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Volume 27, Issue 3

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The Impact of the Telecommunications Act on Business Continuity Plans

Although we have seen only limited actual service offerings in the local exchange market, there has been a mad rush to file with state Public Utility Commissions (PUC) by long distance companies, electric and gas utilities, cable television companies and new up-start companies. The rush to the local exchange market will reach a fever pitch in mid to late summer of 1998. While all of the major long distance companies are busy making preparations to offer local service, the incumbent local telephone companies (ILEC's) are working nights, weekends and holidays trying to meet a 14-point checklist, required by the Telcom Act, before they are allowed into the long-distance business. Then there are the specialized carriers that have focused on bypassing the local phone companies for access to long distance companies, heretofore referred to as Competitive Access Providers (CAP's). Many of these specialized carriers have filed with state PUC's and the Federal Communications Commission (FCC) to provide both local and long distance service. The incumbent cable television companies have been upgrading their CATV networks over the last 2-3 years with fiber based systems with the objective to improve their service image and offer more channels. Most of these CATV companies now intend to use some of that same fiber network to offer telephone service. You may wonder what gas and electric utility companies are doing in the phone business. Well, many of them have had private fiber networks in place for years and are not new to fiber optic systems. The big advantage they have are their extensive network of private rights-of-way where they can place new fiber cables. Expect the gas and electric companies to end up providing much of the backbone fiber networks for the smaller up-start companies. As you can see, it will take a thick program to keep track of all the players.

The Telecom Act & The Business Continuity Planner

The winter, 1997 issue of the Disaster Recovery Journal issued responses to their Consultant Survey 1997. Of the forty published responses there were only three that stated they had any focus on telecommunications. This is not unusual since advice on how to configure the telcom network to meet business continuity or disaster recovery needs has been furnished by either the telecommunications industry or specialized consultants. I should know, because I have been called in to provide just such specialized consultation at an ever-increasing frequency over the past 10 years. You, as a business continuity planner must quickly pick up on the highlights of the changing telecommunication industry to avoid short term mistakes and then learn all that you can about telcom network architecture to strengthen your consulting skills for the future. With all of the confusion competition will bring to the market, the understanding of how telecommunication network reliability fits into your plans will not be a luxury, but clients will require it in the near future.

One Stop Shopping

For many years shoppers were happy to go to the hardware store for nails and paint, the grocery store for milk and bread, the nursery for plants and the clothes store for a pair of blue jeans. With the introduction of Super K-Mart and Super Wal-Mart stores consumers now go to one store and buy all that they would have at four other stores. Consumers like the convenience of one stop shopping. There was a time when you got all your phone service from one store, the days of the Bell System. The only problem back then was Mother Bell tended to tell you what you needed rather than you deciding what was best for you and your company.

In 1994 Judge Harold Greene presided over the breakup of the Bell System and competition was introduced into long distance and telcom equipment manufacturing. Local phone service was still a protected monopoly, but the long-distance industry saw hundreds of companies enter the market. Not all of the new companies owned and operated their own networks, in fact very few did. Most new entries into long distance leased time or bandwidth from one of the big three carriers and resold it to consumers. For the consumer, it was difficult to know if a carrier owned or leased their facilities. One long distance carrier recently called my home and as part of their sales pitch claimed to have a network as extensive as AT&T's. After a little checking I found that they leased all of their network from AT&T, so I guess their claim was correct.

The capital required to build even a small telecommunications network is so great that if someone wants to get into the market they are driven to leasing as the only economic alternative as a start up company. As these new entries grew over the years they began to build and maintain pieces of their own network in high traffic corridors between major cities. In the early 1990's some of these companies merged with other small companies to build larger facility based networks. These mergers continued until we now have the WorldCom type long-distance carriers that compete very effectively with the major carriers.

When President Clinton signed the Telecommunications Act of 1996, the door was opened once again for one stop shopping for your telecommunications needs and every service provider would love to become your single source of telecommunications. The question you must ask is how much of their network is owned and maintained by them and how much is leased from other sources.

The drafters of the Telcom Act realized that no single company had the resources to quickly enter into competition for local or long-distance service by building their own networks, so provisions were made for the lease, resale and interconnection of the networks of competing companies. Section 251 of the Telcom Act and the subsequent August 8, 1996 FCC Interconnect Ruling provides for interconnection of competing carrier networks where 'technically feasible'. It is this 'interconnection where technically feasible' provision of the law that can pose potential problems for existing and future business continuity plans.

