A moving target: Amid regulatory and competitive uncertainty, an integrated network platform can help service providers prepare for any contingency

The key to success in an ever-changing, competitive industry is to be flexible enough to diversify. Never give the customer a reason to go somewhere else. The telecommunications world is no different: The service provider that can offer its customers only one product or one service risks becoming a relic of the past.

As regulatory boundaries disappear and competition heats up, service providers must focus more than ever on how to become multiservice providers. If they don't, someone else will. This isn't to say that service providers should try to be everything to everyone, but being in a position to offer new, strategic services helps ward off a competitive threat.

In a turbulent industry, flexibility provides power and speed to the incumbent provider for fast customer response, and it allows the new player to move-within economic limits-to the next level and quickly gain and serve customers. This flexibility allows carriers to bundle services to meet specific target market needs.

Although the future of telecommunications may be uncertain, how to prepare for it is not. Integrated network platforms, which can simultaneously handle multiple traffic types, are a cost-effective and flexible way to prepare for the unknown. Telecom equipment that serves only one market segment-local, long-distance, wireless or even data-may no longer be a wise choice.

LATA boundaries disappear To understand how important an integrated network is to the service provider of the 21st century, it is helpful to understand some of the forces at play and their inevitable effect on the industry at large. First, the distinction between local and long-distance most likely will blur-if not completely disappear-in the next five to 10 years.

The issue of local vs. toll gets even more cloudy when the costs of access and local service-expected to be fairly equal in the near future-are factored in. At that point, it will be irrelevant what type of connection is being made or which carrier is providing it. Increasingly, we will find that "a call is a call."

As the distinction between local and long-distance service providers vanishes and as local exchange carriers merge, the need for LATAs likely will disappear. In fact, LATA boundaries are a recent regulatory device begun with the 1984 establishment of separate local and long-distance service providers.

Various public utility commissions are softening their stances on area code overlays-as opposed to area code splits-and it is easy to envision a future in which 10-digit dialing is used for every call. In fact, Maryland already is there.

Further challenging traditional telecom methodology is local number portability, which allows customers to keep their telephone numbers when they switch carriers. While full geographic portability could allow customers to take a phone number anywhere they move in the country, number portability currently is focused on moves within a given local rate center.

When geographic portability does become available, familiar regional area codes may fall by the wayside, although the political and regulatory environment will slow this process. One concern is that service providers that do not yet operate outside their existing LATA boundaries may experience an outflow of numbers.

Whatever happens, changes will have to be made. The telecom infrastructure of North America will evolve to become a series of open, interconnected networks-much like the Internet, which has no boundaries, LATA or otherwise.

Whether artificial LATA boundaries will disappear from a regulatory point of view is uncertain. Their impact on telecom infrastructure and architecture, however, will eventually diminish or disappear altogether.

A future-oriented network As consumer and regulatory trends change, the opportunities to expand into new markets, new geographic areas, new services and new media will be limited only by a service provider's network. Therefore, the first question service providers should ask themselves-and their vendors-is how quickly and cost-effectively their communications network can adapt without disrupting service.

Part of the answer lies with the switch and its ability to adapt to new demands without any global architectural changes or forklift upgrades. Service providers face an uncertain target in planning five or more years ahead, so they need flexibility to move and adjust to uncertain business conditions.

By using a modular switch that supports toll, local, data or wireless and can work in a multivendor network architecture, a carrier can enjoy obvious cost savings and operational efficiencies as well as the robust revenue-generating capability associated with rapid market penetration (Figure 1).

With such an integrated network platform, service providers easily can add feature functionality through software on an as-needed basis. They can implement features across the network without having to change each network element separately.

Never has the need for a single platform been as important to service providers as it is today with the growth of data networking. Data networking overall is on the order of a $40 billion market, which is expected to grow to $60 billion or more within a few years.

