Verizon goes national with broadband IP net

Having spent the past two years building out its national broadband IP infrastructure, Verizon says that network will start paying dividends for the carrier and its customers starting this month.

Having spent the past two years building out its national broadband IP infrastructure, Verizon says that network will start paying dividends for the carrier and its customers starting this month.

The network supports Verizon's Enterprise Advance initiative, an effort to attract large businesses, government organizations and educational institutions that require nationwide service. The carrier estimates Enterprise Advance will generate $250 million in revenue this year.

Verizon says the cost of building the network is part of its $12 billion to $13 billion annual capital budget. Analysts have estimated the network cost at $1 billion to $5 billion, a range Verizon neither confirms nor denies.

The Multi-protocol Label Switching-enabled, fully meshed network will let Verizon extend its VPN and transparent LAN services nationally; currently, these are available only within its 29-state region.

The carrier's national IP VPN service also provides the foundation for a managed enterprise VoIP service scheduled to launch later this year.

In addition to the transparent LAN service (TLS), the network will support frame relay and ATM access, plus private-line access for business-class VoIP customers. TLS is a multi-point service in Verizon's metropolitan areas but a point-to-point "Ethernet virtual circuit" offering nationally, compliant with Draft Martini standards, officials at the RBOC say.

Verizon says it will offer quality-of-service, end-to-end management and service-level agreement (SLA) guarantees on these national services. Business-class VoIP will support four classes of service.

The RBOC initially will target these services at its in-region data and voice customers, but has designs on the data customers of interexchange carriers (IXC) AT&T, MCI and Sprint.

Indeed, all the RBOCs covet IXC data turf as they attain approval to offer long-distance services first within and then outside their operating regions. The large enterprise data market represents a $100 billion opportunity for the RBOCs, according to Verizon.

"It's a pretty important announcement for them in terms of winning more enterprise business," says David Parks, a senior analyst at The Yankee Group. "Geographic reach is important because enterprise needs expand beyond one region. It's important in the long-term."

Verizon already offers private-line backup, OC-48 and OC-192 metropolitan SONET and point-to-point Ethernet-over-SONET services to IXC customers, officials say.

Verizon's new national backbone and associated metropolitan and regional networks include more than 200 routers in 56 markets. The backbone's core consists of routers in 13 major cities. The number of points of presence will expand to 65 later this year and to 100 in 2005, Verizon officials say.

"I think Churchill said, 'This isn't the beginning of the end, it's the end of the beginning,'" quips Thomas Nolle, president of consultancy CIMI. "[Verizon has] established focused nodes on a national footprint. That gives them the minimum credentials required to go after enterprise business. But it's pretty clear that they're going to have to partner with somebody to obtain full coverage."

Nolle says the industry scuttlebutt is that Verizon will tap Level 3 Communications for trunks between cities that are not part of the RBOC's core 13. A Verizon spokesman confirmed that the RBOC has a temporary, unannounced, facility-leasing arrangement with Level 3 but that Verizon eventually plans to build its own Enterprise Advance facilities in markets where it does not have them.

Verizon uses Juniper T-series routers in the national backbone, Cisco 12000s in the local-access and transport-area core, and both vendors' gear for the service edge.

In completing its backbone, Verizon joins fellow RBOCs SBC and BellSouth in offering more complete VPN services. SBC last month announced a nationwide network-based VPN offering designed to go directly against data offerings from the IXCs.

The Yankee Group's Parks says SBC's deployment plans for this year and next are more aggressive than Verizon's, which means SBC might be able to serve a greater number of markets faster.

BellSouth announced extensions to a year-old network VPN service targeted at companies with 60% of their locations within BellSouth's nine-state region. The extensions include ATM, Ethernet and tiered DSL access; a turnkey packaging option; intrusion-protection features; improved SLAs; and integration with other BellSouth managed voice and data services.

"BellSouth is more regionally focused," Parks says. "They've got some out-of-region capabilities in place [via gateways and a partnership with Qwest]. But they're still evaluating what type of out-of-region opportunities to pursue."

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Copyright © 2004 IDG Communications, Inc.