Monday, November 3, 2003

NGN Keynote: The Wireless Wave

"The state of the industry is a getting just a bit better... there's room for optimism," said Sean Maloney, Executive VP and GM of Intel's Communications Group, speaking at a keynote at this year's NGN conference in Boston. Neither the boom nor bust cycle lasts forever, said Maloney, but even when recovery occurs, OPEX pressures will remain. There will be a constant need to do more for less. Intel is betting that a transition to "modular networks" will be among the major changes in the industry. The shift to modular equipment components will be driven by standardization and open technology, leading to new designs in areas such as metro networks and 3G base stations.


But the next big thing is really in broadband wireless. Intel predicts WiFi and WiMax will have an enormous impact on networks in homes, schools, cities, and even remote, rural areas. How big? When it launched its Centrino initiative in March, Intel said it would certify 15,000 hotspots by the end of 2003. The actual number of Centrino hotspots is now expected to be in the 25,000 to 30,000 range. About 50% of the deployments are in Asia. But this is small change compared to what is to come. Between 2003 and 2013 Maloney predicts that the number of installed Wi-Fi access points (public and private) will rise from 8 million to 700 million. He envisions that a similar growth trend in longer distance wireless access will also happen. Wi-Max, which Maloney describes as "the big brother of Wi-Fi", is moving ahead in the standardization process and the large Asian manufacturers are gearing up for mass production.


For unbelievers, Maloney pointed out that many cynics also doubted that camera phones could become a mass phenomenon. In many markets, they are rapidly becoming the defacto standard -- whether we like it or not. Once the tornado starts, second order effects will also appear. For instance, camera phone users in Asia are using their phones as a handheld scanner to read bar codes in stores and then instantly open a browser with further information on the product.


If ubiquitous wireless coverage is a reasonable scenario, what else will change? In a multimedia presentation, Maloney cited examples of new applications. The Harvard Medical School is digitally encoding all of its lectures (including indexing via speech recognition) and making them available to students via the Web. All lectures are available online and can be searched via any key word that may have been used during the presentation. The process of encoding, indexing and posting the material is completely automated, requiring no human intervention. Students with wireless-enabled laptops can access the video server from anywhere on campus.
http://www.convergedigest.com

Intel to Supply 802.16 Chips to Airspan, Aperto

Airspan Networks will base its forthcoming WiMAX equipment on silicon from Intel. The products will conform to the IEEE 802.16 standard. The Airspan products based on this technology are expected to debut in the global marketplace shortly after Intel releases its 802.16 compliant silicon solution, which is currently targeted for the middle of 2004.


Separately, Aperto Networks signed an agreement with Intel to develop equipment built with Intel's IEEE 802.16 compliant silicon scheduled for introduction in the second half of 2004.


The IEEE 802.16a standard was approved in January 2003 for the 2 GHz to 11 GHz frequencies.
http://www.airspan.com

HP to Integrate Packet Design's Route-Analysis into HP OpenView

HP has licensed Packet Design's IP route-analysis technology for integration into the HP OpenView management software suite by early next year. The integration will provide visibility into the routing paths traversed by network traffic, enabling network operators to perform more accurate root-cause analysis of network problems by combining routing-path knowledge with device-status knowledge. HP plans to create extensions that allow Network Node Manager to directly access data gathered by Route Explorer. Beginning in second quarter 2004, HP's worldwide direct sales force and reseller partners will sell the Packet Design software packaged in an HP-branded appliance.
http://www.packetdesign.com

FCC Adopts "Broadcast flag" For Digital TV

The FCC adopted the "broadcast flag" anti-piracy protection measure for digital broadcast television, saying that consumers' ability to make digital copies will not be affected. Under the new order, the FCC permits use of the flag at the discretion of the broadcaster. Equipment capable of receiving DTV signals over-the-air are required to support the broadcast flag requirements by July 1, 2005. Other products such as digital VCRs, DVD players and personal computers that are not built with digital tuners installed are not required to comply with the new rule. In addition, the FCC explained that existing televisions, VCRs, DVD players and related equipment will remain fully functional under the new broadcast flag system. Michael Powell said the decision "strikes a careful balance between content protection and technology innovation in order to promote consumer interests."http://www.fcc.gov

NGN -- Demand: Where Will It Come From?

