Government efforts to speed economic recovery and minimize the threat of terrorism could lead to the most significant upgrade of the nation's telecommunications network in a quarter-century, industry experts said.
Government efforts to speed economic recovery and minimize the threat of terrorism could lead to the most significant upgrade of the nations telecommunications network in a quarter-century, industry experts said.
While the revamp of the public switched telephone network (PSTN) to handle IP communications has made middling progress in recent years, incumbent carriers that have paid for traditional switches have been reluctant to replace a cash cow with a costly new technology.
Now, however, security concerns and possible government incentives could incite a major transition to powerful new IP softswitches, possibly as early as next year.
"Things like this dont happen very often," said Van Phung, Siemens Carrier Networks chief architect and head of product line management. "Were talking about a new infrastructure for new services. The last time something like this happened was 75 or 76, when the networks switched from analog to digital switches, and it changed the landscape for telecommunications. We see the same opportunity here."
Siemens is one of several companies angling for the inside track of what most analysts think will be a multibillion-dollar opportunity to upgrade telecommunications networks.
CommWorks, of Mount Prospect, Ill., is one of the three largest providers of Internet telephony equipment, according to market research firm DellOro Group. The day before terrorists struck in New York City, Pennsylvania and Washington, D.C., CommWorks announced that it had carried more than 3 billion minutes of voice traffic for service providers around the world.
Carriers in Asia, Europe and North America are using CommWorks media gateways and softswitch elements to shift voice traffic from the circuit-switched telephone network to more efficient IP networks, and to introduce new and enhanced telephony services to their customers.
"The fact that some of the worlds most recognized telecommunications providers continue to add more voice traffic to their IP infrastructures is a strong endorsement of our IP telephony technology," said Houman Modarres, CommWorks director of softswitch product management. "Our equipment is delivering voice quality, reliability and performance on a par with - and often better than - the traditional circuit-switched telephone network."
The softswitch technology used in the new IP networks offers greater survivability in the event of a terrorist attack because it allows multiple backups. The terrorist strike on the World Trade Center showed the vulnerability of central offices in a traditional network, Siemens Phung said.
Security is taking center stage, as members of the U.S. Telecom Association gather for its annual meeting in Scottsdale, Ariz., on Monday, Oct. 8. The USTA is the trade organization representing incumbent carriers, including the regional Bells.
"In the past weeks, the nation has witnessed a profound reminder of the importance of the U.S. telecommunications infrastructure to a strong, secure America," said Walter B. McCormick Jr., president of the USTA. "As the nation prepares for war, we need to ensure that we can continue to keep this promise to America. So security and the lessons learned on Sept. 11 will be a major focus of this years convention."
Along with the security concerns, incentives to upgrade could come in the form of tax breaks or outright subsidies, such as those provided for rural carriers, Phung said.
Joseph P. Nacchio, chairman and CEO of Qwest Communications International, told a Senate committee that the nations telecommunications networks are strong, but the administration and Congress should take additional steps to protect the security of all of the U.S. critical public and private network facilities.
Nacchio, who also serves as vice chairman of the National Security Telecommunications Advisory Committee, testified before the Senate Committee on Governmental Affairs, which conducted a hearing on the protection of critical infrastructure - such as the telecommunications network - from physical and cyberattacks.
"Companies and the public sector can jump-start their efforts. The NSTAC and the National Security Council should immediately initiate a project to develop benchmarks and requirements for Information Security Best Practices for the telecommunications industry," Nacchio said.
In a report to the White House this year, the NSTACs Convergence Task Force pointed out that the current state of transition between traditional and IP networks leaves the PSTN vulnerable to attack. The solution could lie in a more rapid movement to upgrade with strengthened firewalls to prevent terrorists or others from accessing sensitive information through the phone system, experts said.
"The unreliability of existing gateway screening capabilities, the lack of security guidelines for interconnection, and the lack of control and authentication mechanisms for network management traffic are all matters requiring further attention," the CTF report said.
In previous reports, the NSTAC said that the resilient features of the PSTN and the diverse architecture of the Internet made it unlikely that any single point of failure would cause a regional or national network disruption in either infrastructure. But in the 2001 report, the CTF backed off that assumption.
The CTF said it "recognizes a fundamental change in the emerging public network, wherein network vulnerabilities and possible points of failure could impact service availability and reliability, rather than creating network component failures.
"Services such as Voice-over-IP and bandwidth reservation capabilities could be essential to [national security/emergency preparedness] operations in the future, and subsequently could be impacted by packet network weaknesses. Therefore, the government should not become reliant on nascent IP services without thoroughly analyzing their potential vulnerabilities."
While the telecommunications carriers could develop major revenue streams from upgrades to IP networks, they could also see other opportunities in the wake of the terrorist attacks.
Michael Howard, telecom research firm Infonetics Researchs principal analyst, said companies that offer business services can convince a lot of enterprises to let them take over the operation of the network. AT&T Business Services was able to restore service to dozens of lower Manhattan businesses in a few hours because its staff knew the networks so well.
"Larger companies are going to spend more in these areas," Howard said. "As the Internet grows at some 200 percent a year, service providers must buy equipment to keep up. But until the capital markets show confidence in telecom, there wont be money to borrow to make the upgrades."
That puts regional Bells and other established local exchange carriers that have guaranteed sources of monthly revenue at a huge advantage.
The bold service providers have a real opportunity, while the faint-of-heart have no chance, said Deb Mielke, Treillage Network Strategies principal analyst.
"There is a big opportunity for collaborative technologies," Mielke said. "It didnt take off in the past because it required specialized rooms, but with newer innovations and peer-to-peer networking, videoconferencing has a chance to take off."
But only if service providers take some risks. "When everyone else is scared, thats your chance to dominate with collaborative technologies and security," Mielke said. "Were all creatures of habit, and this is the time to make this a routine way of doing business. In scary times, you have to stick your neck out to make it happen. This is a tremendous up time for carriers willing to take that calculated risk."