Dedicated Services

Dedicated services, also known as private lines, are similar to having two tin cans and a string between sites. The “string” and “tin cans” are for the exclusive use of the organization that leases them. The “string” portion is the medium over which the voice or data transmission is sent. The medium is generally copper, microwave or fiber optics. The “tin cans” are the devices, such as a telephone, modem or digital modem, that enables sites to transmit data, voice or video between locations.

The advent of the Internet has decreased commercial organizations' use of private lines. Organizations no longer need costly dedicated paths between sites to transmit corporate files and email. Many of them now use the public Internet or intranets which are the use of Internet technologies for the exclusive use of an organization and its employees.

Overview of Dedicated Services

Some organizations have such a high volume of voice, video or data traffic between locations that they opt to use dedicated, private lines to connect sites together. These dedicated, private lines are available for the exclusive use of the customer that leases them from a network service provider. An apparel chain in the Boston area has sufficient data communications traffic between its headquarters, warehouses and stores that it has dedicated links connecting end sites in other cities to headquarters for the purpose of inventory status and updates on store sales. It has a separate set of lines connecting all sites to its centralized voice mail.

The above is an example of an organization's private network. IT is a wide area network (WAN) because it runs between cities. Metropolitan area networks (MANs) consist of private lines that connect buildings within a city or metropolitan area.

Dedicated links eliminate per-minute toll charges for transmission. Private, dedicated links are priced at flat monthly fees rather than on the amount of voice or data transmitted. They are more reliable, provide faster transmission and are more convenient than switched service.

An important factor in the decision to use dedicated services is the desire for secure transmissions. Some firms believe that public network services such as Frame Relay are too public or open to hacking for applications such as funds transfer.

Because of the high maintenance and monthly telephone company fees associated with dedicated private lines, many companies now use managed data services from network service providers. These services act like private lines but are shared by multiple customers. Because they act like private lines they are called virtual private networks, (VPNs). They are virtually private. In the past, the term VPN referred to managed data and voice networks such as Frame Relay (covered in Chapter 6) and Gigabit Ethernet, in which carriers managed networks for customers. The term VPN (see the later section titled Virtual Private Networks) now refers to carrier managed networks, in which secure remote access to Web pages, company files or email is provided to employees, customers and vendors.

Fixed Monthly Fees

End users pay a fixed monthly fee, such as $400 for a line from New York City to Washington, D.C., rather than pay per-minute fees. The fee is the same whether the line is used two hours per day or 24 hours per day.

Fixed Routes

Dedicated lines are not flexible. Calls only can be sent between the fixed points to which the lines are connected, which might present a problem when organizations wish to add new locations.

Consider room-type videoconferencing equipment. A firm might purchase two video systems, one in New York City and one in California, for conferencing between these two company sites over a dedicated line. As often happens with video systems, the firm might, at some point, wish to hold a conference with a customer or vendor. If the equipment is connected only to the private line running between two fixed points, the flexibility of holding a conference with multiple vendors or customers is lost.

Exclusive Use

Dedicated circuits are not shared. Dedicated, private lines are put into place so that voice or data can be sent exclusively between the points on the private lines. Many organizations own switches [private branch exchanges (PBXs)] with the intelligence to route calls over their own dedicated lines. However, if the dedicated lines are busy when an additional request is made to place a call, the private switch will send the call over the public switched network. This enables firms to pack a high volume of traffic on their dedicated lines, but have the flexibility to route overflow, peak traffic on the public network.

24-Hour-Per-Day Availability

Dedicated services are available around the clock. This is cost-effective for companies that use the dedicated lines for voice, video and email during the day and bulk data transmissions such as transmissions of sales figures after hours. To illustrate, a corporation might use dedicated lines that cost $5000 per month for video and voice calls between two locations during business hours. After hours, they use the line for data communications. The data travels “free” during nonbusiness times.

Voice, Video and Data

Dedicated lines are suitable for transmission of both voice and data. Voice and data can share the same dedicated services or they can use completely different dedicated lines. Firms often lease T-1 lines that have 24 channels to tie locations together. They can use, for example, 12 of the paths for voice and 12 for data or video.

Fixed Capacity

Dedicated services are leased or built with a fixed capacity or bandwidth. For example, circuits are ordered from carriers such as AT&T or WorldCom at specific speeds and numbers of paths, or channels. Most organizations now lease lines with a minimum of 56,000 bits per second (bps) because of the small price difference between 56 kilobits (Kb) and slower lines.

Examples of speeds of dedicated lines are:

• 56,000 bits per second.

• T-1—24 channels, 1.54 megabits per second (Mbps)

• Fractional T-1—2 to 12 paths in increments of 56 or 64 kilobits per path.

• E-1—30 channels, 2.048 Mbps

• T-3—672 channels, 45 megabits per second.

• Fractional T-3—2 to 18 T-1s in increments of 1.54 megabits per second.

(T-1, E-1 and T-3 services are discussed in Chapter 6.)

Analog or Digital

Most end users specify digital private lines because of superior quality, higher speeds and reliability compared to analog private lines. Digital lines also have more capacity and fewer errors. Speeds above 19,200 bits per second are available only in digital formats. Carriers and local telephone companies prefer to lease digital rather than analog lines to customers because they fail less frequently than analog lines and are thus cheaper for vendors to maintain for customers.

