The new Frame Relay: ILEC opportunities

Virtual private LAN service (VPLS) is poised to replace Frame Relay as the dominant enterprise private data communications service. Until recently, Frame Relay was well suited for internal data communications among enterprise sites.

It uses T-1 private lines that are nearly ubiquitous for access, while regional, national and international connectivity is provided over a carrier's ATM network facilities, which possess effective traffic management and network recovery capabilities.

In addition, Frame Relay service is both dependable and secure, because it employs virtual circuits: switched Layer 2 service. Frame Relay circuits are dependable for two reasons: Packet transport times are much more consistent on a switched circuit compared to routed packets and the bandwidth assigned to the virtual circuit is guaranteed by ATM's rigorous QoS mechanisms. The same ATM virtual circuit mechanisms provide high network security levels.

Paradoxically, it is Frame Relay's reliance on T-1 and ATM that is driving Frame Relay toward obsolescence and VPLS to take its place.

The Migration Path

VPLS, also called MPLS VPN and Layer 2 VPN, provides an attractive migration path for Frame Relay subscribers, because it retains Frame Relay's attractive features while overcoming its limitations.

VPLS is a switched service, like Frame Relay, so performance is predictable and a combination of Ethernet and MPLS QoS capabilities can be used to offer guarantees on availability, latency, jitter and throughput. Security and privacy also are assured through Ethernet's VLAN capabilities and MPLS's virtual routing and forwarding features.

VPLS goes beyond Frame Relay's capabilities by supporting easily reconfigured user interface speeds ranging from megabits to gigabits and more flexible, reliable transport across the MPLS core network. Transport across the core uses label switching that eliminates Frame Relay's requirement for predefined connectivity to each networked location.

The labeling feature also permits flexible classification of traffic priorities. This is simpler and quicker than today's practice of dedicating a Frame Relay PVC for high-priority traffic.

Finally, VPLS features inter-working with legacy protocols such as Frame Relay, which eliminates the need to change out the network.

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Enterprise Approval

VPLS is especially attractive to enterprises that buy into IP convergence and plan to adopt VoIP, prioritize data traffic and need more than 1.5-Mbps data rates for many of their sites. This profile fits most enterprises.

VPLS, however, is not the only option that enterprises have when considering network modernization. Frame Relay should continue to be a secure, reliable, attractively priced option for enterprises that use their private networks primarily (or exclusively) for transaction processing, since these applications are not bandwidth intensive but are highly sensitive to latency. End-to-end response time is critical and client/server processing usually consumes most of the response time budget.

Users looking for higher speed bandwidth will find DSL and cable modem access coupled to Layer-3 VPNs much more affordable and nearly as secure.

Opportunities for ILECS

Ironically VPLS finally provides an important vehicle for large ILECs (e.g., SBC and Verizon) to crack the Fortune 500 data communications market just as they are buying their way in through acquisition of AT&T and MCI. The IXCs control approximately 90 percent of this business because they provide comprehensive national and international coverage for Frame Relay.

Until recently even large ILECs couldn't attract Fortune 500 business, because they lacked nationwide coverage and graceful migration strategies from Frame Relay to other services were not available. VPLS changes this because SBC, Verizon and others have now deployed nationwide MPLS core networks, and VPLS does not require wholesale change-out of all enterprise CPE. It only requires that the customer premises router provide the proper classification of data priorities, which is a common feature on most routers.

For the first time, ILECs have a viable alternative to IXC Frame Relay service and are better positioned financially than IXCs to exploit this opportunity.

Though Frame Relay, like most incumbents, will give ground slowly to the new VPLS newcomer, the end result seems to be clear: It will benefit enterprise customers and help the large ILECs consolidate their control of the U.S. telecom marketplace.

Michael Kennedy is co-founder and managing partner of Network Strategy Partners, LLC. ([email protected])

COPYRIGHT 2005 Horizon House Publications, Inc.
COPYRIGHT 2005 Gale Group