Industry Responds to FCC Triennial Review Order

Noting that it took the FCC two years to produce the order, Verizon Communications said it needed time to fully consider the implications. Tom Tauke, senior vice president-Public Policy and External Affairs for Verizon, said "the world is changing so fast that the order may already be outdated."


AT&T commended the FCC majority "for keeping its promises to consumers." Robert Quinn, AT&T Vice President for Federal Regulatory Affairs, said the order "will allow AT&T to continue to serve our existing local customers and to follow through with our plans to expand to other markets." However, on the broadband front, AT&T said the FCC simply "surrendered to the wishes of the incumbent telephone monopolies."


MCI applauded the release of the FCC's Triennial Review Order saying the ruling would enable it to continue offering local voice services to consumers nationwide. However, on the broadband front, MCI believes the FCC has jeopardized competition. MCI said it would consider appropriate avenues to reverse "the unfortunate decision restricting competition in the broadband marketplace."


Qwest Communications said the FCC "made the right decision in the area of broadband communications - taking a pro-investment and pro-competitive approach to the deployment of new facilities." However, Qwest "remains disappointed with the majority's decision to allow other companies, notably AT&T and MCI, to continue to use our network at below-cost rates rather than invest in facilities of their own."


The Telecommunications Industry Association (TIA) welcomed the release of the FCC's order, saying that the FCC is right to deregulate new, last-mile broadband facilities on a national basis. TIA said that the removal of serious economic disincentives to nationwide investment in telecommunications networks will result in a greater commitment from the ILECs to invest capital to more effectively compete with cable modem providers. TIA also believes that the broadband deregulation portion of the order has already made a significant contribution to the beginnings of a turnaround in the telecommunications industry.


Voices for Choices, a coalition of associations whose members include the Association for Local Telecommunications Services (ALTS) and the Competitive Telecommunications Association (CompTel), described the FCC announcement as "three steps forward, one step back." The coalition said the final rules are not as surprise because "there's no buried treasure that's just been unearthed."


The California ISP Association (CISPA) called the FCC's line sharing order "an unconstitutional disaster for independent ISPs and their residential and business customers," warning that the policy will force consumers to find another telephone line if they choose DSL service from someone other than their ILEC. CISPA encouraged the California Public Utility Commission to protect CLECs' access to line shared loops based on the powers it has under the FCC's order, and laws already enacted by the California Legislature.


Allegiance Telecom applauded the FCC's implementation of a more granular analysis for local transport and for ensuring that the local loop bottleneck remains accessible by facilities-based competitors using today's technology. However, the company criticized the FCC's denial of access to advanced packet-switching technologies for facilities-based competitors. Allegiance highlighted the lack of competitive choices faced by small and medium-sized enterprises, and encouraged the FCC to reevaluate its decision on broadband to recognize the distinct market differences that exist between the residential market and the small and medium business sector.


The California Association of Competitive Telecommunications Companies (CALTEL) said that the FCC's order supports a "dangerous deregulation of the broadband sector." Monopolies will not lower prices unless forced to by regulators or competitors, and the FCC has now left consumers with neither force in place.

Read More

FCC Commissioners Remain Split over Unbundling Decision

Six months after their contentious 3-to-2 vote on the landmark Triennial Review proceeding, FCC commissioners remained divided over key points of the ruling.


Chairman Michael Powell said he was pleased that the majority made a number of changes to the final UNE-P order that respond to his concern, but that he remains convinced that many of the decisions represent poor public policy and flout the law. In a 17-page dissent, Powell writes that trying to preserve UNE-P switching as a favored means of competition without any meaningful considering of the true social and economic costs will ultimately be bad for consumers.


Commissioner Kevin J. Martin, who was credited with leading the majority vote, described the order as a "balanced approach" that ensures competition and deregulation. In his majority opinion commentary, Martin also insisted that the order is consistent with the statutes and rulings of the courts. Martin believes the order will jumpstart investments in next generation networks, especially in packet technologies and new deployments of fiber to the home. Furthermore, he defended state commissions as the best decision makers on issues regarding UNE-P unbundling and local competition.


Commissioner Kathleen Q. Abernathy said she strongly supports the decision to create a national policy that exempts new broadband investment from unbundling at deeply discounted TELRIC rates. Abernathy expressed disappointment with the decision to "perpetuate the reliance on the UNE-P platform in the face of widespread switch deployments by CLECs." She also dissented with the decision to grandfather all existing line sharing arrangements.


Commissioner Michael J. Copps supported most of the decision, stating that state commissions are best positioned to make determinations about the competitive landscape in their local markets. However, Copps disagreed with the policy of limiting a competitor's access to broadband loop facilities wherever an ILEC has deployed a hybrid copper/fiber loop. He argues that as incumbents deploy fiber anywhere in their loop plants they will be relieved of unbundling obligations necessary for competition to take hold.


