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Carriers struggling to cash in on MPLS

By Jim Duffy , Network World , 06/02/2003
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Here are just a few of the drivers behind Coca-Cola Enterprises' decision to roll out what it says - at 600 sites - will be the largest domestic network based on AT&T's Multi-protocol Label Switching technology:

Lower operational expense.

Improved quality of service.

Support for IP telephony.

"MPLS is the reason we did it," says John Ridley, senior enterprise network architect at the $17 billion bottler, which migrated from a 6-year-old AT&T hub-and-spoke frame relay network.

But the Atlanta company is the exception instead of the rule when it comes to enterprise network adoption of MPLS-based services.

Carriers have plowed tens and even hundreds of millions of dollars into MPLS-related network upgrades to help consolidate facilities, slash operational costs and boost service reliability - all of which they say are panning out. But the service providers have been reluctant to aggressively market MPLS-enabled services to existing frame relay customers. Carriers say that service levels, security, reliability and pricing of MPLS-based IP VPNs have turned out to be comparable to that of frame relay - but not better.

Some carriers, such as AT&T, have a delicate balancing act between growing new MPLS-based services without cannibalizing revenue-rich frame relay services.

What’s hot?
Data service 2002 North American revenue (billions) Compounded annual growth rate from 2002–2006
IP VPNs $9.9 17%
Frame relay $9.1 11.7%
ATM $2.3 23%
Click to see:

"It's just a question of where customers want to be," said Rose Klimovich, general manager of Managed Internet Access Services at AT&T, at the recent MPLScon conference in New York. "We're not going to force them to move from frame."

The next generation

MPLS is considered the next-generation carrier infrastructure and service enabler. It is designed to converge multiple networks into one that can accommodate any-to-any meshed connectivity between different access technologies, be they frame relay, IP, ATM, private line, DSL or Ethernet. It also is intended to enhance the performance, reliability and scalability of IP routing, making IP as dependable as ATM for data, voice and video traffic.

Virtually all facilities-based service providers are implementing MPLS in their core networks to improve efficiency and reduce costs. Many also plan to provision services, such as IP VPNs, using MPLS's ability to label packets and flows, and send them across explicit routes segregated from other traffic and networks.

AT&T will complete its next-generation converged IP network in 2005 with MPLS at its core. BellSouth recently announced its MPLS-enabled regional IP backbone, called BRIBVerizonSBC and Qwest also have MPLS buildouts in place or under way, as do Cable & Wireless and MCI.

Coca-Cola Enterprises is the beneficiary of these buildouts. The bottler is connecting its sites in an IETF RFC 2547bis-compliant VPN mesh that's based on AT&T's IP Enabled Frame Relay/ATM service.

RFC 2547bis specifies Layer 3 Border Gateway Protocol-based MPLS VPNs in which routing is usually outsourced to a service provider. And even though IP-enabled frame and ATM services utilize MPLS, observers say they are the same frame that ATM VPN customers have been using, only optimized for IP.

"We are consolidating all of our data centers into one location in Atlanta," Ridley says. "We will now have to support application users all the way from Brussels to Hawaii out of the same data center. To do that, we need to be able to have a consistent end-user experience for those applications, and they're traversing far longer distance than they used to. So we needed a way to control congestion inside the carrier cloud."

The most practical way to do that is with Differentiated Services quality of service (QoS) over an MPLS network, he says.

Coca-Cola Enterprises' network in the U.S. will support ATM and frame relay local access, and regional data centers interconnected via OC-3 ATM virtual circuits. Remote circuits are fractional T-1 and fractional DS-3.

The company's European network was similar to the frame relay network in the U.S., with offices hubbed into the U.K. In Europe, the bottler is migrating to a British Telecom MPLS network with Layer 2 services provided by frame relay instead of ATM, Ridley says.

"There were three or four good reasons for doing this," Ridley says. "We wanted the any-to-any connectivity [MPLS provides]. As we lifted and shifted out of our regional data centers and put things into our central data center, we didn't have to worry about shifting traffic patterns."

The bottler also wanted "end-to-end" QoS to ensure that applications such as Citrix would "survive" as data was transmitted, for example, between Atlanta and Lyon, France, he says. Coca-Cola Enterprises also wanted a network that could evolve to support packet telephony.

"And as time goes on there will be other latency-sensitive applications that come along, like streaming video and audio," Ridley says.

Another company, software maker MoldFlow in Wayland, Mass., switched to an MPLS-based IP VPN after its frame contract was up, though it was the price of the new service rather than the fact it was based on MPLS that grabbed IT Manager Rick Thimble's attention.

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