It is very likely that end users will be approached by telecommunication service providers of all types with proposals to diversify or upgrade the end user's network. In larger metropolitan markets, some providers will have the capability to do just that, while most will lease parts of the local loop from the incumbent local exchange company, a CATV company or a CAP. The same is true for Incumbent local exchange companies (ILEC's) wanting to provide long-distance service along with local service. Generally, they have extensive fiber networks connecting offices within their service area, but will be forced to lease facilities or bandwidth to provide service outside their area.

The Network

With the intent to encourage quick entry into the local and long-distance markets by competing carriers, the FCC went to great lengths to create a building block approach to interconnection. The FCC, very wisely so, decided not to determine all that was 'technically feasible', leaving that to the state PUC's to determine when a question arises between competing carriers. It is important for you to understand some of the basic network elements that carriers can and will lease so that you can determine if the lease of that specific network element will have an impact on your business continuity plan.

Let me point out that leasing is not all bad. Long-distance carriers, both the big ones and small ones, have leased facilities for years and continue to do so today. It is how those leased facilities are incorporated into the overall network that can make the difference between a reliable network and one that has weak points.

Let me begin to unravel the interconnect puzzle by breaking down portions of a basic telecommunications network. A basic network can be broken down into network segments consisting of the Point of Origin, the Local Access facility or local loop, a Carrier Facility (either local area or long-distance), a second Local Access facility and the Point of Destination. The Points of Origin and Destination represent the end user's telephone equipment room while the other segments represent parts of the public network.

Local Access Facilities

Local Access facilities are those copper cables and fiber optic systems that carry circuits from the customer's premise to some common point in the network where the circuit can either be switched to another part of the network (voice and switched data) or cross connected to a non-switched facility for transport to a destination location (point-to-point data and non-switched voice).

Many local loops are broken down into feeder and distribution networks where a high capacity facility such as a fiber system transports circuits from the central office to a centrally located distribution point in the loop called a Remote Terminal (RT) site. Lower bandwidth circuits are then terminated in something called a Feeder-Distribution interface before they are carried to the customer's premise. Just because there is fiber coming into your building doesn't mean that it isn't extended from a high speed multiplexer located at a RT.

The FCC's Interconnect ruling allows a competing carrier to lease any portion of the local loop that they need to provide service. A competing carrier can place a new fiber cable between a customer's building and a RT then lease 'dry fiber' between the RT and the ILEC's central office. At the ILEC's central office they can then connect to their own fiber system for access to their own switch in another part of town or in another town. A competing carrier is not limited to leasing whole fiber systems either; they can lease a channel in the ILEC's high-speed fiber system or a channel in a Digital Loop Carrier (DLC) system for lower bandwidth circuits.

If you are shopping for an alternate carrier to diversify your local network, make sure that it is truly a parallel network and not in common with the rest of your network.

Carrier Facilities

I am grouping both local calling area and long-distance carrier networks together because they are built much the same way and for simplicity. I also believe that, over time, the networks will be reconfigured into local feeder networks and high speed transport networks that are driven more by traffic patterns than by who owns each part of the network.

Carrier networks are separated into switched and non-switched types of traffic. If a customer has a voice or data circuit that is dedicated between two points, then a predetermined path can be established through the carrier network, grouped with other circuits and placed on a high speed fiber system. This is an over simplification of how actual circuit routing is accomplished, but serves to show how non-switched circuits differ from switched circuits. By comparison, switched voice and data traffic must hit a switch before a path through the network can be established. The processing of a switched circuit is much more complex, requiring an additional layer of network elements and call processors.

A carrier has the same latitude in leasing what is needed for carrier services as in the local loop. Competing carriers can portions of the transport network on both ends of the network and lease bandwidth, 'dry fiber' or entire fiber systems in the middle.

Again, if you are shopping for diversity in your network, know what you are buying. If you want diverse DS3's supplied by competing carriers from a client's data site to a hot site, make sure they are carried on separate lightwave systems if not a totally separate fiber route.

A Word about Standards

Several years ago I was asked by a client to sit in on presentations by several telecommunications companies. The companies were asked to explain the network reliability provisions of their network. One sales representative made the statement that their network was self-healed. When asked to explain what that meant, they said that their main fiber system between the client's city and the carrier's tandem switch was backed up by a microwave system. When pressed further as to the capacity of the microwave system, it was determined that it would carry 80% of bandwidth of the primary fiber system. That is when the client asked if he was on the 80% that would switch to the microwave system or the 20% that would never make it out of the city.