Commissioner Jonathan S. Adelstein agreed with the majority opinion on most issues, although he believes the broadband decision provides inconsistent incentives for service providers.
http://www.fcc.gov

Read More

F5 Networks and NetScaler Settle Patent Dispute

F5 Networks and NetScaler settled their patent dispute surrounding F5 Networks' "Cookie Persistence" patent, which enables key capabilities for traffic management and load balancing products. As part of the settlement, F5 and NetScaler will enter into a cross-license agreement where NetScaler will license the F5 Cookie Persistence patent and F5 will license a NetScaler patent. NetScaler will also pay F5 an undisclosed licensing fee.
http://www.netscaler.com
http://www.f5.com

Read More

CIENA Reports Quarterly Revenue of $68.5 Million

CIENA reported quarterly revenue of $68.5 million for the period ending 31-July-03, an increase of 37% from the same period a year ago. CIENA's reported net loss for the period was $88.9 million, or a net loss of $0.20 per share (GAAP). During the quarter, CIENA added seven new customers, including two incumbent carriers. CIENA said its strategic plan is to evolve into a comprehensive network solutions provider, and that to thrive in today's telecom environment, it must get bigger, not smaller. Rather than simply cost-cut its way back to sustainable profitability, CIENA plans to expand its addressable markets while simultaneously reducing and realigning its spending.
http://www.ciena.com

Read More

FCC Releases 576-Page Triennial Review Order

Six months and one day after voting 3-to-2 to adopt a new set of network unbundling rules for incumbent local exchange carriers (ILECs), the FCC released the final rules for its Triennial Review Order. The 576-page document provides rules and regulations to clarify the Telecommunications Act of 1996 and address local phone and broadband competition issues, including previous Unbundled Network Elements (UNE) rules that had been overturned last year by the U.S. Court of Appeals.


Significantly, the order eliminates most unbundling requirements for broadband, with the goal of spurring investment in new networks. It also preserves local competition for switched voice services based on UNEs. A premise of the new FCC framework is that competition is taking place on an intermodal basis -- between wireline providers and providers of services on other networks, such as cable or wireless -- as well as on an intramodal basis between wireline providers.


Some key elements of the order:


Impairment Standard: Under the new rules, a competitive carrier will be considered "impaired" when lack of access to an ILEC network element poses a barrier or barriers to entry, including operational and economic barriers, which are likely to make entry into a market economically unfeasible. The order specifies the types of barriers that should be considered to meet the impairment standard in terms of scale economics, sunk costs, first-mover advantages, absolute cost advantages, and barriers within the control of an ILEC. The FCC will rely on state commissions to take on fact finding responsibilities to implement the statutory goals for certain network elements.


Mass Market Loops: ILECs must unbundle access to stand-alone copper loops and sub-loops for the provision of narrowband and broadband services. Subject to a grandfather provision and a transition period, ILECs do not have to provide unbundled access to the high frequency portion of their loops. ILECs must offer unbundled access to the TDM features of hybrid copper/fiber loops. Similarly, only in fiber loop overbuild situations where the ILEC chooses to retire existing copper loops must the ILEC offer unbundled access to those fiber loops for narrowband service only. ILECs do not have to offer access to greenfield fiber loops or to the packet-switching features of their hybrid loops.


Enterprise Market Loops: ILECs are no longer required to unbundle OCn loops. ILECs must offer unbundled access to dark fiber loops, DS3 loops (limited to 2 loops per requesting carrier per customer location) and DS1 loops except where states have found no impairment.


Subloops: ILECs must offer unbundled access to subloops where necessary to access wiring at or near a multi-tenant customer premise, including the inside wiring subloop of a building.


Network Interface Devices (NIDs): ILECs must offer unbundled network access to NIDs on a standalone basis to requesting carriers.


Dedicated Transport between LEC switches: the FCC finds that requesting carriers are not impaired without access to unbundled OCn transport, but that requesting carriers are impaired without access to dark fiber, DS3 and DS1 transport subject to a granular route-specific review.


Switching for the Enterprise Market (DS1 and up): the FCC finds that CLECs are not impaired without unbundled local circuit switching in the enterprise market. State commissions may rebut this finding based on their local situation.


Switching for Mass Market (DS0s): the FCC finds that CLECs are impaired without unbundled local circuit switching due to operational and economic barriers associated with the ILEC "hot cut" process. State commissions are required to approve an ILEC batch hot cut process or make a detailed finding that such a process is not necessary. The FCC also recognizes that in certain markets competitive impairment may no longer exist. State commissions are asked to apply FCC-defined triggers measuring existing switch deployments in the market. If the states find that there is a competitive impairment they must consider whether it can be cured by requiring unbundled switching on a rolling basis, rather than making unbundled switching available indefinitely.


Shared Transport: the FCC finds that CLECs are impaired without shared transport only to the extent that they are impaired without access to unbundled switching.


Packet Switching: ILECs are not required to unbundle packet switching, including routers and DSLAMs, as an unbundled network element. The order eliminates the current limited requirement for unbundling of packet switching.


Signaling Networks: ILECs are only required to offer unbundled access when a carrier is purchasing unbundled switching. The signaling network element, when available, includes, but is not limited to, signaling links and signaling transfer points (STPs).


