ICG mulls voice-over DSL options: Carrier considers retail, wholesale approaches

Attempting to make the transition from a first generation competitive local exchange carrier to a third generation integrated communications provider, ICG Communications is looking to voice-over-DSL service.

But the transition from dial tone provider to an entity centered around packets is filled with big questions, all of which could have multiple correct answers.

Last week, the company took a significant step toward the future by beginning a series of tests with voice-over-DSL gateways and customer premises equipment from CopperCom, Jetstream Communications and TollBridge Technologies. While the Englewood, Colo.-based carrier is looking for the equipment to withstand heavy traffic loads, it's also placing a premium on quality of service.

The carrier expects voice-over-DSL service to have the same quality level as traditional public switched network voice service, said Jon Lowry, senior director of ISP markets for ICG. "I think initially voice over DSL needs to meet the current expectations. It's very easy to retreat from that baseline. It's a lot harder to make up ground later."

Once testing is completed and a vendor is selected, the carrier still will have several unanswered questions. Key among them is whether to approach the market as a wholesale or retail provider, and who will own and operate the voice gateways planned for deployment across the company's network. For ICG, the decision is complicated by its history as a first generation voice CLEC with many Class 5 switches.

"We're not a big data company although we do support a lot of Internet infrastructure," Lowry said. "There's a question as to who owns the gateway. As we go down the road, the business issues will really decide who owns it. Right now, though, it's up in the air."

The company would prefer to own the gateway because it simplifies the management process, Lowry added.

The wholesale approach, which GST Communications and Covad Communications have adopted, doesn't necessarily change the network architecture but changes partnership arrangements. ICG currently is partnering with Covad, Jato Communications and NorthPoint Communications.

"From a technical perspective the pieces of equipment are the same - a Class 5 switch, DSL [access multiplexers] (DSLAMs), integrated access devices and gateways," said Kevin Walsh, vice president of marketing for Accelerated Networks. "The potential problem comes from who owns the integrated access device. It becomes a lot more ambiguous because you have three entities to deal with. Who gets brand identity out of this?"

Initially most providers, particularly data CLECs, are opting for the retail approach. Rochester, N.Y.-based data CLEC Choice One Communications, for example, is in the midst of testing its own voice-over-DSL service with CopperCom, Jetstream and TollBridge in Albany, Syracuse, and Buffalo. And although the company has yet to settle on a single vendor, there is no doubt about its target market - small and medium-sized businesses.

"This technology is ideally positioned to go after that market," said Kevin Dickens, senior vice president of operations and engineering for Choice One. "Being able to package voice and high-speed data is a perfect fit for our target market."

The wholesale approach, he added, may be a good strategy for some business plans, but the starting point is different for second generation CLECs. "We already have the co-locations and the DSLAMs in place, so we look at this technology as a better way to do business," Dickens said.

Those entering the market as wholesale providers also may face some issues from the FCC, which could force carriers to open their DSL networks to competitors.

Regardless of marketing approach, ICG is looking to take advantage of its existing infrastructure and provide lifeline service.

"There are no technology challenges that can't be overcome, but we have to ask, does it look, taste and feel like dial tone today?" Lowry said.