The first wave of broadband deployment has not been in sync with consumer interest, said Jeffrey Blumenfeld, an attorney with Gray Cary. Blumenfeld, who was part of the original Rhythms NetConnections team (an early DSL network provider in the U.S.) said the basic problem is that the perceived value of broadband is not sufficient for a mass audience to pay for it. He noted that broadband service is already available for most U.S. households, but for most users dial-up is good enough. The market dynamics for business WLANs is similar, said Blumenfeld, because of the same perceived lack of value, as well as ongoing security concerns. However, for WLANs, Blumenfeld believes the killer apps are likely to be audio/video instant messaging. Regarding the telco triple play, Blumenfeld said the ILECs continue to be poor innovators and only reluctantly moved into DSL when the cable modem threat became real.


There is no problem with broadband demand in the U.S., said Roland Van de Meer of COM Ventures. He sees broadband access to be on "a phenomenal growth curve" -- approximately a 30% CAGR over the next few years. About 62% of online U.S. households will be broadband users by 2007. Van de Meer agreed that lower prices will probably not compel users to sign-up for broadband but that new applications will. He noted that the price of delivering a packet on the backbone has been dropping 45-50% per year, but is approaching a stabilization point -- in other words, the price per packet on the backbone will not get much cheaper. The fact is notable, he said, because costs now need to be driven out of other parts of the network. Van de Meer argued that the cable networks have much better economics that the ILECs because DSL costs are still extraordinarily high. As for applications that will drive growth, Van de Meer predicts that DRM technology will catch on and consumers will prefer to buy all their audio & video content online. He also believes consumers and business will pay extra for value-added services like VPNs and security services such as virus protection and spam guards. Regarding the triple play, Van de Meer said the cable companies have the upper hand, although the cable VoIP threat is probably overstated due to wireless substitution.


Network operators need to adopt a distribution model for their business, said Herman Rodler, Senior VP for Solution Management Access for Siemens. Rodler agreed that applications are driving the broadband business, especially peer-to-peer applications and digital cameras. These two applications are also leading to increased bandwidth usage in the upstream direction. Deutsche Telekom has seen rapid DSL growth following the introduction of flat-rate pricing and lower tariffs, proving that there is a very clear price threshold at which broadband demand really takes off. There are now more than 4 million DSL users in Germany. Even after an initial marketing blitz ended, the rapid growth in subscriber numbers has continued because of the viral effect of a successful service. Rodler pointed to Yahoo! BB in Japan, where VoIP has really taken off, and FastWeb in Italy, which is now showing football matches over its DSL network, as other successful cases. Wireless router promotions have also been successful in driving consumer demand. The focus will turn to content distribution services -- bundling video services, e-learning and gaming for targeted consumer markets. Regarding telco triple play, Rodler believes that video services will significantly increase ARPU for the DSL operators. He noted that when Germany had only 200,000 DSL users the Hollywood content providers would not return the phone calls of the network operators. Now that the network has scaled to 4 million, the content companies are knocking on the door.


Predicting market demand has been full of errors and lies, said Howard Anderson, Senior Managing Director of YankeeTek Ventures. Over the past 5 years there has been too much supply for too-little demand. He blames the venture community for excessive investments in telecom. Corporations are now paying as little as $0.01 per minute for long distance. Why bother with new schemes aimed at optimizing voice? Anderson agreed that the growth of residential broadband in the U.S. is real, but said that demand for bandwidth is growing slowly. There is still an over-saturation of supply. New applications are appearing but they are not enough to soak up the excess capacity and as a result capital is not flowing to communications companies. The bottom line, predicts Anderson, is that "the communications industry will suck until at least 2005-06." Regarding telco triple play, Anderson noted that the telcos are notoriously bad at selling content.
http://www.convergedigest.com