Call-Related Databases: When a requesting carrier purchases unbundled access to the ILECs' switching, the ILEC must also offer unbundled access to their call-related databases. When a carrier utilizes its own switches, with the exception of 911 and E911 databases, ILECs are not required to offer unbundled access to call-related databases, including, but not limited to, the Line Information database (LIDB), Toll Free Calling database, Number Portability database, Calling Name (CNAM) database, Operator Services/Directory Assistance databases, and the Advanced Intelligent Network (AIN) database.


OSS Functions: ILECs must offer unbundled access to their operations support systems for qualifying services. OSS consists of pre-ordering, ordering, provisioning, maintenance and repair, and billing functions supported by an ILECs' databases and information. The OSS element also includes access to all loop qualification information contained in any of the ILECs' databases or other records.


TELRIC pricing: The order clarifies two key components of the TELRIC pricing rules to ensure UNE prices send appropriate economic signals to ILECs and CLECs. First, the order clarifies that the risk-adjusted cost of capital used in calculating UNE prices should reflect the risks associated with a competitive market. Second, the order declines to mandate the use of any particular set of asset lives for depreciation, but clarifies that the use of an accelerated depreciation mechanism may present a more accurate method.


Biennial Reviews: the FCC will adopt a biennial review process for these national unbundling rules.


The full 576-page Triennial Review Order is posted online.
http://www.fcc.gov

Read More

CIENA to Acquire Akara for SANs over SONET

CIENA agreed to acquire Akara Corporation, a start-up developing SAN over SONET/SDH solutions, for an aggregate consideration of $45 million consisting of $31 million in cash and $14 million in shares of CIENA common stock. Akara's OUSP 2000 product family multiplexes data center protocols such as Fibre Channel, FICON, ESCON and Gigabit Ethernet in their native formats onto any SONET/SDH (DS3, OC-3/12/48, STM-1/4/16), DWDM or dark fiber network. Akara is based in Ottawa, Canada.
http://www.ciena.com
http://www.akara.com

• In June 2003, Akara introduced a FICON over SONET solution for IBM customers extending XRC over distances beyond 1000 km. The solution combines Akara's OUSP 2000 platform and IBM's TotalStorage Enterprise Storage Server (codename Shark) eXtended Remote Copy (XRC) implementation.



• Akara was co-founded by Solomon Wong, who formerly served with Cambrian Systems (acquired by Nortel Networks); and Stephen Adolph, who previously worked for Nortel Networks. The company is led by Edward Ogonek, who most recently served as executive vice president and general manager at Alcatel Telecom. Prior to Alcatel, Ogonek was EVP of Newbridge's switching and routing group.



• Investors in Akara included Corning Innovation Ventures, Dain Rauscher Wessels Morgan Keegan, Presidio Venture Partners, Sumitomo Corporation, Battery Ventures and Greylock Partners.

Read More

Siemens to Build 5th Global R&D center for Mobile Phones in Brazil

Siemens AG plans to invest more than US$110 million over the next five years to build its fifth global R&D center for Mobile Phones in Manaus, Brazil. Siemens already has R&D facilities for mobile phones in Germany, Denmark, China and the U.S.
http://www.siemens.com

Read More

Bankruptcy Court Confirms MFN/AboveNet Plan of Reorganization

The U.S. bankruptcy court overseeing Metromedia Fiber Network's (MFN's) Chapter 11 case has confirmed the company's plan of reorganization, clearing the way for the company to emerge from bankruptcy protection in early September. MFN recently changed its brand name to AboveNet. Upon emergence from Chapter 11, the company expects to have approximately $70 million in senior bank debt and $73 million in cash by the end of the year.
http://www.mfn.com

• In June 1999, Metromedia Fiber Network agreed to acquire AboveNet Communications in a stock swap valued at about $1.55 billion at the time. AboveNet had co-location facilities in operation in San Jose, California and Vienna, Virginia at the time.

Read More

MPLS/Frame Relay Alliance Approves TDM-over-MPLS

The MPLS/Frame Relay Alliance has approved a new Time Division Multiplexing (TDM)-over-MPLS Implementation Agreement (IA) that enables the delivery of n* 64kps (DS0), T1, E1, E3, T3 or other such private line services over an MPLS network. The new IA may be applied in the design of carrier or Provider Edge (PE) routers, multi-service edge switches and dedicated gateway equipment. The emulation method defines how the PE will map, encapsulate and tunnel TDM private line traffic over MPLS LSPs. Specifically, it defines the emulation of TDM circuits over MPLS Label Switched Paths (LSPs) by using ATM AAL1 encapsulation.


The MPLS/Frame Relay Alliance said service providers could increase their profit margins from existing voice and leased line services by employing a more efficient converged infrastructure. It as described the new Implementation Agreement as an evolutionary application of mature protocols, minimizing learning time and facilitating interworking with standard ATM-based circuit emulation systems.


More information is available online.
http://www.mplsforum.org/tech/tdm_ia_4.0.pdf

• In July, the MPLS/Frame Relay Alliance announced a new project to address FR/ATM service interworking as well as an increased focus on FR/ATM/Ethernet service interworking. These projects align with the results of a June MPLS/Frame Relay industry survey in which more than 200 service providers and vendors identified ATM/Frame Relay/Ethernet Service Interworking as the most important work area for the Alliance.

Read More