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Representative terms from entire chapter:
data communications
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27
Toward a National Data Network: Architectural Issues and the
Role of Government
David A. Garbin
MITRE Corporation
The last two decades have seen several revolutions occur in the
telecommunications field, encompassing both the underlying
technologies used to construct networks and the services offered to
customers over these networks. In this paper, we follow two threads
on their converging paths: the emergence and evolution of packet
switching as the dominant technology for data communications and
the central management of computer-controlled switches as a
mechanism to create virtual private networks (VPNs) out of a
national infrastructure. By 1990, the second thread culminated in
the dominance of VPNs for the voice communications requirements of
large customers. Now, both threads can combine to create a similar
phenomenon for data communications requirements.
These events are playing out against a background of explosive
growth in requirements for data communications. Growing public
interest in the Internet and the availability of user-friendly
access tools is causing a doubling of Internet traffic every 12
months. Federal government programs focusing on service to the
citizen and more efficient operations within government are driving
federal agency requirements higher and higher. Finally, there is a
national initiative to bring the benefits of reliable, inexpensive
data communications to public institutions as a whole through the
creation of a national information infrastructure (NII). The
federal government role in bringing the NII into being is unclear
at the present time; current proposals call for the private sector
to play the major role in actually building infrastructure.
However, it has been postulated that the federal government could
use its vast purchasing power to facilitate the development of an
open data network, a key building block of the NII.1
It is well known that telecommunications networks exhibit
economy-of-scale effects; unit costs decrease as absolute volume
increases. This paper explores the economics of single-agency
networks, government-wide networks, and networks with the span of
the proposed NII. Specifically, it explores the benefits of a
government-wide network based on shared public switches and
transmission facilities. Such a network would yield the best unit
prices for the government and create a solid infrastructure base
for the NII at no additional cost.
Basic Concepts
Before we begin, a basic review of the key concepts underlying
the issues explored in this paper is warranted to avoid any
confusion over terms and definitions. These concepts are best
discussed in terms of contrasts:
•
Voice versus data communications,
•
Circuit versus packet switching, and
•
Shared versus dedicated networks.
In a simple sense, data communications are between computers,
and voice communications are between people. However, that basic
fact results in different characteristics for data traffic as
opposed to voice traffic.
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Data traffic is "bursty" in nature; it occurs in periods of
intense activity followed by (sometimes long) periods of silence.
If delivery of the data cannot be immediate, they may be stored in
the network and delivered at a later time (how much later depends
on the application). Data traffic is not tolerant of errors; any
error passed to an application will cause problematic behavior of
some kind. The above characteristics lead to the requirement for
protocols to package the data, transmit the package through
intermediate points, check for and correct errors, and deliver the
package to the distant end. By contrast, voice communications are
continuous in nature and have a real-time delivery requirement. A
varying delay for a voice signal results in totally
incomprehensible speech at the receiving end. However, voice
signals are robust and tolerant of errors. Speech itself is so
redundant that words remain comprehensible even at error rates of 1
in 100 in the digital bit stream. It is clearly more important for
voice applications to deliver the signal on time than to deliver it
with 100 percent accuracy.
These different requirements have led to different switching
techniques for voice and data communications. Circuit switching
sets up a path with a guaranteed bandwidth from end to end for each
voice call. While this would also work for data communications, it
would be inefficient since the reserved bandwidth would be unused
most of the time. A technique known generically as packet switching
was developed to effectively share transmission resources among
many data communications users. When we refer to data networks in
this paper, we are talking about networks employing some form of
packet switching.
The final concept we need to explore is the concept of shared
versus dedicated networks. In the early days of telephony, all
customers used (shared) the public switched network for voice
communications. The backbone of the public switched network was
composed of large circuit switches located on the telephone
companies' premises. By the 1960s, manufacturers began producing
economical switches designed for use on customers' premises to
lower costs for large users. While these were primarily for local
service, it was soon discovered that large customers could connect
these premises switches with private lines and create private
networks for long distance voice communications. Public switched
service rates at the time were high enough that these private
networks were economical for large corporations (and the federal
government).
Background
As packet switched data networks came into being in the 1970s,
the private network alternative was the only one available to
customers. There was no public packet switched data network, nor
was there a large demand for one. Private data networks grew
alongside the private voice networks, with packet switches on
customer premises and private lines connecting the switches.
