Buzz roundtable: Integrated access services, 09/27/99

Integrated access services

Network World Fusion, 09/27/99

Let's shift gears again to integrated access services, meaning things like Sprint's ION and AT&T's INC, which enable you to pool various kinds of traffic over a single access line. They stop short of offering true integration because voice, frame relay and Internet traffic each goes its own way once it gets to the carrier's central office. Do you see much to get excited about when it comes to these services?

Bradner: If you believe that people want to have a phone jack on the side of their data modem so that their teenage daughter can use the telephone, sure. That certainly is the fundamental model that the telephone companies have. It's not the one that's proven successful for DSL, for example, in the data market.

Nolle: Integration, whether you're talking about access integration or transport integration, is really only an indirect user issue. Integrated access as in the case of ION, INC and [MCI WorldCom's] On-Net - all of those strategies are really directed by the service provider at achieving account control in a user environment. They're not anything that a user is particularly valuing, nor are most of the service provider planners naive enough to think they can make the user value it. The user doesn't care whether Tinkerbell carries his packets on little tiny silver wings.The only thing they care about is price and the service guarantees. The same thing is true with integrated transport. For us to sit back and say this is not a really converged network because it doesn't meet the following criteria, begs the question, why would the buyer care if it was a converged network? What's the intrinsic value of convergence to the user?

That isn't to say that integrated access isn't useful. Integrated access strategies like ION and INC and so forth offer one benefit to the buyer indirectly. By justifying the service providers' over-provisioning of access bandwidth, they allow the user to acquire a tactical service like a data service without the provisioning delays that would ordinarily be associated with running access lines.

So what's the upshot – are these integrated access services a good thing for users or not?

Bradner: They're irrelevant to users. Users are looking for price/performance and functionality. You can put that combination together with an integrated package, maybe you can change response time, that's great. Maybe you've changed the price, that's great. But if you do it with two separate wires or do it with one wire, what's the difference?

Nolle: I had specifically criticized all of these strategies in a column I did for Network World and the basis of my criticism was to say pretty much that, which was that either this is nothing more than a pricing play, in which case we don't need to understand its technology, we only need to understand its cost. Or it's aimed at providing more flexible data services, in which case it's incumbent on the carriers like Sprint, MCI and AT&T to give us some kind of an indication of what sort of tactical services are going to be available over this access bandwidth.

Bradner: None of them have done that and they give no indication of doing it. I'm certainly not going to hold my breath for Bell Atlantic to do it.

Kobielus: If integrated access services bring down the cost of provisioning and speed up the time to provision a new circuit or service for the customer, this is ultimately good for the customer. What it does in a very competitive environment like telecommunications is it brings down the general cost structure for providing these services. Let's say one carrier brings out an integrated access service and the service significantly reduces the carrier's cost structure. Then that carrier will pocket a fairly tidy profit initially but then as other carriers come along and duplicate this service, they're all going to theoretically experience significantly lower cost structures providing this service. Ultimately, with competition, that's going to bring the price to the customer down.

Bradner: You're making an assumption that I don't agree with. I do not assume that an integrated system, as provided by a Baby Bell, will show any significant cost savings.

Kobielus: It'll show cost savings to the customer when there's enough competition in a given market that carriers can compete and bring the price to the customer down.

Bradner: I don't see why the integration makes any difference to that.

Kobielus: You're denying that integration of circuits and services and equipment in the back-end network can bring down costs for the carrier?

Bradner: I don't believe carriers will integrate most of the equipment in the backbone network for a very long time to come, if ever.