, most SOHO users still rely on local PSTN connections for all voice and fax communications, which is costly for the company and does not offer access to corporate voicemail, for example. There is an opportunity to provide remote offices and telecommuters with access to their corporate voice network via their broadband connection that is intuitive and low cost.