NGN 2003: Where the Net is Going Next

The nature of change in the networking business is itself in flux, said Dr. John McQuillan, speaking at the opening of this year's Next Generation Networks conference in Boston. In the past, change was more predictable because network equipment almost became better, faster and cheaper each year. Going forward, this premise may no longer hold true. McQuillan observed that the process of change is now different in four important ways. First, the industry is maturing -- packet switching is 34 years old, email is 32 years old, SONET is 18 years old, and the PC and its major applications are 20 to 25 years old. As a result, market growth for certain networking segments has slowed and in some cases even declined. Second, commoditization and deflation are taking a toll on revenues. For instance, enterprise Ethernet shipments for Q2 fell by 3% from a year earlier and revenue was down by 15%. There are still growth opportunities in networking, but McQuillan noted that many are succeeding by substitution and cannibalization of existing markets. Third, McQuillan argues that IP and Ethernet are fundamentally disruptive and have the habit of making other technologies obsolete --the list includes TDM, FDDI, SONET, Fibre Channel, Class 5 switches, cellular, etc. Fourth, McQuillan believes that the Internet business model itself remains unproven. Meanwhile, traditional providers of telephony face a huge crisis as packet services undercut their margins. Extrapolating from these four trends, McQuillan predicts the industry will need to shift its emphasis from building networks to figuring out how to use them.


Dr. McQuillan is retiring following the conclusion of the NGN conference.


"Bottoms Up" user demand will lead to a metamorphosis in voice communications, said NGN co-chairman Dave Passmore. Instant Messaging, combined with SIP-based collaboration tools, is fundamentally changing the nature of the business and cutting out the telecom middleman. The changes will be profound, said Passmore, as voice becomes just another data network application. The Instant Messaging buddy list becomes the directory. SIP proxy servers could be located anywhere. Ultimately, anybody could become a phone company. So what's the role of telcos going forward? Are they relegated to just being "bit haulers"? Passmore said there are still huge opportunities for telcos to add value to the network, in particular by creating a mediation layer. These opportunities could include: SIP proxy servers, media gateways, directory services, firewalls, IDS/IPS, caching and content distribution, multicast services, location-based services, etc. Whether for wireless coverage or VoIP coverage behind firewalls, islands of connectivity will persist for some time. Some carriers are trying to hinder third-party services by blocking ports on their networks. Though there is potential for "Internet fragmentation," Passmore said the real question will remain whether advanced connectivity services will be provided by telcos themselves or by 3rd parties leveraging the network. He also observed that the disruptive effects of IP are just beginning to intensify. This year may be remembered as "the calm before the storm."http://www.convergedigest.com

Teleglobe to Acquire ITXC

Teleglobe International Holdings announced plans to acquire ITXC, the largest provider of international VoIP wholesale services with direct relationships with carriers in more than 175 countries.
Teleglobe has been a major player in international telecommunications for well over 50 years and ranks among the top five providers of international wholesale voice, data, IP and mobile roaming services. Teleglobe's network reaches more than 240 countries and territories and is physically interconnected to approximately 275 fixed-line telecommunications operators and 360 mobile operators. Teleglobe ranks among the leading wholesale providers of voice, data, IP and mobile roaming services. The merged company will continue to operate under the Teleglobe name and is expected to receive a NASDAQ listing. The combined company's main operations will continue to be located in Montreal (Quebec). Its voice business will be managed from ITXC's current headquarters in Princeton, New Jersey and will also have operations in Reston, Virginia and Montreal. Some highlights of the deal:

  • After the merger, Teleglobe will be one of the top three international voice carriers. The company hopes to improve operational efficiency by the application of ITXC's automated technology to Teleglobe's older back-office processes.


  • Once the transaction is closed, holders of ITXC's common stock will receive common shares of a newly formed parent company of the Teleglobe group of companies, representing approximately 28% of the new Teleglobe parent company.


  • Liam Strong will continue to lead Teleglobe as President and CEO.


  • Tom Evslin, ITXC's current Chairman and CEO, will become non-executive Chairman of the Board of Directors.


  • Cerberus Capital Management, L.P., Teleglobe's current controlling shareholder, will continue to own a majority of Teleglobe


  • ITXC and Teleglobe had revenues on a combined basis for the quarter ended 30-Sept-2003 of approximately USD$286.8 million. The combined company expects to have positive net cash flows by the end of 2004.


