If your principal carrier is the one that starts with either the letter "A" or the letter "V," then you've already been asked to broaden your relationship with them, or you will be asked to do so soon. I guarantee it.

These guys didn't roll up national interexchange networks, legacy Bell telcos, and comprehensive wireless footprints for no reason. They want it all. In their mind, they paid big money for all this (never mind that a lot of it is sunk investment from ages ago or, like Verizon's purchase of MCI, was basically a fire sale), and they want a big return. Besides that, A wants to shut V out of your company for years to come, and vice-versa.

One big consequence of all this is a growing concern that we at TC2 and LB3 call the Lowest Common Denominator Problem. As a general proposition, the broader the demand set you put out to market at the same time, the better the deal you can get. But that's only really true to the extent that the components of the demand set are logically related.

The reality is that local, national, global, wireless, and managed services markets still have distinctive terms, pricing mechanisms, and competitor line-ups. If the only commonality among all these markets is that the same parent company has an entry into them, then what may happen when you mash them all together into one broad contract relationship is a deal that features the worst -- not the best -- practices that the carrier can throw into your terms and conditions.

Interestingly, the ways in which smaller carriers are attempting to break into these markets can also create their own Lowest Common Denominator issues. That's because of the new technology choices that they have to promote to get your ear.

Areas in which smaller carriers and alternate suppliers are obviously trying to break in include SIP Trunking, Cloud Computing, local and national Ethernet, and 4G wireless such as the Sprint/Clearwire WiMax initiative. All of these have the potential to dramatically lower costs and/or create breakthroughs in end-user access and network experience. But they compete against legacy systems and services that virtually guarantee data network throughput, or provide advanced call center features as a matter of course, or ensure that you can reach an emergency number from any phone.

Experience has shown that large enterprises will not embrace new technologies until they provide rich feature sets and something very near the network performance level of the technology it's replacing. If a large business happens to accept a trial service that only provides a Lowest Common Denominator of voice or data throughput, it won't completely roll it out until features and performance match up well against its legacy services.

This phenomenon as it applies to the technologies, contract practices, and supplier choices of 2010 going into the 2011 is a major focus running throughout CCMI's upcoming Telecom Negotiation Conference in San Diego. New sessions and new content will address these issues in a way you simply won't get at even the best of the "trade shows." For each issue you'll get a specific look at the trade-off between embracing new practices vs. falling into a Lowest Common Denominator trap.

At the conference, LB3's Joaquin Gamboa and Marc Lindsey will speak from experience on cloud computing. That's an unavoidable hot topic -- you need to identify the key issues that set cloud computing deals apart from traditional telecom and IT transactions. Marc and TC2's Ben Fox will speak on the crucial connection between MPLS and SIP Trunking, and give the specifics on MPLS/SIP product structures, pricing models, and contractual considerations you'll need to move forward.

I'll be speaking in tandem with LB3's Ellen Block and TC2's Jack Deal about the crucial connections between SIP, unified communications, and the often-confusing world of "deals" for local wireline service provided by incumbent (and thus near-monopoly) providers. That's an area that Ellen notes is especially susceptible to the Lowest Common Denominator problem when the big, integrated carriers try to transfer their monopoly-related terms to the historically competitive national interexchange market.

I will also host a special Day 2 breakfast session called "Matching the Players to the Project" which will unravel the trade-offs between throwing all your business to a big carrier vs. considering specialized players for key services. That's a product of both the Lowest Common Denominator problem and the unmistakable fact that AT&T and Verizon are around for good while many other carriers still strain for financial resources.

That's just a sample, and a look at the full agenda will give you a view to its direct relevance to your current challenges and upcoming decisions. One note: As conference chairman Hank Levine often remarks on site, the conference plate is very full and, as a result, we have to include multiple breakout sessions toward the end of the two days. So you may encounter conflicts in getting to every session you want (including a couple I've mentioned here).

The best way to solve that problem is to bring a couple of people from your company. We've noticed a recent trend where, when established enterprises give a new person telecom responsibility, one of their first steps is to send them to this conference, or to bring them along with a more experienced person. Check out conference organizer CCMI's reference to Team Discounts on the registration page and call the number there for details.

