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US 2002 Next Generation Networks
February 2002 ABSTRACT The telephony industry, comprising voice, data and Internet services has undergone revolutionary changes, especially driven by the Internet. Telephony networks that were designed primarily to support short hold analog voice traffic were called upon to accommodate long hold digital or data traffic and gradually sound, video and other multimedia traffic. Increasing processing capacities of integrated circuits that resulted in high speed PCs, workstations, servers and other network elements and the emergence of network technologies such as Sonet, Gigabit Ethernet, higher compression systems etc. were further instrumental in bringing in high speed Internet capable of supporting multimedia, VOIP, FOIP and other traffic. However, despite these innovations the network was never really integrated and data and voice traveled on the network on separate links. This resulted in much of network capacity remaining unused as data and voice could be transmitted only on links reserved for each type of traffic. Today's network is divided into two significantly different sectors.
PSTN - Public Switched Telephone Networks The PSTN generally consists of large, centralized, proprietary class-5 switches with remote switching modules, digital loop carriers (DLCs) and proprietary Switch Operating Systems (OSS). This configuration, which has been in existence since the early days of telephone services and designed to support voice traffic has been forced to support vast amounts of data traffic mainly generated from the Internet. It is generally believed that the telephone industry and the government/private bodies supporting it has invested over $275 billion in this infrastructure over the years and the mainly twisted copper/class 5 switch/switched circuit based network architecture can continue to deliver acceptable voice traffic for the foreseeable future. However, considerably smaller PSDN network, consisting of network points of presence (POPs) and remote access devices has experienced dramatic growth. The growth of PSDN has been influenced by the Internet, intranets, virtual private networks (VPNs), and remote access systems. Industry experts believe that the industry needs to deploy next generation networks (NGN) to accommodate the increasing demands for faster, higher volume traffic for different types of applications. While every agrees that Next Generation Networks (NGN) will be the network of choice in the near future, and it is already in deployment in some shape or form, not much consensus exists regarding an industry-wide definition of what constitutes NGN. While definitions are many, it is generally accepted in the industry that NGN defines the way the network will look and perform in the future, when a series of changes that being implemented currently take effect. It is generally agreed that the NGN will be flexible for the users and the service providers and will offer several opportunities for the service providers to deploy value added applications and improved quality of service (QOS) while managing to generate profits. Many industry experts believe that voice traffic in the Next Generation Networks will mainly flow through packet-switched protocols, using VOIP, from the current circuit-switched environment. However, this is yet to happen in a big way. It is significant that circuit-switched traffic generated about $450 billion in the year 2000 and is likely to generate about $475 billion in 2001 for the service providers. In 2000 revenues for service providers from VOIP was about $250 million and in 2001 it is likely to reach $300 million. It is inevitable that PSTN and PSDN networks will converge in some form in the near future. However, considerable difference of opinion exists in the industry as the extent of and time frame for convergence. Service providers, both incumbent and competitive newcomers are called upon to deploy strategies to migrate their networks to NGN configurations. In this effort, newcomers that have not invested heavily in traditional Class 5 circuit switch based networks enjoy several advantages over heavily committed incumbent service providers. The demand for NGN comes primarily from users that demand flexible value added services supporting high quality service levels. Quality assurance and service level guarantees will become the required service components for all types of services in the future. Extensive research conducted for this study conducted by Fuji-Keizai reveals that both traditional services providers and CLECs (Competitive Local Exchange Companies) must develop strategies to migrate to NGN and support the demands for high quality services to survive in the industry. The PSTN generally consists of large, centralized, proprietary class-5 switches with remote switching modules, digital loop carriers (DLCs) and proprietary Switch Operating Systems (OSS). This configuration, which has been in existence since the early days of telephone services and designed to support voice traffic has been forced to support vast amounts of data traffic mainly generated from the Internet. It is generally believed that the telephone industry and the government/private bodies supporting it has invested over $275 billion in this infrastructure over the years and the mainly twisted copper/class 5 switch/switched circuit based network architecture can continue to deliver acceptable voice traffic for the foreseeable future. However, considerably smaller PSDN network, consisting of network points of presence (POPs) and remote access devices has experienced dramatic growth. The growth of PSDN has been influenced by the Internet, intranets, virtual private networks (VPNs), and remote access systems. Industry experts believe that the industry needs to deploy next generation networks (NGN) to accommodate the increasing demands for faster, higher volume traffic for different types of applications. While every agrees that Next Generation Networks (NGN) will be the network of choice in the near future, and it is already in deployment in some shape or form, not much consensus exists regarding an industry-wide definition of what constitutes NGN. While definitions are many, it is generally accepted in the industry that NGN defines the way the network will look and perform in the future, when a series of changes that being implemented currently take effect. It is generally agreed that the NGN will be flexible for the users and the service providers and will offer several opportunities for the service providers to deploy value added applications and improved quality of service (QOS) while managing to generate profits. Many industry experts believe that voice traffic in the Next Generation Networks will mainly flow through packet-switched protocols, using VOIP, from the current circuit-switched environment. However, this is yet to happen in a big way. It is significant that circuit-switched traffic generated about $450 billion in the year 2000 and is likely to generate about $475 billion in 2001 for the service providers. In 2000 revenues for service providers from VOIP was about $250 million and in 2001 it is likely to reach $300 million. It is inevitable that PSTN and PSDN networks will converge in some form in the near future. However, considerable difference of opinion exists in the industry as the extent of and time frame for convergence. Service providers, both incumbent and competitive newcomers are called upon to deploy strategies to migrate their networks to NGN configurations. In this effort, newcomers that have not invested heavily in traditional Class 5 circuit switch based networks enjoy several advantages over heavily committed incumbent service providers. The demand for NGN comes primarily from users that demand flexible value added services supporting high quality service levels. Quality assurance and service level guarantees will become the required service components for all types of services in the future. Extensive research conducted for this study conducted by Fuji-Keizai reveals that both traditional services providers and CLECs (Competitive Local Exchange Companies) must develop strategies to migrate to NGN and support the demands for high quality services to survive in the industry.
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