RESELLER CHANNEL: Resellers Rally `Round T1 Resurgence

Posted: 07/2002

Resellers Rally `Round T1
Resurgence

By William Matern

For
years, data communications pundits have predicted T1/E1 soon would be obsolete,
replaced by Ethernet, gigE, DSL and other data transports. Predictions aside,
telecom carriers and resellers still are focused on transporting voice and data
over T1 because demand continues to grow, profit margins are healthy and the
technology is proven and can accommodate newer packet-oriented transport.

Part of the growth can be attributed
to T1’s capability to transport voice and data on a single twisted pair
(integrated T1). While newer transport technologies are attractive from a data
standpoint, voice is still a challenge they must overcome. What the pundits
often overlook is that while newer transport technologies have been maturing, T1
has been improving.

The Yankee Group notes the
tremendous opportunity for resellers of telecom services to profit from selling
integrated T1 service to small and medium businesses (SMBs), citing the
addressable market to be 28 percent of all businesses with between 10 and 249
employees.

Data Transports’ Reach
Source: NComm Inc.

T1 Evolves

In the 1960s, the early days of T1
service, T1 technology could be difficult to deploy because of its physical loop
reach and complexity. During the years, dramatic reductions in the engineering
time required to deploy T1 have been accomplished, while improvements have been
made in transporting data or voice applications more efficiently over T1. Higher
speed access methods like DS3, SONET and SDH have specific accommodations for
carrying multiple T1 streams. With such capabilities already built into the
network, it also is possible to deliver services requiring high densities of
T1s.

Limitations in physical reach were
resolved with the advent of HDSL in the early 1990s. HDSL permitted T1 to be
deployed over CSA (Carrier Service Area) loops by quadrupling the 3,000-foot
reach of T1 without the expense and complexity of repeaters/regenerators. About
80 percent of customers needing service are within CSA, or about 12,000 feet,
using 24-gauge wire. Further, HSDL has better spectral characteristics, reducing
the chance of it interfering with other circuits being carried in the same wire
bundle.

In the late 1990s, HDSL2 reduced the
wire pairs needed from two to one and made it possible for T1 to better co-exist
with newer technologies like ADSL and VDSL, which were anticipated to show up in
the same wire bundles. This made engineering less complex and effectively
doubled the revenue potential of the installed copper wire bundles.

Now, HDSL4 is a new standards-based
technology that provides T1 access 30 percent beyond the current CSA guidelines
without the spectral interference of earlier implementations. HDSL4 (HDSL2 over
two pairs of wires) extends T1 out over 16,000 feet using 24-gauge wire with no
repeaters. This brings more than 90 percent of potential users within range of
T1 without engineering lines with repeater/regenerators.

SMB Opportunity

The proliferation of integrated
access devices (IADs) makes T1 service a relatively straightforward value
proposition for SMBs and, thus, a prime opportunity for resellers.

Integrated Voice and Data. The major
carriers have been selling integrated T1 for years as a high-profit service for
large companies leasing T1s for their own use. It also provides a cost-effective
transport service for SMBs while giving the reseller a high-margin offer that is
easy to deploy.

A T1 is designed to carry 24 phone
lines (DS0s) utilizing 64kbps each, but these DS0s can be used for data as well
as voice. Further, the DS0s can be used as a single "pipe." Two can
yield a 128kbps circuit, four will yield a 256kbps and so on. A single T1 can be
configured to provide POTS and data lines as required. Because most businesses
are located within 12,000 feet of the beginning of the T1 circuit HDSL2 can be
used to provide service on a single pair of wires.

Web Hosting. ADSL is suitable for
most end users that require Internet access because it provides the high-speed
down link required for massive downloads. However, Web sources providing these
feeds must get the information into the Internet at least as fast as users
expect to receive it. Asymmetry does not work for the Web hosting site or data
source. T1 provides a symmetric alternative for providing data into the
Internet. In addition, it provides ample bandwidth for downloading and uploading
to overcome the bursty nature of inquiries and the proven 512kbps bottleneck
between the user and source in the Internet.

Multitenant Market. Once a telecom
service reseller starts deploying T1, it also can use it to deliver service to
more than one business at a time. A T1 can be deployed to a multiple tenant
office complex or apartment building and the DS0s split up to offer dedicated
voice and data services to multiple clients. This offering is made easier and
less costly to engineer and maintain because of advances such as HDSL, HDSL2 and
HDSL4.

T1 is a workhorse technology. It is
engineered for the voice requirements of low latency yet can meet the
requirements of data transmission. In data applications, it can function in its
native TDM mode or as the transport layer for packet-based protocols. It can
carry phone lines while simultaneously carrying data. It has reach without
interfering with other services like ADSL or ISDN. And, it all can be provided
to a user on a single twisted pair of wires. The equipment and technology is
known well, is proven, is relatively inexpensive, and finally, it is consistent
with the existing network infrastructure.

William Matern is CEO of NComm
Inc., a provider of WAN interfaces such as T1/E1, T3/E3, SONET and SDH.