I look forward to seeing you in San Diego!

I recently received a Wall Street analyst note that read for all the world like it was 1999, not 2010. The analyst at JP Morgan was assuming coverage on an alternative local carrier and assigning it an "overweight rating" (translation: BUY). He said that the carrier's "recent initiatives are expected to benefit growth" and its "valuation favors upside."

And in a familiar echo of hot-telecom-stock days gone by, the analyst said of the carrier: "We believe it can achieve double-digit compounded EBITDA growth over the next five years." Even if that's only Wall Street babble to you, doesn't that just sound like the go-go CLEC days of yore?

So here now is the twist: The carrier in question is Cbeyond, one of the new breed of SIP-centric carriers targeting small and medium-sized businesses that we've mentioned in the past. These companies are far from the old CLEC model, where many alternative carriers without last-mile facilities were basically attempting to sell themselves on price and service vs. the Bell companies (while often fighting them in court). Cbeyond and a group of others add new technology to the mix -- the SIP trunking methodology which attempts to supplant traditional telephone trunks.

Perhaps this proves the truism that it takes a new technology, not just a theoretically competitive business plan, to bust markets open. Now, the analyst, Mike McCormack of JP Morgan, didn't burden his readers with the technical details. In fact, he didn't even refer to SIP per se. The way he put it was that Cbeyond "operates an IP-based network through which it delivers integrated voice and data services," which is a good enough explanation for Wall Street.

McCormack also credited Cbeyond with offering a "large business approach to the small business market," noting that it offers "popular calling features" to small business. While of course what Cbeyond offers isn't really an enterprise package -- what a Fortune 500 business needs for its call centers is hardly the features he's talking about -- I'll grant him poetic license within his sphere of influence (institutional investors).

And to McCormack's credit, we're hardly talking about a stock call like the old days, where an analyst would take a $50 stock and predict it would zoom to $250 (usually before it fell to $1 or $2 a share). Cbeyond was trading around $13 a share at the time of McCormack's report, and McCormack (who actually has quite a good track record) set a yearend 2010 target of $18 a share for the stock. Hardly something to spawn new stock market billionaires!

The point is that there's renewed telecom attention in the investment world driven by the unmistakable battle now unleashed over true, full-featured POTS vs. IP voice for business. As is often the case, in some ways it may be easier for smaller customers rather than larger ones to take the first advantage of the new wave. But when even a chastened Wall Street is dusting off old analytical methodologies in service of a technology that's actually sticking in the marketplace, you know that SIP trunking isn't going away. Up and down the ladder of customer size, from small business to multinational enterprises, SIP is now in the mix.

The FCC's release this week of its National Broadband Plan inherently affects the issue of Universal Service surcharges. FCC officials have gone on record saying that for "universal service" to continue to make sense, at some level it has to refer to broadband, not POTS.

Only one of the four current universal service programs -- the "E-rate" program that provides support to schools and libraries -- explicitly pays for broadband connections. The other three programs -- for "High Cost" areas with many subscribers far from central offices, for low-income consumers, and for rural healthcare facilities -- are still basically telephone subsidies.

The core proposal in the National Broadband Plan is to shift the High Cost program from POTS to broadband, so that people in low-density areas have access to at least one broadband provider, rather than worry so much about whether they have a long copper tail to the CO. But the plan literally lays out a 10-year timeline for achieving this. In several phases before this happens, the plan advises the FCC to create yet new programs, such as a Mobility Fund that would assist areas to obtain 3G and higher wireless coverage where there currently is none.

Clearly that implies that the FCC will have to broaden the universal service revenue base, so that more services are captured under the surcharge (which increases pressure on the carriers to pass along the charges). But oddly for a 376-page report, the National Broadband Plan, when it comes to stating exactly how to do this, simply repeats longstanding USF reform proposals as possibilities (such as charging USF not as a percent of revenues but per phone number or a data connection of some size), rather than formulating a complete USF reform proposal of its own.

