Ops Solve One IP Problem, Get Another

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Any doubts that cable operators might have about the
salability of technology supporting IP-voice services are likely to dissipate soon,
although not without being supplanted by another, perhaps more worrisome concern.

The answer to operators' problem: the rollout of
high-capacity, "carrier-class" equipment by a wide range of vendors, including
some that are new to the IP-voice arena. That will answer the question of salability of
the gateway servers used in interfacing Internet-protocol telecommunications with the
circuit-switched domain.

The bad news? Incumbent telcos and CLECs (competitive
local-exchange carriers) represent a driving force behind vendors' plans to introduce big
gateways, ensuring that cable operators will have major competition in the
IP-telecommunications arena.

"We're seeing implementations of gateway servers with
capacity into the high 90s to 125 [DS-0] ports this year, and going well beyond that level
in the future," said Michael Cassin, product manager for IP-voice services at
Concentric Network Corp., a Cupertino, Calif.-based Internet-service provider that is part
of the global InterLine consortium of IP-voice providers.

Cassin added, "We're seeing servers that are starting
to be enabled with the back-end-system APIs [application program interfaces] that are
required for carriers to implement this stuff in networks."

While a handful of incumbent carriers have voiced a
moderate level of interest in IP-telecommunications services, the activity below the
surface signals that a much more aggressive commitment is taking shape throughout the
sector.

For example, AT&T Corp. -- the WorldNet data-services
unit of which has announced plans to test-market IP-voice services in three cities
starting this summer -- is planning a much broader rollout, even before the tests begin.

"We need carrier-class solutions, and they're not easy
to find," said an AT&T source on the carrier side of the business, who asked not
to be named.

As this executive's shopping list suggests, a company the
size of AT&T getting into IP telephony spells not only an emerging need for
large-scale gateway servers, but for mass-scale implementations of administrative and
signaling features that integrate well into the IP-server domain.

Amid ongoing battles with IP-voice providers over the
ground rules for service pricing, the incumbent carriers' fear of being underpriced is
rapidly being superseded by a more immediate concern: the fear of losing a big piece of
high-end business as a result of the merging of IP voice with VPN
(virtual-private-network) data-software functionality.

The ability to feed local-office-circuit voice traffic from
the PBX (private-branch exchange) into the IP VPN allows commercial customers to bypass
the costs of traditional private-line voice networks, while enhancing the overall feature
capabilities of their communications systems, said Glenn Ben-Yosef, president of Clear
Thinking Research, a Boston- based consulting concern.

"Standards-based voice-over-IP is the enabler that
allows existing WAN [wide-area-network] links to work double-duty," Ben-Yosef said.
"Companies can realize significant cost savings by carrying voice/fax traffic over
existing data networks."

Response to the emerging demand for carrier-class gateways
has been widespread among traditional carrier vendors.

For example, Lucent Technologies, which is already in the
market with its own IP-telephony-gateway system, is moving on several other fronts to
support the mounting carrier demand. Lucent is even going so far as to bring out a
128-gigabit-per-second IP switch in the third quarter, with an evolutionary track to
terabit rates built into the design of its back plane.

The supplier's new gateway system incorporates a variety of
large-carrier-specific features with the basic H.323 voice-gateway functions, including
the option to translate circuit signals to either IP or ATM (asynchronous transfer mode),
a signaling gateway that allows SS7 (signaling system 7) to be used in managing IP traffic
and a feature server supporting direct input of advanced-network services into the IP
domain.

Right now, bringing these capabilities into the mix, versus
driving the gateway server itself to very high capacity, is the most important thing that
the market needs, said Jim Simester, the company's product manager for Internet-telephony
solutions.

"Our system supports up to 30 DS-0s
[64-kilobit-per-second voice circuits] per gateway and, on top of that, we support 500 PC
[personal computer] interconnections per gatekeeper zone," Simester said, in
reference to the cluster of gateway servers that can be served by Lucent's point of
centralized-routing address management in the H.323 architecture.

This translates to some 750 circuit gateways per gatekeeper
server, which covers 25 gateways, plus the 500 PC connections, Simester noted.

Carrier interest in IP telephony is stirring development
activity on the part of traditional gateway suppliers, as well.

"We're seeing long-distance and local telephone
companies starting to shift gears and move faster with plans for deployment of
IP-telephony services," said Lior Haramaty, vice president of technical marketing at
VocalTec Communications Ltd., the pioneer in Internet telephony.

"The next-generation telephone companies are taking
advantage of the latest technology advances at a pace that is causing traditional telcos
to realize that they don't have much time if they're going to do something to check these
newcomers," Haramaty said.

Earlier this year, VocalTec and ECI Telecom Ltd. --
Israeli-based vendors serving IP-voice and telecommunications markets, respectively --
said they were teaming up to deliver an Internet-to-PSTN (public service telephone
network) gateway system capable of serving hundreds of lines per platform, enabling
operators to build networks that serve millions of users.

"These new systems must be centrally managed, have
very high reliability, be scaleable to millions of lines, include security and be open and
standards-based," said Doron Ziner, president of VocalTec. "That's our goal and
shared vision of the new public network."

Another leader in IP-gateway technology, Vienna Systems
Corp. of Kanata, Ontario, plans to introduce a 120-port gateway this month, said Kerry
Hawkins, vice president of sales at Vienna.

"We're in the process of building a 1,000-port
gateway," he said, noting that Vienna has an unnamed customer that wants two such
units this summer.

Probably the first implementation of next-generation
IP-telephony gear designed for efficient interfacing with legacy networks involves Delta
Three Inc., one of the pioneer ITSPs (Internet-telephony-service providers), which is now
a subsidiary of international carrier RSL Communications Ltd.

Delta -- which worked with Ericsson Inc. to develop that
company's IP-telephony solution for carriers, known as IPTC -- is now operating the system
in support of international calls between Israel, the U.K. and the U.S., with plans to add
the system to all 19 of the ITSP's POPs (points of presence) in the near future.

"We have an international IP network that allows us to
control latency and other QOS [quality-of-service] parameters," said Noam Bardin,
vice president of technology and operations at Jerusalem-based Delta Three.

This means that with the implementation of carrier-class
gateways, Delta -- working with RSL where Delta doesn't have its IP-network facilities in
place -- will be able to support "everything from electronic commerce, to
videoconferencing, to services making use of video and audio streaming," he added.

While ITSPs like Delta Three remain the drivers behind
Ericsson's play in IP telephony, incumbent carriers are definitely becoming a force, said
Barbara Boyle, global marketing manager for Ericsson.

Along with New Zealand Telecom -- which, at press time, was
set to become the first incumbent to announce use of Ericsson's ITPC -- the vendor sees
strong activity from incumbents in Norway, Finland, Switzerland, Italy, Brazil, China and
"some pockets of the United States," Boyle said.

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