Upstart carrier keys on convergence

TAMPA, FLA. - 2nd Century Communications wants to win your business away from the local monopoly phone company - and not by just undercutting prices.

The start-up wants to offer a raft of services, all over a single connection to the customer site. These services will include Internet access, e-mail, Web hosting, local and long-distance phone service, unified messaging, virtual private networks and network-based applications.

To deliver these converged services, the carrier is banking on a new breed of equipment and suppliers. Unlike existing carriers, 2nd Century has the luxury of being able to start from scratch with the latest and greatest technology.

The carrier is also purchasing network elements, such as long-distance trunks, local T-1 access lines and a voice signaling network, from other providers.

Using this combination of network facilities and equipment is the best way to build a competitive local exchange carrier (CLEC) network that will remain viable even after the regional Bell operating companies start selling long-distance services, says 2nd Century Chairman Mike Viren.

Viren, a former economics professor and ex-head of strategic planning for frame relay carrier Intermedia Communications, says the key to 2nd Century's success will be the company's use of ATM in the local loop.

The link between a customer location and the phone company is the most expensive in any phone network, Viren says. ATM can make local-loop bandwidth usage more cost-efficient by cutting up each link between a carrier and its customers into virtual circuits that support separate qualities of service and don't waste any bandwidth.

IP does offer class of service, but you still need to throw extra bandwidth at your traffic to guarantee a certain level of delay. And that can get expensive, Viren says.

"I really need to sell all my bandwidth in the local loop and even oversubscribe it," Viren says.

The 2nd Century network design calls for a server at the customer site that consolidates traffic from LANs, phones and other sources, and then converts it to ATM for transport across a T-1. The company is considering gear from newcomers such as Mariposa, Woodwind and Praxon.

The traffic will then be collected by an ATM concentrator/switch located in a 2nd Century point of presence, perhaps in the local switching office of an RBOC. That device takes in multiple T-1s, sorts traffic by type and passes it along. Start-ups Convergent Communications and Tachion are among contenders to provide these switches.

The concentrator/switches have time-division multiplexing ports for carrying voice traffic to traditional local and long-distance voice networks, and IP ports for Internet traffic.

Viren says 2nd Century can make money using this network model with as few as 125 customers per switch.

That's because the switches cost only one-tenth as much as traditional voice switches.

"We get revenue right away, and that cash flow leads to profitability sooner," Viren says.

One switch means one operations and support system (OSS) to gather data about traffic for billing - one of the more complicated aspects of being a service provider.

The more different types of switches there are in a network, the tougher it is to handle OSS, Viren says.

Traditional carriers, including some CLECs, require voice switches, frame relay switches and large routers.

They also need a separate signaling network to complete voice calls to customers of the established phone carriers.

"That's expensive. That's too many protocols," Viren says. "I need to choose one and put all my traffic on that."

2nd Century plans a two-year rollout of services in 50 cities in 40 states starting in October.

2nd Century: (813) 935-8866 or www.2c2.com