That's partly because the plan doesn't actually have the force of law, and isn't a document "voted" on by the full five-member FCC. Instead, both the FCC as a full panel and Congress are supposed to read it, debate the proposals, and eventually act on it. I probably don't have to tell you how complicated, uncertain, or simply futile that can sometimes get!

Thus, for right now, despite the hoopla over the plan and other telecommunications-related provisions of the federal stimulus, we still have the USF system we're stuck with. And both current pressures and forward-looking ideas point to broadening of the services to which surcharges apply.

Indeed, the whole surcharge issue is notable for the sense of powerlessness it can provoke in even sophisticated telecom managers. It would be wishful thinking to suggest that you can simply demand the non-applicability of all new charges when the carriers are bound and determined to pass along what they think they must in today's more complex and uncertain surcharge environment.

Instead, think of all the latest developments as shifting the boundary of where you have the right and obligation to put your foot down. With universal service moving past legacy voice and data, it's now appropriate to be somewhat more aggressive than before and start drawing some distinctions, as follows:

-- Selective knocking out of surcharges. A "best in class" procurement will at least make carriers justify the applicability of surcharges to all services. Try to capture some of these in the contract -- the more specialized the service, and the less justifiable the surcharge, the more likely you are to get a waiver or credit. You might be able to get a contract-term guarantee of no surcharges on an Ethernet service, for example, much more readily than an entire MPLS network, and it's easier to fight the nakedly greedy property tax and regulatory administration surcharges than E911 or USF.

-- No retroactivity. Let the carriers' current conundrum over whether they'll have to go back and pay retroactive surcharges on their MPLS or other revenue bases be exclusively their problem. Make sure to get a no-surcharge-retroactivity guarantee for all your services. Definitely watch out for explicit statements that retroactive pass-alongs will be allowed (Sprint, for example, has been doing this).

-- Look for offsets, but in the right way. You can actually play recent developments to your advantage, in that the carriers' typical insistence of the right to impose new surcharges in mid-contract term can lead you to say pre-emptively that you need lower rate element charges just in case. Be wary, though, of overly clever carrier responses to this idea. We're hearing talk of carriers "pre-bundling" rate element and USF charges in a way that ostensibly freezes the USF pass-along at its current rate. That's fine if the resulting bundle really captures a market rate for the actual network element (e.g. ports or circuits), but "bundles" have a funny way of not actually doing so. Consider asking for credits, but the same caution applies -- there's a right and wrong way to do credits, as discussed at our recent Telecom Negotiation Conference.

Next week I'll look at how all of these factors are beginning to play out in one of the most important new services available -- SIP trunking. The differences in how carriers are handling this are already becoming object lessons in the application of USF to VoIP, IP-network access over dedicated Internet or MPLS, and other elements we've discussed. Almost no issue is more subject to the quality of the design of an RFP than the surcharge results on new services like SIP. It's worth the effort to understand it, and in the meantime feel free to shoot me questions and comments about this whole arena.

Frame relay users are becoming a diminishing breed, even at AT&T. In a little-noticed statistic buried in its fourth quarter earnings report, AT&T said that two-thirds of its frame relay customers have migrated to IP-based services.

And that could have implications for the types of services -- even IP services -- that begin to generate the ever-rising USF surcharge pass-along where they never have before.

Let's see why that is. First, AT&T put a rather distinctive spin on the frame relay news. Here's how they reported it: "Two-thirds of AT&T's frame customers have made the transition to IP-based solutions, which allow them to easily add managed services such as network security, hosting and IP conferencing on top of their infrastructures."

That's an interesting way of putting it, especially when you consider that AT&T's primary platform for ex-frame users over the last few years has been the AVPN un-managed MPLS service. I'm particularly amused by the part about "easily" adding managed services, where AT&T cites the kinds of managed services that happen to add to AT&T's revenues.

Funny, I thought that users would like to "easily" add to their IP and MPLS services such rigorous VoIP networking services as SIP trunking. You know, the kind of additional service that would subtract from some other part of AT&T's revenue set, like local telephony infrastructure. But clearly, AT&T is looking for a way to make IP and MPLS mean "more money," not less.

