DSL

Delivering Small Business VoDSL

We find several examples where CLECs and ISPs serving small businesses can do more for less by employing voice over DSL (VoDSL) technology. However, beware of the local phone company.

by Lynn Haber of CrossNodes, an EarthWeb site [December 28, 2001]

Two years ago, Digital Design Inc., a value-added reseller, was one of the first users of Voice over DSL (VoDSL) technology in the nation. Today, VoDSL continues to provide the Las Vegas, Nevada-based VAR with a cost-effective solution for data and voice communications, in addition to providing the infrastructure that helps the company grow its business.

A small operation, in business since 1983, Digital Design designs, installs, and manages computer networks, primarily for truck dealerships. The company also offers business software solutions, intelligent report generation, marketing, Web design, and technical support. While VoDSL technology originally provided Digital Design a solution to its data line needs, company president Fred McCormick has since used the VoDSL infrastructure to generate new service offerings for his customers, such as the ability to link several branch offices over the Internet for about $20 per line compared to $1,200 per line for data lines.

"Once you learn the [VoDSL] technology, the possibilities are endless," says McCormick.

What is VoDSL?
VoDSL utilizes broadband access solutions in the existing DSL network to extend multi-line local telephone service off of a centralized switch. This architecture enables one copper twisted pair (a single telephone line) to become multiple lines capable of carrying voice and data traffic. More simply, VoDSL destroys the concept of a single logical line per single physical line.

The beauty of VoDSL is in its simplicity and ease of deployment, because it allows service providers to utilize the existing copper infrastructure. A special piece of equipment, called an Integrated Access Device (IAD), is needed at the customer premise, and a DSL Access Multiplexer (DSLAM) must be installed at telephone central office, or switch. The drawback of VoDSL, like DSL, is that customers must be within three miles, or about 15,000 to 18,000 feet, of the local switch (although this may change in 2002).

CLECs are viable
Two years ago, VoDSL was an emerging technology that promised to bring new economies to the provisioning of voice and data services to small- and medium-size businesses. While this basic premise still exists today, the small number of competitive local exchange carriers (CLECs) who offer VoDSL aren't touting it as a cost saving strategy for the customer but rather are deploying VoDSL as a service strategy to keep themselves viable.

"The only reason that vendors are deploying it is to keep themselves afloat," says Mike Guertin, associate consultant at Telechoice Inc., a consultancy based in Denver, Colo.

The ability to utilize the copper infrastructure, coupled with advances in technology such as the ability to take a single copper pair and offer up to 24 separate voice channels and high-speed Internet access, makes the economics of voice and data service offerings at the local level a potentially profitable business venture for the CLECs.

Just a couple of years ago, many communication service providers were talking about deploying VoDSL, and were running trials. Today, the number of providers with VoDSL offerings can be counted on one hand.

"We've been seeing the competition going away," says Kevin Teeters, vice president of product management at Mpower Communications Corp., Rochester, N.Y. "I don't see CLECs making the technology investments," he adds. Formerly MGC Communications Inc., Mpower of Las Vegas, Nev. was among the first vendors to offer VoDSL and counts Digital Design among its customers.

Growth in the DSL sector has been slow, according to Guertin, and having the ability to deploy services cheaper is a key strategy for CLEC survival. Teeters says that vendors can't make money on DSL alone and have to offer voice. "But a lot of DSL providers don't understand this," he says.

Apparently, Broadview Networks, based in New York City, does. VoDSL is part of a mix of bundled data, Internet, and voice services offered by the company, which was founded in 1996. Since turning up its VoDSL service in July, Broadview has over 200 customers and over 2,000 VoDSL lines, according to Brian Hurley, vice president of technology at Broadview. The company offers the service in NYC, Long Island, upstate New York, Boston, and Philadelphia.

The VoDSL service supports three speeds: 384 Kbps, 768 Kbps, and 1.5 Mbps. Hurley hopes to offer even higher speeds in the future. The vast majority of customers, mostly small- and medium-size businesses, reportedly opt for the 384 Kbps service and have an average of six lines. "These customers are looking for higher speed Internet access and use the service for email, as well," he says. Customers using the higher speed service tend to focus on applications or file transfer, he adds.

On average, customers save about 25 percent off the total service bundle compared with buying voice and data components separately, according to Broadview.

Mostly used as a sales office for its West Coast parent company Jessica Corp., the office's on-again/off-again telephony service and Internet service left company sales reps in the lurch, says Sollod. The telco claimed there was construction going on in the area near the central office switch, disrupting service.

The Broadview service costs about $700 per month, all computers have DSL, and the company has nine telephone lines and one fax line. "All we had to do was buy a router and some additional wiring," says Sollod, "which cost about two hundred dollars. It took a couple of months to make the transition from one communications provider to another."

Done Deal was paying close to $600 for its dialup service from its previous provider. "We had dialup Internet which was always going down and for about the last six months customer service wasn't even picking up the phones," he says.

Today, Sollod says service is consistent and reliable. Internet availability means that the sales staff is able to spend more time at their desks, making sales and having quick access to the information they need.

Choice One Communications Inc., Rochester, N.Y. is one other CLEC using VoDSL technology. The company has VoDSL capability in eight markets but is only officially deployed in two markets (Rochester, N.Y. and Scranton, Pa.), according to Jim Jones, manager of data product development at Choice One. The company is still working on blending the voice and data sides of the house into a process flow that's efficient.

"For us, VoDSL is a service strategy and a cost savings strategy for us. Where we can, we try to pass savings onto the customer," Jones says. Typically, bundled services from Choice One are about 30 percent cheaper than those from the incumbent telephony provider, he adds.

While industry participants agree that VoDSL is a broadband technology suitable for prime time, the market has not lived up to its potential primarily because the DSL market is controlled by the local incumbent telephony providers. Until the big boys decide to play ball, perhaps to alleviate a shortage of copper lines to businesses and homes, expect the VoDSL market to remain small.

—End