  • For Q3 2003, minutes of use on the ITXC network were 949 million, up from 838 million minutes in Q3 2002 and down from 999 million minutes in Q2 2003. Revenue per minute decreased from 8.4 cents in Q2 to 7.9 cents in Q3 2003.
http://www.teleglobe.com
http://www.itxc.net
  • Teleglobe carries approximately 7.4 billion minutes of voice traffic a year, has ownership in 100 worldwide cable networks, and satellite networks and has Internet peering relationships with many of the other major leading international Internet providers.


  • In June 2003, Teleglobe was relaunched as a provider of international voice, wireless roaming, data and Internet services following a corporate restructuring under which TLGB Acquisition LLC, an affiliate of Cerberus Capital Management and TenX Capital Partners, gained control of the company. Since its emergence from bankruptcy, Teleglobe has had positive net cash flows.


  • In May 2002, Teleglobe filed bankruptcy papers with the Ontario Superior Court.


  • On April 24, BCE (Bell Canada Enterprises), Canada's largest communications company, announced that it would cease long-term funding of Teleglobe.


  • ITXC was founded in 1997.

.

Spirent Announces 10-Gig Copper Test

Spirent Communications introduced a 10-Gigabit Ethernet (10GbE) over copper test interface based on 10GBASE-CX4, the IEEE draft standard 802.3ak. The test interface runs on Spirent's SmartBits 10-Gigabit TeraMetrics XENPAK module and can be used to test and deploy 10GbE switches and servers. The new test interface provides automated performance and interoperability testing and provides multiple key measurements such as packet loss, latency, frame sequencing and load balance.
http://www.spirentcom.com

Qwest Creates New Systems Integration Business

Qwest Communications has created a new systems integrator alliances division to focus on collaborating with systems integrators to provide a full range of communications solutions to enterprise customers -- local, state and federal governments, and enterprise business customers. The carrier said the new initiative would position it to respond to systems integrators and their business customers' growing requirements for fully integrated enterprise-wide solutions.
http://www.qwest.com

Level 3 Expands Network in Germany

Level 3 Communications has added Leipzig to its German inter-city network backbone. Other nodes on the German network include Dusseldorf, Hamburg, Berlin, Munich, Cologne, Karlsruhe and Frankfurt. Also, Level 3 has signed new agreements to provide network services out of Leipzig with HL-Komm Telekommunikations GmbH and Primacom AG. Specifically, HL-Komm, a city carrier in Leipzig, has purchased Level 3's (3)CrossRoads Internet access service, and Primacom, a German cable operator, has purchased (3)CrossRoads Internet access and (3)Link Private Line services.
http://www.level3.com

Swisscom/Bluewin Selects IPTV Solution from Microsoft

Swisscom/Bluewin is testing Microsoft's newly announced IPTV solution as a platform for Pay-TV services over an ADSL network. Bluewin, which is Swisscom's broadband services subsidiary, plans to be one of the first companies in Europe and among the first in the world to conduct a trial of pay-TV services over an IP broadband network using Microsoft's IPTV.
http://www.microsoft.com/tv/http://www.swisscom.com
  • In October 2003, Microsoft announced a new technology initiative to develop IPTV solutions based on Windows Media 9 Series encoding technology, which has approximately three times the efficiency of MPEG-2 and twice that of MPEG-4. The Microsoft TV solution also will be designed to support the range of Windows Embedded operating systems for IPTV set-top boxes, including Windows CE .NET. It will also include digital rights management (DRM) technology to help secure content while adding new standards-based service protection to provide higher levels of security for video assets and TV services. Microsoft said its architecture will scale to millions of subscribers through intelligent management of video assets and their delivery. Key partners for Microsoft TV include Harmonic and TANDBERG for real-time video encoding for broadcast and IPTV telecommunications companies; Juniper Networks for its IP-based infrastructure platforms; Intel for computing, communications and consumer electronics devices for the home; Pace Micro Technology for digital TV set-tops; and Thomson for its video technologies, products and services.


  • Other announced carriers testing Microsoft's IPTV include Bell Canada and India's Reliance Infocomm.