And that's where the USF surcharge issue starts to intrude. One thing that the furious competition between AT&T and Verizon for national and global MPLS deals has kept at bay is the threat of USF pass-throughs on interstate MPLS revenues. But once the competitive bidding is out of the way, we could see these moves begin to creep in.

In addition, all of the interexchange carriers have to be on pins and needles about recovering USF charges on MPLS because of steadily increasing pressure from the FCC about counting MPLS elements in their contribution base. That's happening as the legacy revenue base of traditional telecom services generating the surcharge continues to contract -- the very issue that is forcing the contribution factor percentage ever-higher.

Remember how the shift from a non-surcharged to a surcharged service comes about. It's a continuum, not a single discrete event, because whether carriers pay the surcharge to the fund, and then pass it along to you, are two separate questions with several inputs each.

As LB3's regulatory lawyers have pointed out, even before USF on MPLS ever became an issue, the carriers could have reported interstate MPLS revenues, based on their own judgment that if frame relay was basic telecommunications, so was MPLS. Then, early last year, the FCC suggested MPLS as a service to be reported by adding it to its examples of the type of basic telecommunications" revenue carriers needed to include on their 2008 reporting forms.

Now the FCC appears to be something close to demanding MPLS revenues both now and in the past because it needs 14.1% of the money -- whoops, 15.3% as of April 1! -- especially as MPLS has become the flagship data networking service for enterprises.

Plus, consider this: AT&T recently placed a note in its Service Guide that its Ultravailable Network Service will start generating the USF pass-through on April 1. One of my LB3 colleagues labels this a form of "self-confessing" the applicability of the revenues of a relatively specialized service (in this case, high-capacity wavelength technology) to the Universal Service regime. It's circumstantial, but it's an example of how AT&T (and potentially others) may become quicker to add other, more widely deployed services to the universal service revenue base than they have in the past.

Thus, once the bulk of frame/ATM users have chosen their MPLS carriers and signed up for multiyear contracts, both AT&T and Verizon could lose their inhibition about tacking on USF for the MPLS ports and Class of Service charges. In competitive bidding, such a move will have the effect of raising the price of these elements by 15.3%. That's something neither carrier has been willing to do when worried about losing a deal to the other mega-carrier. But when that fear is gone, the surcharge pass-along could be on its way.

Before assessing how to deal with all this, there's one final input -- the effect of the FCC's newly released National Broadband Plan that appears to redraw universal service around the ambitious (and expensive) notion of universal broadband access. I'll take that up next!

In the following guest post, TC2's London-based managing director Ben Fox continues his comments about the Mobile World Congress in Barcelona.

Besides the increasing momentum for establishing LTE as a global mobile broadband standard, the other very interesting announcement from Barcelona came from Verizon Wireless and Skype. The two companies reported that, beginning in late March, Verizon Wireless will allow subscribers to use Skype's IP voice application over its network.

By downloading the Skype application to their Verizon Wireless smartphones, end users will be able to call other Skype users around the world for free. This represents a significant change of heart from a carrier (and indeed an industry) that to date has been very territorial in terms of allowing users to take advantage of applications that could reduce its own revenue.

So what's in it for Verizon Wireless? The answer is data revenues. As I noted last month, Verizon Wireless' strategy is currently focused on driving the penetration of data services. And for Verizon Wireless users to be able to use Skype, they will need to subscribe to a voice and data plan.

No doubt Verizon Wireless has calculated that the lost voice revenues from Skype usage will be more than offset by the increased data plan revenues and by the increased adoption of the smartphones that will be needed to use Skype, which typically drive increased average revenue per user (ARPU) compared to more basic devices. Perhaps they're even anticipating a further compensation for lost voice revenues in the increased revenue from the higher ETFs associated with these types of devices and plans!

Skype and Verizon Wireless stated that their agreement is "exclusive", although it is unclear what that really means, since the Skype application has been available for some time on AT&T Mobility's network via the iPhone. Perhaps Verizon Wireless's thinking is that AT&T users have so far only been to use Skype over WiFi, not 3G, access. But a version that operates on GSM/HSPA is supposed to be pending.

