Beyond high-speed internet: by leveraging the single ATM VC architecture commonly associated with DSL, operators can cost-effectively offer QoS on IP-based services

Telecommunications International, Nov, 2004 by Steven Gleave

It's no surprise that carrier revenues are under fire. Wireless substitution, VoIP service providers, and commodity pricing of long-distance and international calls are all contributing to the decline of traditional voice service revenues. Yankee Group predicts that voice revenues worldwide will decline by more than US$30 bn in the next few years. That revenue, in all likelihood, will be lost forever.

There is an imperative for carriers, therefore, to derive revenue from new services. But as carriers survey their networks, one thing becomes clear: innovation, services and new applications will come from the data network and not from TDM infrastructure.

For consumers around the world, DSL continues to be the primary technology used for broadband access. After a combined multi-billion dollar network buildout, the world will surpass 100 million DSL subscribers in early 2005. This is a tremendous success on many levels but, for service providers, there is a downside. DSL continues to support only a single revenue-generating application: high-speed internet. And that application is quickly becoming a commodity.

Point Topic reports that the average cost of a high-speed internet access service worldwide has started to decline as subscribers realise that services are basically undifferentiated. While carriers may try to offer different speeds and tiers, the reality is that high-speed internet is high-speed internet.

IP, however, has proven to be a robust protocol for enabling users to reach third-party applications and services on the internet. The proliferation of websites providing subscription-based content has ballooned. Even so, the internet is still far from realising its potential to fundamentally change consumer buying patterns and trends.

Online shopping for goods has become mainstream, but as digital rights management for online content are resolved, real-time services stand to be the next huge wave of revenue opportunities. IP-based services for video-on-demand, voice and streaming video are on the verge of revolutionising their traditional alternatives (TDM voice, DVD/movie rentals).

Companies like MovieLink and CinemaNow offer the same selection as the local video store yet downloaded to the home in about an hour. Operators across Europe are also deploying streaming broadcast video services over existing DSL networks; the IP network, arguably, will become the premiere delivery mechanism for applications around the world.

Nearly all experts agree that, in coming years, the value of goods and services delivered over IP networks will far exceed the value of simply providing basic access. Signs of this trend are already apparent in that service providers have been under constant pressure to reduce the monthly recurring service fee for basic high-speed internet access.

The single ATM VC

The first step for service providers to capture additional revenues is to provide differentiated services over the plain old DSL (PODSL) network. Operators must have an infrastructure that enables them to provide better than best-effort IP services.

The single ATM virtual circuit (VC) design of most PODSL networks is one of the key inhibitors for the delivery of new applications. A single VC severely limits the capabilities of the service provider to offer differing classes of service and consequently the ability to charge for new services. The DSL network, after all, was initially designed simply to provide oversubscribed, best-effort high-speed internet access.

The carrier, therefore, has two choices if it wants to provide new services: up-grade to a new network or retro-fit the existing network.

Carriers today are certainly upgrading the existing network; fibre-to-the-neighborhood/kerb/home is a significant priority these days. But upgrading the access network to provide significantly more bandwidth is very costly. Matt Bross, CTO of BT, was asked at the recent Carrier World Conference in London what the cost would be to provide more than 20Mbps service to subscribers. He replied: "I know what [the costs] look like but I'm not going to share them. They'd only get printed and scare investors."

While investment in a next-generation access network is inevitable, it is also costly and time consuming. Therefore, the strategy of retrofitting the current access network to provide quality of service guarantees needed for real-time services--such as VoIP and video--is a practical one.

The Bezeq strategy

Bezeq, the incumbent telecom supplier in Israel, is currently faced with increasing competition from local cable operators. To counter the threat, Bezeq moved to upgrade the capabilities of its existing DSL network to deliver enhanced internet services and stream video services. The ATM infrastructure and CPE equipment dictated that Bezeq needed to deliver these services over the single ATM architecture that is common with DSL networks installed worldwide.

"Bezeq thought of deploying multiple VCs per customer but the cost was not practical and the installed base of USB modems support a single VC," says Shachar Levi, CTO of Koltel, the technical consulting firm working with Bezeq to develop the new system architecture.