The fastest-growing segment of that marketplace is service providers. As service providers look forward to converged voice/data/broadband networks, they must look for help in managing the complexity of it all. A switching platform that offers multiple access options, including ISDN and digital subscriber line along with data services integration-including asynchronous transfer mode, frame relay and modem pooling-will be essential.

It is not enough to offer multiple services on one switching platform, however. By integrating the reliability of the switch with the flexibility of the intelligent network-a standardized, international network of open-interfaced, multivendor hardware and software-service providers have the added ability to create and customize services quickly and easily while minimizing costs. And it is this ability to brand services that will help differentiate service in what is becoming a me-too world of communications providers.

The strength of the intelligent network approach lies in the ability to consolidate data-intensive functions in network elements, relieving the switch of that responsibility. When services are hardwired onto the switch and not based on intelligent network standards, change can become more expensive and time-consuming.

With the intelligent network, the software logic is centrally located on a network server in a service control point rather than distributed across many switches. By eliminating data-intensive administration at every switch in a network, an intelligent network solution enables service providers to deploy new features and add new subscribers to the network in less time and at lower cost.

By providing open interfaces and a standards-based environment, carriers are not at the mercy of any vendor's schedule. Thus, carriers quickly can take advantage of new trends and develop new branded services.

The idea behind the intelligent network is to make raw switching fabric such as ATM the heart of the network and push services as close to the edge as possible. Similarly, when we reach the point where a "call is a call" without regard to location, economics will dictate that features be pushed as close to the customer as possible. In these customer-facing scenarios, unique features, possibly branded, will be integral to market share gains.

Be prepared Opportunities in the telecommunications market are defined by social, economic and competitive trends and can be highly unpredictable.

For example, Internet service providers may be attracted by the higher margins available in the local exchange market and may look to become competitive local exchange carriers. ISPs already are connected to multiple carriers through T-1 lines-why shouldn't they add new types of customers and new services such as voice traffic?

ISPs would need a switch that could handle multiple media, including landline traffic. Of course, the switch would need to be engineered to support the characteristics of data calls-including long holding times and high traffic volumes.

It's worth noting that long-distance providers can turn the tables on the ISPs just as easily by offering Internet service off their existing facilities. Long-distance resellers are multiplying quickly-all it takes is the right switch infrastructure.

To focus on just one piece of the communications puzzle would be a mistake. Today's customer doesn't care about behind-the-scenes network aspects in making a data or long-distance connection.

One only has to look at the dynamics of the Internet to see how this concept already has become a reality. Few customers know or care if an Internet call is local or long-distance when they send e-mail. They just want it to happen-quickly, easily and affordably. And the harsh reality is that if their current service provider can't deliver, they'll find someone who can.

Having the flexibility to immediately serve a new opportunity by making simple adjustments to an existing infrastructure is a powerful weapon for a service provider when competitors start closing in. This, together with sophisticated operations systems and high-bandwidth access and transport networks, will give service providers unprecedented power to turn on a dime as market conditions change.

With more risk and uncertainty than ever, deploying one integrated network that can handle whatever the customer wants is the smartest, most effective way to hit a moving target.

It may be impossible to predict exactly how the communications environment will look in 2005 and beyond, but it's clear the industry is in for some significant changes. Here are a few predictions for the new century:

* Customers get multiple services from a single provider.

* Competition in long-distance increases; long-distance merges with local services.

* Service providers compete for mid- to high-end consumers and medium to large corporations, rather than large multinational corporations or low-end consumers. Service bundling is critical.

* Customers have one access device for multiple services.

* Today's youth fuels change in the workplace, creating new services with integrated voice and data.

* Internet service providers offer local telephony service and resell long-distance over their existing T-1 facilities simply by adding switching capabilities.

* More mergers lead to fewer players providing multiple services.

* Wireless service providers expand their service mix by using a switching platform that supports any media.

* The communications network of 2010 may be a large voice and data network with an asynchronous transfer mode backbone.