Computer processing technology limited the capacity of packet
switches to that required by a single large customer; little
penalty was paid in not locating switches on carrier premises where
they could be shared by many customers.
In the 1980s, two forces converged to spell the end of the
private voice network. Divestiture created a very competitive
interexchange market, and computer-controlled switch technology
evolved to the point where the partitioning of a large network in
software became feasible. In this case, the large network was the
public switched network of each interexchange carrier that was
serving the general population. Over time, competition drove the
unit prices being offered to a wide range of customers down to
levels consistent with the large total volume. Volume ceased to be
a discriminator for price beyond a level of one-tenth of the
federal government-wide traffic. This service, which now dominates
the voice communications market, is called virtual private network
(VPN) service.
The current approach to data communications for large customers
is still the private network. There are two shortcomings to this
approach: economies of scale beyond a single user are never
obtained, and the proliferation of switches on user premises does
not further the development of a national infrastructure.
Technology such as asynchronous transfer mode (ATM) switches and
high-capacity routers is emerging that makes carrier-premises
switching feasible. At the same time, initiatives in government and
in the research and education communities are generating a large
future demand for data communications. The consolidated demand of
the federal government could create an infrastructure that pushes
unit costs well up on the economy-of-scale curve. However, this
will only be the case if a shared network is used to satisfy these
requirements. We call this network, based on standard interfaces
and protocols, the National Data Network (NDN). This paper presents
the
Page 219
architecture and economics of such a network as it is used to
satisfy the requirements of a single federal agency, the federal
government as a whole, and the general population as the transport
element of the NII. The implications of this architecture for
universal access to the information highway will be apparent.
Assumptions
Any study of telecommunications alternatives must make
assumptions about the technological and regulatory environment that
will be present during the projected time period. In this case, the
time horizon is from the present over the next 5 years. We assume
that router and ATM switch technology that is now emerging will be
ready for widespread deployment in operational networks during this
period. Although the regulatory requirements that mandate the
current restrictions relating to local exchange carriers (LECs),
interexchange carriers (IXCs), and local access and transport areas
(LATAs) are likely to be modified by the end of the period, the
current structure is assumed for this study. Even if LATAs as a
formal entity were removed, they would continue to be useful to
represent statistical areas for traffic purposes.
All switching will be performed at LEC and IXC locations,
beginning at the LEC central office, or wire center, serving the
customer. Access to the wire center could be through a dedicated
local loop or through a shared channel on an integrated services
digital network (ISDN) local loop. Local loop costs between the
customer's location and the wire center are not part of this study.
Routers at wire centers or at tandem offices within a LATA will be
provided by the LEC. LATA and regional switches that are used for
inter-LATA transport will be provided by the IXC. Note that, in
this scenario, both LECs and IXCs must implement shared subnetworks
and cooperate in achieving the level of sharing needed for
end-to-end economies to be realized. In most cases, this is not the
case in today's networks. Each carrier generally uses the other
only for dedicated circuits between its switches. The realization
of an end-to-end shared network architecture is critical for the
formation of a National Data Network.
A final assumption that does not affect the economics of this
study, but that is essential to the viability of a shared network,
is the successful addressing of security issues. Most present
networks use encryption only on interswitch links; the traffic in
the switches is in the clear and is protected by physical security.
Since this would be an issue if the switch were on carrier
premises, more complex security systems that encrypt traffic at the
source before the network protocols are added are required to
maintain security. Fortunately, such systems are being designed and
deployed since they also provide a much higher level of security
than the present system.
Study Methodology
Three physical network models were formulated and evaluated for
cost-effectiveness over a range of traffic levels. These models
were crafted to represent the generic data communications
requirements of a single federal agency, the federal government as
a whole, and the general public as a user of the NII. The models
differed primarily in the number and distribution of wire centers
served by the network. The agency model served 1,350 wire centers;
the distribution of wire centers served was derived from projected
Treasury locations during the time frame of the study. The
government model expanded the coverage to 4,400 wire centers. These
corresponded to the wire centers currently served by FTS2000. For
the NII model, all the wire centers in the continental United
States (21,300) were served.
