Access services roll ahead--slowly: The hot technologies: private line and analog dialup. The move toward IP will be slow, and mostly within carrier nets.

The Internet-inspired notion that businesses might embark on a wholesale replacement of their leased lines for IP virtual private network (VPN) connections has been pretty well discredited. That doesn't mean there's no role for IP networks in the access service picture; it's just that those networks won't, for the most part, extend all the way out to the customer premises.

Instead, the major carriers want to use the cost advantages of IP within their own core networks, while connecting the "last mile" with existing services, such as frame relay or private lines. The obvious exception is in remote access connectivity for individuals or small offices, where IP VPNs do make sense.

But even this market is complicated by carrier bankruptcies and slower deployments in the DSL space (see BCR, November 2001, pp. 56-60). Instead of ubiquitous broadband wireline connectivity, carriers are now promising a smorgasbord of remote access choices, hoping to find something that's right for every site in a widely dispersed enterprise. The default connection will continue to be dialup, however, and like private lines, this "legacy" market shows no sign of fading away.

Private Lines And Frame Relay

Of course, the private line market never really went away, and most observers now concede that it never will. Market research from Vertical Systems Group (Figure 1) shows the evolution in private line buying: The number of connections is expected to decrease this year, but Rosemary Cochran, principal of Vertical Systems, says private line bandwidth will actually increase. That's because users are moving up the hierarchy, trading multiple lower-speed lines for fewer higher-speed connections.

Even more significant is the revenue picture painted by Figure 1. Private lines still account for more than half the overall market in terms of revenues for 2001. Interestingly, even ATM UNI services, which no one considers a major part of the internetworking picture, generated four times more revenue for carriers than IP VPN services.

Meanwhile, frame relay continues to enjoy growth in both number of connections and revenues. Rosemary Cochran believes frame relay's staying power demonstrates that the IP hype is just that. "There's a million endpoints out there that are working fine with frame relay," she said. "One of the conventional wisdoms that I think is starting to go away is that …