IP fax on the rise: GTE, AT&T unveil new services

While vendors at last week's Internet World in Los Angeles were buzzing about Internet protocol telephony, carriers and Internet service providers appeared to be taking a more deliberate approach to the market by rolling out more proven services.

AT&T unveiled IP gateway services, which provide IP connectivity to AT&T's value-added messaging services, and WorldNet Enhanced Fax Service, a guaranteed-delivery IP fax offering that will use AT&T's Internet backbone.

With the latter, if availability falls below 99.5%, AT&T will refund the $49.95 monthly fee, said Kathleen Earley, vice president of AT&T Networked Commerce Services. "More than anything, customers are telling us they want the same levels of service they get from voice and data networks for their IP solutions."

Businesses will use LAN- and browser-based e-mail systems to access AT&T's services, which use a store-and-forward approach to handle broadcast faxing and redialing, said Kathryn Borg, director of messaging services at AT&T.

Meanwhile, GTE said it will run a three- to six-month trial of IP fax services in four markets. The trial will use NetCentric software to let business users send faxes from their PCs. The carrier plans to run services over its own network using its OC-192 capacity, which should be deployed this summer.

GTE and AT&T are taking different marketing approaches with their IP fax offerings. GTE is emphasizing cost savings by charging 12 cents per page, and it likely willbundle IP fax with other services.

"Product life cycles are diminishing, and that exposes a whole new set of circumstances on your business case," said Chris Brickler, director of enhanced IP services for GTE. "In a year, IP fax could be free."

AT&T's service will cost 19 cents per page plus the monthly service fee, which one analyst interpreted as a signal that AT&T is choosing to compete on quality rather than cost.

"If you want cheap faxing services, you can find them," said Peter Davidson, president of Davidson Consulting. "For the customers AT&T is looking at, price is secondary to quality of service. Because they have control of the backbone infrastructure, they're in a unique position to manage and track fax traffic in a way that an ISP cannot."

CLEC TO USE CIENA DWDM GST Telecommunications, a CLEC serving the Western U.S., will use Ciena's MultiWave 1600 dense wavelength division multiplexing system to expand capacity in a 500-mile stretch of its long-haul network in California. GST also announced service in Portland, Ore. and Boise, Idaho.

AMERITECH SELLS OFF RURAL EXCHANGES Independent telco Century Communications will purchase 19 Wisconsin exchanges, serving 85,000 lines, from Ameritech. The rural exchanges are adjacent to Century's existing operations.

Competitive local exchange carrier ICG Communications last week announced plans to make voice service available to more than 90% of the U.S. using the Internet protocol-based network it acquired when it purchased Netcom On-Line Communication Services. For calls between locations served by Netcom, users will pay 5.9 cents a minute. The per-minute rate for calls to locations not served by Netcom will be 7.2 cents.

Service will be rolled out in stages, probably starting with San Jose and Denver in the first half of this year and expanding to 166 locations by the end of 1998, said ICG President and CEO Shelby Bryan. Initially, the service will be offered only to Netcom and ICG customers, but the company plans to expand availability, said Bryan.

ICG is adding IP telephony gateways-supplied by Lucent Technologies and Cisco Systems-to Netcom's 238 points of presence. Although downplayed at the time, the IP offering was part of ICG's plan for Netcom when it acquired the company, said Bryan.

Despite ongoing questions about IP telephony voice quality, analysts are optimistic about offerings such as ICG's. "People have proved they will often settle for lower quality at a lower price," said Judy Reed Smith, CEO of consulting firm Atlantic-ACM, citing the example of MCI's early network.

Some IP telephony network operators route traffic onto a conventional circuit-switched network when IP network congestion threatens call quality. But Bryan said ICG's approach is to make plenty of fiber available on the Netcom network and to ensure that traffic never leaves that network, except to and from the local telco at each end of the call.

"Given current technology, the best quality call will be one going over a privately managed IP network," said Richard Sewell, senior manager for Arthur Andersen's Global Communications and Entertainment Group.