A network was designed for each model and traffic level.
Transmission and switching capacity were sized to meet the
throughput requirements for the traffic. Each network was then
priced using monthly prices for transmission and amortized prices
for switching equipment. A percentage factor was applied for
network management based on experience with agency networks. The
total costs and unit costs for each model and traffic level were
then computed and analyzed. The following sections provide
additional details on the network architecture and the traffic and
cost models used in the analysis.
Page 220
Network Architecture
A four-level hierarchy was used for the network architecture;
the locations of the switches were based on the current LEC and IXC
structure that exists today. The equipment used for switching was
based on the current technology of high-end routers at the lower
levels of the hierarchy and ATM switches at the backbone level. As
ATM technology evolves, the current routers will likely be replaced
by ATM edge switches. For the purposes of this study, the capacity
and cost factors of these two technologies would be similar.
At the top of the hierarchy is a backbone consisting of fourteen
switches and connecting circuits. The country was divided into
seven regions corresponding to the current regional Bell operating
company (RBOC) boundaries. Two switches were placed in each region
for redundancy. The topology of the interconnecting circuits was
based on the interswitch traffic, with the requirement that each
switch be connected through at least two paths. The backbone
subnetwork is shown in Figure 1.
Within each region, one switch is placed in each LATA in the
region. This switch serves as the "point of presence" in the LATA
for the backbone network. Each LATA switch is connected to one of
the regional backbone switches. Intra-LATA traffic is switched
internally at this level and does not reach the backbone. Figure 2
illustrates this connectivity for the Northeast region, showing the
two backbone switches and fourteen LATA switches.
Within each LATA, traffic from the wire centers is concentrated
at tandem routers before being sent to the LATA switch. These
tandem routers are located at LEC central offices, usually those
serving a large number of exchanges. The number of tandem locations
is somewhat dependent on the model in use, but a typical
configuration is shown in Figure 3 for the Maine LATA (seven tandem
switches are shown).
Figure 1
National Data Network backbone.
The final level in the hierarchy consists of routers in the LEC
wire centers serving actual users. Access to these routers occurs
over the customer's local loop and can take various forms:
•
Dedicated local loop connected directly to data
terminating equipment,
•
ISDN local loop using D or B channel packet mode
access, and
•
Analog local loop used in dial-up mode.
Page 221
Figure 2
NDN LATA subnetwork (Northeast Region).
Figure 3
NDN tandem subnetwork (Maine LATA).
As stated above, the number of wire centers served is dependent
on the model being evaluated.
Traffic Model
A single, scalable traffic model was used to evaluate all three
physical network models (agency model, government model, NII
model). In the future, data applications will encompass all facets
of government operation, not only data center operations.
Consequently, the current LATA-to-LATA voice traffic distribution
of the government as a whole was used as the basis for the traffic
model. This reflects the level of government presence and
communities of interest within the country. The resulting traffic
matrix represents a generic approach to characterizing a national
traffic distribution.
Page 222
Within a LATA, the traffic was assigned to wire centers based on
the number of locations served (or, in the NII model, the number of
exchanges served). The base unit used to characterize traffic was
terabytes per day (1 terabyte = 1 million megabytes). As a
calibration point and a way to put the traffic units into
perspective, Table 1 gives the approximate traffic volumes for
existing and proposed networks.
TABLE 1 Traffic Volumes for Typical Networks
Network
Volume (terabytes/day)
Current FTS2000 Packet Switched Service
0.0075
Treasury TCS (projected)
0.1–0.4
March 1994 NSF Backbone
0.6
All FTS2000 Agencies
1.4–5.6
DOD Operational Networks
&223C;6.0
NII
>20.0
The current FTS2000 packet switched service (PSS) carries only a
small percentage of the civilian agency data communications
traffic; most of the traffic is carried over private networks using
circuits procured under FTS2000 dedicated transmission service
(DTS). The Department of the Treasury is procuring such a private
network at this time and has estimated its traffic requirements
over the life of the new contract. Analysis of current DTS
bandwidth utilization by agency indicates that Treasury represents
about 7 percent of the total FTS2000 agency requirement for
bandwidth. This includes Department of Defense (DOD) circuits on
FTS2000 but does not include the large number of DOD mission
critical packet switched and IP router networks. The volume of
traffic on these networks may be as large as the FTS2000 agency
estimate.
