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Service Providers and Carriers

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Note: Many topics at this site are reduced versions of the text in "The Encyclopedia of Networking and Telecommunications." Search results will not be as extensive as a search of the book's CD-ROM.

Anyone with an Internet access account and a telephone is familiar with service providers and carriers. You pay them money every month. However, "service providers" and "carriers" are broad categories. This section describes the different types of service providers and carriers and the service they offer.

The early history of telecommunications in the United States was dominated by one phone company: AT&T. The ILECs (incumbent local exchange carriers) are the result of the breakup of AT&T in 1984. That breakup created seven independent RBOCs (Regional Bell Operating Companies). These included Pacific Bell, NYNEX, GTE, and others, but mergers and consolidations have changed the original gang of seven. An LEC is a telephone company that operates within a local area called the LATA (Local Access and Transport Area). Most ILECs operate across a number of LATAs.

The IXCs (interexchange carriers) provide services between LATAs. ILECs are required to create a point of presence that IXCs can connect to and provide long-distance services to local users.

A nonincumbent telephone company is called an ITC (Independent Telephone Company). However, some ITCs operate in noncompetitive areas, i.e., rural areas that are not covered by the RBOCs or any other phone companies.

CAPs (competitive access providers) are carriers that built their own metropolitan SONET rings and offered private metropolitan telephone services to businesses that could bypass the incumbent carriers. The first CAP was Merrill Lynch, which installed a transmission facility in New York to bypass the New York Telephone Company and directly connect to the interexchange carrier. The Merill Lynch enterprise became Teleport Communications Company. Other CAPs followed, such as Metropolitan Fiber Systems.

The Telecom Act of 1996 permitted CLECs (competitive local exchange carriers) to set up operations in the same areas as the ILECs and offer competitive phone and data services. The Telecom Act of 1996 stipulates that ILECs must offer services to CLECs at wholesale prices, and allow CLECs to plug into the existing phone system and gain access to SS7 signaling. Technically, CLECs get access to UNEs (unbundled network elements), which basically gives CLECs access to the local loop and subscribers at the end of those wires.

The latest provider is generally called an ICP (integrated communications provider), which may own a variety of assets including local loop, SONET, cable TV, and wireless systems. ICPs may offer a full range of services including voice and data services, Internet access, Web hosting and co-location services, and infrastructure outsourcing (leasing dial-up access equipment to other ISPs). They also provide IP telephony services and Internet/PSTN integration.

For more information about the formation of these service providers and carriers, see "Telecommunications Regulation." That topic describes some of the problems that the ILECs and CLECs are having with current regulation. Also see "Telecommunications and Telephone Systems," "LATA (Local Access and Transport Area)," and "RBOC (Regional Bell Operating Companies)."

The carriers described in the preceding section have their roots in the telecommunications system. But a range of other service providers grew out of the development of the Internet. Originally, the Internet was a collection of links between universities and research facilities that were involved in U.S. Government research. In the late 1980s, the NSF (National Science Foundation) built the NSFNET, a backbone network with a hierarchical structure. The hierarchy of the network is what is important here. Regional networks connected to the backbone and local networks connected to the regional networks. When NSF turned the Internet over to commercial use, the regional networks turned into commercial NSPs (network service providers) and the local networks turned into ISPs (Internet service providers). NSPs provide backbone services or connections to the backbone and sell bandwidth to downstream service providers. ISPs sell Internet access services to subscribers. Note that NSPs may also provide ISP-like services and some ISPs are big enough to build their own networks. There is no solid definition of what is an NSP and what is an ISP, except that an ISP generally manages end-users' subscriptions and accounting services. See "Internet Architecture and Backbone" and "ISPs (Internet Service Providers)."

Also part of the mix are cable TV service providers, wireless services providers, and satellite services. See "Cable (CATV) Data Networks," "Wireless Broadband Access Technologies," "Satellite Communication Systems," and "DBS (Direct Broadcast Satellite)."

There are also service providers that build Internet exchanges, which are the facilities where many service providers come together and exchange traffic. NAPs (Network Access Points) are Internet exchanges. See the topic "Internet Architecture and Backbone," which contains a section called "PoPs and Internet Data Center." Also see "NAP (Network Access Point)," "Peering," and "PoP (Point of Presence)."

Not all service providers sell access and bandwidth. The following service providers offer so-called "managed services:"

  • ASP (application service provider)    These are providers that rent software applications and provide all the necessary support to manage those applications. See "ASP (Application Service Provider)."

  • MSP (Management service provider)    An MSP provides system management services, actively monitoring and reporting on a customer's networks, communication links, bandwidth, servers, and so on. See "MSP (Management Service Provider)."

  • SSP (storage service providers)    An SSP is a service provider that makes disk space available, either to individuals or to large companies. The space may be used for backups or to service mobile users. Data is protected because the SSP provides redundant, secure, and managed facilities. See "SSP (Storage Service Provider)." Internet file sharing services are covered under the topic "File Sharing."

An important service provider model has emerged over the last few years. This is the "wholesale service provider." These are providers who have constructed large networks of fiber cable in metropolitan areas and across wide areas, and who have built large PoPs to provide equipment co-location and wholesale services. Wholesale IP services allow other ISPs to lease equipment and services without building their own infrastructure. This allows the wholesaler to concentrate on hardware and service, including frequent upgrades, and allows ISPs to concentrate on selling services to and supporting end users. This model allows ISPs to grow without investing in infrastructure equipment and reinvesting in new technology. By leasing modems and other access equipment from wholesaler, ISPs can establish presence at COs and PoPs in much wider areas and offer local dial-up to their subscribers.

Some claim that this model will eventually threaten the ISP, but others claim that it allows ISP to expand and grow. If an ISP builds its own facilities, it may soon become a victim of obsolescence. If it leases, the burden of keeping up with new technologies is on the wholesaler. See "PoP (Point of Presence)" for more information.

Copyright (c) 2001 Tom Sheldon and Big Sur Multimedia.
All rights reserved under Pan American and International copyright conventions.