Security

Some organizations use private lines to transmit proprietary information or financial data. They feel private lines cannot be as easily tapped into and listened in on as switched lines. Organizations concerned about security may place encryption devices on both ends of dedicated services. The encryption device scrambles the transmission when it leaves the sending location and unscrambles it when it arrives at the receiving location.

Convenience, Functionality and Enhanced Customer Service

For voice calls, end users might want the ease of abbreviated dialing and features that provide one-system functionality between sites. For example, telephone systems connected by private lines might have software installed, enabling users to call each other using four or five digits instead of the 11 digits used on the public switched network. The on-site telephone systems might also allow one set of operators to answer calls for multiple locations, which is a significant cost savings over full-time operators at each location. Some telephone systems offer telephones with displays telling a user the name of the person from another corporate private network location that is calling him or her. Finally, some organizations have one voice mail system shared by all locations and maintained by telecommunications staff at the headquarters.

The availability of private lines between sites improves customer service because it enables staff to transfer calls between sites. Customers are not required to make another call if they wish to speak with someone at a different site.

For data traffic, the speed, capacity and reliability are critical. Analog modem service is unreliable and switched digital ISDN services where an ISDN terminal adapter dials the call is difficult to configure and not available everywhere. If used for any volume, usage charges become prohibitive on ISDN as a switched service for data. (See Chapter 6.)

Network Topologies—The View from the Top

The term topology refers to the geometric shape of the physical connection of the lines in a network, or the “view from the top.” The shape of the network, the configuration in which lines are connected to each other, impacts cost, reliability and accessibility. Consider the multipoint configuration in Figure 5.2. The multipoint design is used in polling environments where a computer such as a mainframe polls terminals, one after another, asking if they wish to transmit or receive data. The computer polls the terminals in a predefined order. If one of the links in the multipoint network goes down, the entire network is out of service. In the mesh configuration in Figure 5.4, if one link is out of service, traffic can be rerouted over other links.

The following are network configurations:

• Point-to-point— One line connecting two locations.

• Multipoint— More than one line connecting more than two sites together. In LANs, this is also known as a bus design.

• Star configuration— All locations connect to, or “hub into,” a central site. PBXs and data switches in LANs are configured in star topologies.

• Mesh design— All points on the network, nodes, connect to each other in a flat or nonhierarchical manner. The Internet is made up of mesh networks.

Figures 5.1 through 5.4 illustrate the number of lines used in sample configurations of each topology. Higher numbers of lines result in higher monthly charges.

The star shape in Figure 5.3 is a common private network topology. In the case of a star configuration, all locations are connected to one main location (hub). If the main location goes down, all nodes (locations) on the network are out of service.

A mesh design (see Figure 5.4) costs more, but has more reliability built in than a star arrangement. A mesh configuration results in more paths for information flow. If one link goes down, voice and data can be transmitted via other paths. The customer pays for more links in a mesh configuration, but has higher reliability.

Pricing

Rates for private lines are based on distance and speed. Higher speed, longer distance lines cost more than slower, shorter circuits. For example, a 56,000 bits per second line between New York City and Boston might cost $400 per month. The same speed line from California to Boston might cost $1800. Speed is another factor that affects cost: A T-1 line at 1.544 million bits per second is more expensive than a 56,000-bit per second line. Volume and term discounts are available. A customer with a three-year contract for ten lines might pay a lower unit cost than a customer with a month-to-month contract for ten lines.

Pricing for dedicated lines consists of two items (see Figure 5.5):

• Local channels— Local channels run from a customer premise to the carrier's equipment. One local channel is required at each end of the private line. A carrier with no fiber installed in the customer's area it will lease the local channel from the incumbent telephone company or another carrier.

• Interexchange miles— Interexchange mileage is the portion of the circuit located within a carrier's network. The mileage runs from the access point, where it enters the carrier's network, to the egress point, where it leaves the carrier's switch. These are carriers' points of presence (POPs).

Dedicated private lines are expensive because carriers reserve capacity on them for the sole use of the customer that leases them. Shared networks (virtual private networks) are lower in cost because capacity on all of the routes is shared. In addition, ownership of private networks requires customer expertise for initial design and sizing of dedicated network, ongoing maintenance and redesign for new applications.

Declining Sales of Private Lines

Although, many private lines are still in service, organizations are changing service from private lines to shared services such as Frame Relay and Gigabit Ethernet service in which carriers manage security and reliability between sites. (Frame Relay is a way to access the Internet and LAN-to-LAN service over a shared carrier network. Gigabit Ethernet is faster than Frame Relay for Internet access and LAN-to-LAN traffic. (See Chapter 6 for a description of both services.)

Outsourcing to Manage Private Networks

Companies often hire outside expertise to manage their network services and equipment. Expertise is required for the selection of multiplexers, routers and modems that connect computers to networks, as well as to size the network properly. Ongoing tasks range from maintaining software for adding and deleting PC addresses in routers to determining the cause of failures on private lines and ensuring that capacity keeps up with growth.

One goal of contracting with an outsourcing service is to have one vendor responsible for problem determination regardless of the location of the breakdown. The outsourcing firm determines if the customer premises equipment is faulty or if the fault is in the outside lines. Growth in outsourcing network and on-site networking equipment maintenance is the result of the complexity required to maintain large corporate private networks.