As a point of comparison, the March 1994 Internet traffic
traversing the NSFNET backbone is given.2 This traffic doubled in the past year
and shows every indication of increasing growth rate. Of particular
interest would be the amount of regional Internet traffic that
could use the infrastructure generated by the NDN for more
economical access and transport service.
The traffic volume generated by a mature NII cannot be
estimated; truly, the sky is the limit if any of the future
applications being contemplated grabs the imagination of the
general public.
This study used volume ranges appropriate to the physical model
under consideration. The agency model was evaluated at volumes
ranging from 0.006 to 0.5 terabytes per day. The government was
modeled as representing 14 typical agencies and was evaluated at
volumes ranging from 2 to 8 terabytes per day. Note that although
the government model had 14 times the traffic of the typical
agency, it utilized only 3.3 times as many wire centers. The NII
model extended the reach of the network to 5 times as many wire
centers; it was modeled as carrying the traffic of 8
government-size networks (16 to 64 terabytes per day).
Circuit Cost Model
The cost of circuits used in this study was based on the
current, maximally discounted tariffs for interoffice channels
(i.e., channels between carrier premises). Local channels were not
used since all switches in the study were located on carrier
premises. Rates for OC-3 and OC-12 were projected as mature rates
following the current economy-of-scale trends. Carrier projections
for these rates support this view. The five line speeds used for
circuits were as follows:
•
64 kbps,
•
1.5 Mbps (T-1),
•
45 Mbps (T-3),
•
155 Mbps (OC-3), and
•
620 Mbps (OC-12).
Page 223
Figure 4
Circuit cost model example.
Figure 4 shows the monthly cost of a 500-mile circuit at
different line speeds, illustrating the economies of the
higher-speed circuits.
Equipment Cost Model
The wire center, tandem switch, and LATA switch cost models were
based on high-end router technology (e.g., Cisco 7000). Serial
interface processors were used for link terminations. ATM interface
processors were assumed for T-3 links and above. ATM concentrator
switches in the future should exhibit cost behavior similar to that
of the router configurations. The backbone switch cost model was
based on high-end, wide-area ATM switch technology (e.g., AT&T
GCN-2000).
The one-time cost of equipment was amortized over a 5-year
period to obtain an equivalent monthly cost that could be added to
the monthly transmission costs. Before amortization, the capital
cost of the equipment was increased by 20 percent to account for
installation costs. Finally, a monthly cost of maintenance was
added at a rate of 9 percent of the capital cost per year. These
factors correspond to standard industry experience for these
functions.
Management Cost Model
Network management costs were estimated at 25 percent of the
equipment and transmission costs, based on current experience with
agency networks. Implementing management cost estimates as a
percentage assumes that network management will show the same
economy-of-scale effects as the other cost elements. In fact, large
networks will probably realize greater economies in network
management than in any other area. These costs are driven mostly by
personnel costs, which are relatively insensitive to traffic volume
and only marginally related to number of locations.
Results
The results of the analysis are presented here in two formats.
The first graph for each physical model shows the variation of
monthly cost with volume. The second shows the variation of unit
cost with volume. Unit costs are presented in cents/kilosegment (1
kilosegment = 64,000 characters).
Page 224
Agency Model
Figure 5a shows the variation of monthly cost versus volume for
the agency traffic model. The curve demonstrates the classic
economy-of-scale shape, although the effect is more discernible in
the unit cost curve presented in Figure 5b. The unit costs
predicted by the model at the lowest traffic levels are consistent
with the current unit costs for FTS2000 packet switched service,
which is operating at these traffic levels. It can readily be seen
that large single agencies can achieve economies with private
networks at their current volumes of 0.1 terabytes (TB) per
day.
Government Model
The monthly and unit cost curves for the government model are
presented in Figures 6a and 6b. The combined costs of multiple
single-agency networks comprising the same volumes are also shown.
Significant cost savings are achievable with a government-wide
network versus the multiple-agency networks. Unit costs at
government-wide volumes (2 to 8 TB/day) are approximately one-third
the unit costs realized using the volumes of even the largest
single agencies (0.1 to 0.4 TB/day). The economies achievable for
the smaller agencies would be much greater. A portion of the reason
for the substantial economies realized is the more efficient use of
facilities from the local wire centers up to the LATA switches.