TiVo Reaches 1 Million Subscriptions Milestone

TiVo has surpassed the one million subscription milestone ahead of what is expected to be a strong holiday sales season for the company. Michael Ramsay, CEO of TiVo, credited increased growth to both standalone subscriptions and promotions with DIRECTV. Originally offered to consumers in a single set top box, TiVo is now available in a dozen products manufactured by more than eight consumer electronic companies. Toshiba and Pioneer have paired TiVo with DVD. DIRECTV now offers four different integrated tuners with TiVo.
http://www.tivo.com

Data Connection Ships IS-IS Source Code

Data Connection Limited (DCL) released its Intermediate System - Intermediate System (IS-IS) protocol source code solution for network equipment manufacturers. The DC-ISIS portable source code solution implements full mandatory IS-IS protocol support, including ISO 10589 and RFC 1195, together with enhancements including GMPLS and Traffic Engineering extensions, Equal Cost MultiPath (ECMP), HMAC MD5 authentication and domain-wide prefix distribution. The IS-IS source code fits into the same architectural framework as DCL's other IP Routing protocol products (including DC-OSPF and DC-BGP) and can be easily integrated with DC-MPLS to provide a complete control plane solution for TE routers, or can be used on its own or with third-party products.
http://www.dataconnection.com

Avaya and Extreme Networks Form Alliance

Avaya and Extreme Networks announced a multiyear, multimillion-dollar strategic alliance to jointly develop and market converged communications solutions. The alliance combines Avaya's IP-based MultiVantage Communications Applications, converged security and media gateways and servers with Extreme Networks' Ethernet platforms.


Avaya will also resell Extreme Networks' data networking products and will provide comprehensive planning, design, implementation and management services support through Avaya Global Services. Avaya will continue to offer its own line of data networking products and related services and support.


The deal also includes a warrant for Avaya to purchase up to 2.6 million shares of Extreme Networks' common stock at a price of $0.01.
http://www.extremenetworks.com/avayahttp://www.avaya.com/extremenetworks

E2O Unveils 1310 nm-1550 nm Long-Wavelength VCSEL

E2O Communications unveiled an electrically pumped Long Wavelength Vertical Cavity Surface Emitting Laser (LW VCSEL) capable of generating wavelengths from 1270 nm to 1610 nm for LAN, metro, data communications and telecommunications applications. The VCSEL was developed for 10 Gigabit Ethernet, Fiber Channel and other applications in LAN, SAN, MAN and access networks. The company has already demonstrated data transmission using these LW VCSELs at both 10.3 Gbps and 4.25 Gbps on 10km of single mode fiber, at 10.3 Gbps on 100m of 62.5 um core diameter multimode fiber, and at 3.125 Gbps on a 300m of 62.5 um core diameter multimode fiber. E20 said its device is technically mature enough to replace DFB lasers in 10 Gigabit Ethernet applications to support installed base multimode fibers.
http://www.e2oinc.com

Infineon Extends 10 GigE over 300 Meters of Multimode Fiber

Infineon Technologies announced a 10 Gigabit Ethernet (GbE) XPAK-compliant transceiver module capable of operating over 300 meters of low-bandwidth multimode fiber. The XPAK optical transceiver uses a 1310 nm laser with EDC (electronic dispersion compensation) technology to extend the distance over which 10 GbE data can be transmitted error-free. Infineon said its demonstration proves the feasibility of using single-laser transceivers for high-speed transmission over the installed low-bandwidth fiber infrastructure. The EDC technology compensates for dispersion and other impairments that cause inter-symbol interference and performance degradation. Without EDC, end-users need to either deploy high-cost, high-bandwidth multimode fiber to reach 300 meters at 10 Gbps, or use a solution that requires multiplexing four separate lasers of different wavelengths, which results in greater complexity, higher power dissipation, increased costs and reduced reliability. First samples of Infineon's XPAK modules with integrated EDC will be available in the first half of 2004.
http://www.infineon.com/news/

Telecom Italia to Deploy Cisco 10000 Series Broadband Router

Telecom Italia has decided to enlarge its broadband network infrastructure, currently based on Cisco 7513 Routers and Cisco 6400 NAS platforms, with the introduction of the new generation broadband router Cisco 10000 Series. The deployment will allow Telecom Italia to enlarge the number of supported subscribers. It will also be used to provide IP/MPLS broadband aggregation and leased line services. Financial terms were not disclosed.
http://www.cisco.com