By David Rohde
Network World, 5/05/97

Washington, D.C. - MCI Communications Corp. continues the recent industry trend of higher frame relay port prices with an increase that takes effect Wednesday.

But the carrier is offering a carrot with the stick. MCI is also changing its price structure to encourage users to order backup permanent virtual circuits (PVC) into data centers and connect more of their sites in a mesh topology.

To do this, MCI - the only major carrier that charges for PVCs according to usage - is lowering the minimum usage charge on all of its PVCs to $5 per month.

In such a fashion, users can provision additional PVCs for disaster recovery or separate protocols among data centers and office locations, allowing them to lie dormant until needed, with little financial penalty.

'This will make it easier to deploy more fully meshed networks, which, after all, was the original intention of frame relay,' said Steven Taylor, president of Distributed Networking Associates, a consulting firm based in Greensboro, N.C.

The port charge increase, filed recently with the Federal Communications Commission and set to take effect May 7, is actually MCI's second this year. The first, instituted in February, applied to ports of up to 1,536K bit/sec, but the latest increase goes across-the-board to include MCI's newer high-speed ports.

In fact, those ports are sporting the biggest price hikes in line with another industry trend - the move to ration demand for T-3 and fractional T-3 circuits, which are in short supply (NW, March 31, page 1).

The new PVC usage structure continues an ongoing effort by MCI to simplify its usage-based concept, which has drawn praise from analysts, but has occasionally proved difficult to explain in user negotiations.

MCI now charges 5 1/2 cents per megabyte of traffic sent within a PVC's committed information rate (CIR) and 4 1/2 cents per megabyte for traffic marked discard-eligible. MCI has always maintained a minimum usage fee.

But until now, the $5 minimum only applied to PVCs with CIRs of 16K bit/sec; users reserving higher CIRs were stuck with much higher minimums, such as $65 a month for 256K bit/sec of reserved bandwidth.

This caused a problem, because users that wanted backup PVCs into data centers would reserve PVCs for much lower CIRs than the principal circuit, thus failing to achieve true redundancy, said Todd Bahner, an MCI frame relay product manager.

Bahner added that some users would even set their backup PVCs at zero CIR, meaning all traffic on a backup circuit would be at risk of discard in case of network congestion.

Under the new price structure, users theoretically could ask for a CIR as high as 10M bit/sec and still pay only $5 if the circuit were not used during a particular month.

That is one reason why MCI is raising the port charges, Taylor said. 'Even on your very high-speed ports you're getting usage CIR for $5 a month, so somewhere [MCI has] tohave a little protection,' he said.ca