With multiple-agency networks, a large number of inefficient,
low-speed circuits exist in parallel at the same local wire center.
With a shared network, the traffic on these circuits can be bundled
over more efficient, higher-speed circuits. The situation is made
worse if the multiple agency networks use switches on customer
premises rather than in wire centers.
NII Model
The relative economies in moving from government-size networks
to networks on the scale of the NII show a similar pattern (Figures
7a and 7b). The savings are not as great as in the previous example
since extra costs are involved in extending the reach of the NII
into all wire centers. Nevertheless, if the traffic increase is
assumed to be on a par with the increased coverage (8 times the
traffic with 5 times the wire centers covered), then the economies
are still there and the enormous benefits of full coverage are
realized.
The single NII network produces a 37 percent unit cost savings
over the 8 multiple networks comprising the same volumes. Note that
large increases in traffic from the wire centers already serving
federal government traffic could be handled at little additional
cost. This would be the case in most urban and suburban areas.
Investment Costs
The cost figures presented above represent the costs as
equivalent monthly costs, including the amortized cost of equipment
and installation. It is instructive to break the equipment and
installation costs out separately since these costs represent
capital investment. In particular, Table 2 presents the additional
investment required to carry increased traffic, given that a
government-wide network carrying 4 TB per day of traffic has
already been constructed. The investment in equipment required to
build a network of that size is approximately $160 million. While
substantial, this investment is commensurate with the estimated
investment made to provide FTS2000 services to the federal
government in 1988. These investment costs would be recovered
through service charges to the government.
Page 225
Figure 5a
Monthly cost—agency model.
Figure 5b
Unit cost—agency model.
Figure 6a
Monthly cost—government model.
Page 226
Figure 6b
Unit cost—government model.
Figure 7a
Monthly cost—NII model.
Figure 7b
Unit cost—NII model.
Page 227
TABLE 2 Additional Investment Needed to Carry
Additional Traffic (millions of dollars)
+4 TB/day
+12 TB/day
+28 TB/day
+60 TB/day
Government Model
34
67
123
199
NII Model
250
378
518
669
As Table 2 shows, additional traffic can be carried through the
same wire centers that serve the government with little additional
investment. Additional capital is needed to expand toward a fuller
NII infrastructure that would require 5 times as many wire centers
to be covered as are covered in the government network. However,
the government network would still provide a significant jumping
off point for the complete network. For example, an NII network
serving all wire centers at 8 TB/day would require an investment of
$410 million in equipment ($160M for the first 4 TB/day through the
government wire centers plus $250M for the additional 4 TB/day
through the remaining wire centers). The government network would
have already caused 40 percent of that investment to be made.
The largest portion of the investment and monthly costs is in
the access areas of the network, the portion that is normally
provided by LECs. This reinforces the point made above in this
paper that the shared network concept must be extended all the way
to the user. It also points out the need for uniform standards for
interfaces and switching in all regions (a minimum requirement for
any open data network).
Conclusions
Three major conclusions can be drawn from the analysis presented
above:
•
The infrastructure costs of a National Data
Network show a marked economy-of-scale effect at the volumes
represented by the federal government data communications
traffic.
•
Significant economy-of-scale benefits can be
achieved by aggregating agency requirements onto a common
network.
•
The infrastructure created to support federal
government requirements can significantly reduce the cost of
extending service to larger communities in the public interest.
The savings resulting from the NDN approach are substantial
enough to justify the complexities of an aggregated procurement
(coordination of requirements, security, standards). Such a
procurement would have to be carefully structured to harness the
competitive forces necessary to motivate both local and
interexchange carriers to pass on the cost savings shown above
through lower prices. The end result would be a quantum step
forward for the government and the country on the road to the
information technology future.
Notes
1. Computer Science and Telecommunications
Board, National Research Council. 1994. Realizing the
Information Future: The Internet and Beyond. National Academy
Press, Washington, D.C.
2. Computer Science and Telecommunications
Board, National Research Council. 1994. Realizing the
Information Future: The Internet and Beyond. National Academy
Press, Washington, D.C.
