Dressing up the backbone

Going into last week's CompTel show in Orlando, one might have expected a dour mood considering many of the CLEC and ISP customers roaming the show floor are in dire financial straits and many outside the telecom environment see nothing but storm clouds ahead.

Originally billed as a celebration of the Competitive Telecommunications Association's 20th anniversary, the show instead turned into a tit-for-tat competition among backbone carriers that are expanding their networks and services as fast as regulators and their own technical capacity allow. About a half dozen backbone providers including Sprint, WorldCom and Pathnet announced additional build-outs that would put them into new territories or additional services that would give customers more than just network capacity. Others were openly discussing expansion.

“We certainly haven't seen any let up in demand,” said Shirish Lal, president of Broadwing's broadband services unit, which will be rolling out its first OC-192 links in March.

The shakeout of CLECs on Wall Street combined with a continued bandwidth demand by end customers has given some backbone carriers a new infusion, according to many industry observers. “[Venture capitalists] have concentrated their funding on existing companies,” Lal said. “They did what they had to, which was double down on the best parts of their portfolio.”

At the operational level, backbone carriers are beginning to focus on adding services beyond pure capacity. Pathnet, which earlier this month announced an expansion into the Chicago market, has begun testing a bulk voice-over-IP (VoIP) termination service. The new service, which will be announced later this quarter, will not deviate much from the company's philosophy of providing both long-access and long-haul service to carriers in second- and third-tier markets.

“What's beautiful about this is that it uses our existing network,” said Michael Van Zetta, senior vice president of sales for Pathnet. “As a carrier's carrier though, I now have 7000 [ISP] customers to go after.”

Similarly, Sprint said it would begin offering wholesale customers a VoIP solution and access to its ION product suite. Wrapped into an announcement about the expansion of its wholesale-managed service, the two new elements should hit the market later this year, said Art MacDowell, vice president of Sprint's wholesale services group. “We're trying to go from a transport provider to an application enabler.”

According to Jim Steffens, director of international marketing operations for the global markets group, Sprint's wholesale group won't have any restrictions on the services it can sell from the ION line. “We're currently in the process of defining it, but it's really another distribution channel for us.”

The wholesale play, however, isn't just for traditional backbone carriers. BellSouth made perhaps the most aggressive move last week by launching a $500 million, three-pronged expansion of its wholesale services. The company also has committed to aggressive interval times between ordering and provisioning.

In geographic areas where customers know their bandwidth requirements in advance, BellSouth will pre-provision most of the equipment. Typically, carriers like to have firm orders in hand before committing to such expenses.

“It's much easier for us if we know where the demand is going to be or where we think it's going to be,” said Bill Smith, president of BellSouth interconnection services and chief technology officer of BellSouth.

On an operations level, Sprint will shift 1100 technicians from other areas to concentrate on interconnection services.

“The demand already exists,” said Smith.