Everybody has a story about exaggerated claims made by sales representatives. There is even a legal term to describe those 'too good to be true' claims, it is called puffery. As long as it is not carried too far, it is legal. When your network goes down and your service provider starts to crawfish on their claim that their network is self healed, you are still without a network, puffery or not.

When Synchronous Optical NETwork (SONET) equipment first hit the industry in the early 1990's, I saw a tremendous need for use of standard terms for describing network architecture. You may not realize it, but all SONET systems are 'self-healing' by design. Every SONET multiplexer has 1x1 protection of the high-speed electronics including the optical transmitters and receivers. Sales reps love to tell you all of this protection switching is done at the speed of light (50 milliseconds to be exact). What a sales rep may not tell you is that a backhoe can take out the whole system if the main and protect fibers are not routed in diverse paths between multiplexers.

I have developed a standard description for different levels of diversity that may help you in discussions with service providers. They are simple to understand and by using them you can eliminate any misunderstanding between you and the carrier as to what is self-healed and what is not.

Look for the 'Sears' Attitude

For the consumer with a business continuity plan, the lure of one stop shopping for telecommunication services must be tempered by the knowledge of how their new network fits into that plan. While under the impression that the end user has two separate local or long-distance networks, there may be only one network and two service providers (the one who owns and maintains the network and the one who is the consumer's contact).

After World War II, Sears, Roebuck & Company began a successful expansion based in part on the principal that they would stand behind every product they sold. They did not manufacture the products, but they put the Sears brand name on many of them and told their customers that if it broke Sears would be there to fix it. Some of their products, like their Craftsman hand tools would even be replaced with no questions asked and at no cost to the customer. Nobody needs to tell you how this story turned out; Sears became the place to shop for most of America.

It is this 'Sears' attitude that will drive the success stories in the post Telcom Act era of telecommunications. As a telecommunications consumer, look for signs of how your service provider will respond to service needs. Don't be afraid to ask for details about what facilities they own, which ones are leased, who they are leasing from and what arrangements they have for repair of leased facilities. If a service provider can't or won't provide this information, be wary.

Know the 'Gotcha's'

The new era of competition in telecommunications will bring some problems with it, but there is an opportunity for the end user with a business continuity plan to improve their telecommunications network and maybe save a few dollars along the way. The key to surviving the onslaught of sales teams with impressive slide presentations that were prepared at corporate headquarters is to know what questions to ask and where to look for hidden problems. A member on the advisory board of my company put it this way; 'Charlie, I need to know the gotcha's.'

A Need to Know More

Ask ten people when they think active competition will take place in the local loop and you will get ten different answers, but it will happen. The question you must ask yourself is; 'Will I, as a business continuity professional, be prepared to respond to the challenges that the Telecommunications Act will bring?' This article was prepared to provide you with an overview of what you need to be aware of as competition heats up over the next few months and to prevent you from being blindsided as you prepare your business continuity plans in this new competitive environment.

Space and time does not permit me to deal with the complexities of telecommunication network architecture, but the fundamentals are within your reach. I have developed basic network reliability principals such as 'Levels of Diversity' to assist the business continuity professional in dealing with this key component of business continuity planning. The Disaster Recovery Institute (DRI) is working with the Institute for Communication Reliability Studies (iCRS) to develop an in depth course on the impact of the Telecommunications Act on business continuity planning. If such a course would be of benefit to you, express your interest to Bill Langendorfer at DRI or Charlie Barrow at iCRS via EMAIL, letter or by phone. You may contact Bill Langendorfer at (314) 434-2272, 75501.3361@compuserve.com by EMAIL or by US Mail at 1810 Craig Road, Suite 125 St. Louis, MO 63146. Charlie Barrow may be reached at (910) 681-0007 by phone, cabarrow@bellsouth.net by EMAIL or by US Mail at 400 Donny Brook Court, Winston-Salem, NC 27103.

Charlie Barrow, CBCP is the founder and Executive Director of the Institute for Communications Reliability Studies, an organization established to provide training and consultation to business continuity professionals and end users of telecommunications services. iCRS is located in Winston-Salem, North Carolina.

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