Sprint, the company that pioneered the use of fiber-optic phone networks, raised the stakes in the telecommunications industry again Tuesday by unveiling a next-generation network designed as much for transporting data as for handling voice calls.
Sprint's $2-billion Integrated On-Demand Network, or ION, is based on Internet technologies that route data more efficiently than the century-old public telephone network.
The new network will make it possible for customers to use a single, high-capacity line to simultaneously conduct multiple phone calls, receive faxes, log into the Internet at super-fast speeds and run an array of other advanced services that have yet to be invented--all at lower prices.
While a few upstart companies--namely Denver-based Qwest Communications International and Level 3 Communications of Omaha--already are deploying such networks, Sprint is the first big carrier to attempt a major transition from the old style to the new. Analysts expect long-distance rivals AT&T; and MCI-WorldCom to eventually follow suit.
Some questions and answers about Sprint's new network:
Q: How does the Integrated On-Demand Network work?
A: Using a technology called asynchronous transfer mode, or ATM, the network divides phone conversations and bits of computer files into digital "packets." Each packet has its own encoded "address" and is sent along a shared line to its specific destination. The packets are then reassembled at the other end. Using this method, multiple users can share the same line.
ATM also offers users uncommon flexibility, allowing them to quickly add more capacity as needed, paying only for the amount in use.
Today's phone networks, based on circuit-switched methods, devote an entire line to a single phone conversation or Internet connection, even though the line is not in full-time use.
Q: So it's OK to use the phone and be connected to the Internet at the same time?
A: Yes. ATM technology labels all transmissions individually so they can travel along the same line without interfering with one another.
Q: How much will the service cost?
A: Sprint plans to set prices for the service later this year. The company said the cost of a long-distance call will drop 70%, but it is unclear how much of that savings will be passed on to customers.
The bigger change may be in the way Sprint charges for the service. Rather than having customers pay a flat fee for each minute they are connected to the phone network, the company may instead bill on the basis of how many bits are transmitted or received.
While bits of data is not a concept widely understood by consumers today, the approach is similar to the way utilities bill customers based on how much water, electricity and natural gas they use. Some observers believe that the phone companies may ultimately shift to the flat-fee, "all-you-can-eat" pricing model employed today by some Internet service providers.
Q: Why is that cheaper than the regular phone network?
A: By carrying voice, data, fax and other traffic on a single network, Sprint saves money on equipment costs, which would essentially double if the company divided voice and data traffic over separate systems.
In addition, the company's new network would bypass much of the Baby Bell system, allowing Sprint to avoid the access fees that are typically paid to local phone companies to complete long-distance calls.
Q: How will Sprint keep track of how much data I send and receive?
A: Sprint would install a meter box at the customer's home or business. The boxes would cost $200 to $500, but Sprint has not said how much of the cost would be passed on to customers.
Q: Do I have to buy a special phone or any other equipment to use this network?
Q: When will the service be available in California?
A: Some large corporations, among them Ernst & Young, Tandy and Silicon Graphics, will begin using ION in a few months, with wider availability by the end of the year. Small businesses will see the service early next year, and consumers will have access in late 1999, Sprint said. However, since Sprint needs to gain access to copper phone lines owned by local phone companies, the pace of the residential service roll-out may vary by region.
* A BOLD PLAN: Sprint promised to revolutionize the way people use their phones. A1
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Sprint Corp. is trying to win the race to become a one-stop shop for communications services with a new $2 billion network that will allow consumers to talk on the phone, send faxes and sign on to the Internet--all at the same time. The new system, the Integrated On-Demand Network, allows multiple use of the same telephone circuit.
Voice data are carried as a continuous signal over a line that is kept busy, so no other information can travel through. E-mail and Internet access can be handled on the same line, but not at the same time as a phone call.
Hardware, including a box expected to cost about $200 to $500, will simultaneously route voice, fax and Internet connections into the Sprint network and send signals as digital packets that will all travel on the same line.