Has telecom's 'next big thing' arrived?

Hyped for years, technology known as multiprotocol label switching is finally hitting the mainstream amid growing demand for services that marry voice, video and data on a single network.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
6 min read
Hyped for years, technology known as multiprotocol label switching is finally hitting the mainstream amid growing demand for services that marry voice, video and data on a single network.

Networking gear makers have long pitched MPLS as the next big thing for the telecom industry, offering simplicity, cost savings and new revenue opportunities. Now buyers are starting to listen, thanks in part to applications such as voice over Internet Protocol (VoIP) that are slowly reducing the importance of traditional voice networks.

In the latest signs of interest in MPLS, Sprint recently announced a virtual private network (VPN) service using the technology. In addition, Verizon Communications said that much of its 2004 capital budget will be spent on MPLS-enabled equipment rather than traditional circuit-switched telecommunications gear.


What's new:
Multiprotocol label switching, billed as networking's ultimate "convergence" technology, is going mainstream.

Bottom line:
As demand grows for services that marry voice, video and data on a single network, carriers and corporations are eager to use MPLS to bridge the gap between diverse technologies and support all of the latest applications and services.

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Vendors also are making a lot of noise about MPLS, as companies such as Alcatel, Cisco Systems, Juniper Networks and Nortel Networks prepare to show off their latest developments at the MPLS World Congress 2004 event in Paris this week. At the event, sponsored by the MPLS and Frame Relay Alliance, vendors will demonstrate interoperability between different MPLS-enabled devices.

"MPLS VPNs are on the roadmap of every large corporate customer," said Irwin Lazar, a senior consultant at the Burton Group. "Carriers often need to offer it just to get in the door."

Most carriers use one IP network for data and a separate circuit-switched network for voice, but that distinction is increasingly breaking down. As demand for "converged" network applications grows, carriers and corporations are eager to bridge the gap between diverse technologies to provide a seamless backend capable of supporting all of the latest applications and services.

MPLS alleviates many of the problems that arise in shifting applications that have traditionally run on circuit-switched networks to IP-based networks, such as the Internet. Because MPLS can handle any type of traffic, carriers can use it in their core infrastructure to converge traffic from all of its networks onto a single network, saving money in operational costs.

But massive infrastructure changes don't happen overnight, especially among large incumbent players. These carriers have invested billions of dollars in building traditional telecom networks, and they are adamant about not giving up any of the functions of their current networks. As a result, the movement toward MPLS convergence has been slow. In the meantime, carriers are using MPLS to drive revenue through new VPN services.

Who's using it
AT&T, British Telecom, BellSouth, Equant, Level 3, MCI and NTT Communications, among others, have already started using MPLS VPN services. Verizon said during its fourth-quarter conference call that it expects to launch its service in the second quarter of 2004. Sprint, which has traditionally been critical of MPLS, announced its new MPLS VPN service two weeks ago.

While newer carriers such as Equant and Level 3 have essentially built their network backbones using MPLS, many traditional carriers, such as AT&T and MCI, are still moving their disparate voice and data networks onto a fully converged MPLS infrastructure. Verizon--the largest of the old-school Baby Bells--said it will begin using a converged voice and data network with an IP/MPLS infrastructure in the fourth quarter of 2004. Even Sprint, which has always maintained that its pure IP backbone is much simpler than MPLS, is considering MPLS for convergence, although the company cautioned that it is still reviewing its options.

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"There has been an evolution in MPLS over the past couple of years, and we are looking at it," said Barry Tishgart, director of product management at Sprint. "If we conclude that it provides higher performance at a lower unit cost, we will readily move in that direction. But it hasn't proven that yet."

Analysts said such caution over MPLS is justified, noting that the technology is still a work in progress. Although adoption is rising, there's still much work to be done. There is no such thing as a single MPLS "standard," and many standards defining different aspects of the technology are still evolving.

For example, MPLS works fine within a single carrier's network, but engineers and standards bodies still need to figure out how to interconnect carrier networks using MPLS. The challenge is to connect these networks so that quality end-to-end service can be guaranteed.

"One of the biggest issues for carriers deploying MPLS VPNs is geographic coverage," Burton Group's Lazar said. "No single carrier has a footprint in every corner of the world. It's important for customer traffic to be able to go from one carrier's network to another without too many problems."

How it works
MPLS development goes back more than a decade, when researchers began to experiment with ways to bring the speed of hardware-based switching to software-based routing. MPLS evolved from numerous prior technologies, including Cisco's "Tag Switching," IBM's "ARIS," and Toshiba's "Cell-Switched Router." Official standards work on MPLS began in the Internet Engineering Task Force in 1997.

The main advantage of label switching is that it allows routers to make forwarding decisions based on the contents of a simple label, rather than by performing a complex lookup based on a so-called destination IP address.

In an MPLS network, incoming packets are assigned a "label" by a router. Packets are forwarded along a label switch path where each router makes forwarding decisions based solely on the contents of the label. At each hop, the label is stripped off and a new one is added that tells the next router how to forward the packet.

In many ways, the label switched paths of MPLS are no different than circuit-switched paths in traditional telecommunication technologies such as ATM (Asynchronous Transfer Mode) or Frame Relay networks. The main difference is that MPLS paths are not dependent on a particular transport technology. This means that MPLS can be used with any transport technology including ATM, Frame Relay or Ethernet. Thus, one of the true promises of MPLS is the ability to create end-to-end circuits across any type of transport medium, eliminating the need for overlay networks.

Carriers already use MPLS for a variety of purposes such as to guarantee a certain level of performance, to route around network congestion, and to create IP tunnels for network-based virtual private networks.

Because MPLS can separate traffic into different tunnels, carriers can use it to provide VPN services. Carriers already offer point-to-point VPNs using Frame Relay, ATM and IPSec, an IP-based encryption and tunneling mechanism. MPLS will allow them to offer a new meshed service.

MPLS VPNs are ideal for global companies that are looking to launch new services like VoIP. Unlike Frame Relay, which is often set up in a hub and spoke configuration, MPLS VPNs allow companies to link locations together directly. When a voice call is made using an MPLS VPN, packets can be routed directly between locations, reducing latency. This provides better quality calls, while also making more efficient use of the company's bandwidth.

As MPLS VPNs continue to be used and carriers move their backbones to MPLS, IP routing vendors such as Cisco and Juniper could benefit. Cisco CEO John Chambers told analysts and investors during the company's latest earnings conference call that he is already seeing demand for high-end IP routers growing as carriers shift spending away from traditional telecom gear to IP products. Demand for the company's high-end MPLS router grew 50 percent in the second quarter of fiscal 2004 from the same period a year earlier.

Traditional telecom vendors realize they need to incorporate MPLS into their product portfolios. Several large companies have acquired smaller start-ups with MPLS technology. For example, in the spring of 2003, Alcatel bought IP edge routing upstart TiMetra, and Tellabs bought MPLS switching start-up Vivace Networks. Other telecom gear makers have partnered with MPLS vendors. Lucent Technologies has partnered with Juniper, and Nortel has partnered with IP routing vendor Avici Systems.

Carriers are being driven to offer these new services by customer demand, according to experts.

"Customers want more flexibility in how they connect to their service provider," said Jim Daugherty, product director of MPLS VPNs for AT&T. "It's a combination of wanting to converge more services on their own networks and the any-to-any connectivity, which translates into operational savings."