Of course Skype does not tend to be an application that large enterprises actively roll out and support for their end-users, so this might have limited initial relevance to business users. However, using Skype (and similar VoIP applications) on a smartphone whilst roaming on WiFi networks to save money, compared to paying $1+ a minute to roam on a GSM network in a foreign country, is a far more intuitive and "traditional" phone experience than using a soft phone (Skype or otherwise) on your laptop. So there is certainly money-saving potential in this area for enterprise customers.

But the more important takeaway for the business user from this Skype/Verizon Wireless announcement is the continuing shift in focus for wireless carriers all around the globe from voice revenues to data revenues, driven by the evolution of all cell phones into smartphones. Similar announcements in 2010 already include Google's Nexus One, Windows Phone 7 for mobiles, the Wholesale Applications Community mobile application alliance, and carriers announcing increased after-sales support for smartphone users. These all demonstrate the importance of smartphones to the carriers and the pressure that all carriers, manufacturers and software developers are under to get ahead of the pack and differentiate their smartphone service offerings.

Although much of the initial adoption of the more innovative services (such as the iPhone and Apple's application store) has been driven by consumers, the carriers, manufacturers and software developers now have business users firmly in their sights. Google has already been talking about a version of its Nexus One aimed at business users, and in the UK, Vodafone is specifically targeting business users in its iPhone adverts.

The bottom line is that we are already seeing business end-users at our clients pressuring their telecoms departments to offer an increasing array of smartphone devices, not the least of which is the iPhone, as well as a rich variety of new services and applications. A BlackBerry that only provides voice calling, email, calendar and contact directory functions is no longer enough! Mobile device management, rather than getting easier, will become exponentially more challenging.

On the other hand, when the world ultimately moves to a single global mobile standard -- LTE -- the job of managing your enterprise's global mobility requirements should become somewhat easier, though I'm afraid that the impact of LTE will be a ripple on the ocean compared to the tsunami of challenges presented by user demands for an ever increasing range of smartphone applications and functionality.

For as long as anyone can remember, AT&T has been the carrier that's held on the longest to legacy products. In recent times, AT&T has been happy to let users continue to subscribe to its global business dial-up Internet service until they're ready for AT&T's broadband virtual tunneling service. AT&T has also let corporate WANs sail along on frame relay without putting out a marker on ending frame relay orders or contract renewals, as first Sprint and then Verizon have done.

And there will probably be some companies using AT&T for straight-on, long-haul, T1/T3 private lines in the year 2030 just as in 2010.

So it was jarring when AT&T grabbed some publicity at the end of last year with what looked like a request to the FCC to retire the public switched telephone network. AT&T severing itself from POTS, or Plain Old Telephone Service? It didn't seem right.

Understanding AT&T's about-face on maintaining legacy networks requires an understanding of the concept of financial harvesting. One of the best illustrations of harvesting came during an odd period in telecom carrier finance back in the mid-1990s -- basically a few years before and after enactment of the Telecommunications Act of 1996.

Back then, the Internet was emerging in its browser-enabled incarnation as the World Wide Web, the corporate telecom deal culture was thriving, and TV airwaves and telemarketing lines were buzzing with pitches for 10-cent, 7-cent, and 5-cent long distance minutes. Yet when AT&T held its quarterly earnings conference calls, the first question Wall Street analysts would invariably ask was why AT&T had only raised its basic, no-plan long distance rate from 25 cents a minute to 26 cents, not 27 cents. Wouldn't Aunt Mary from Kalamazoo, who would never in a million years switch to MCI or Sprint, overlook a larger increase and happily pay the bill?

AT&T was essentially harvesting its no-plan customers for a revenue stream for as long as these customers existed. And the analysts, almost to AT&T's annoyance, wanted them to do even more of it. Not until somebody rang a bell around 1997-1998 and the analysts realized that AT&T had to compete elsewhere for voice and data business did the harvesting issue start to fade.

Now look at AT&T's situation today. AT&T Mobility is thriving and sales of the iPhone are zooming. AT&T's share of the enterprise networking market is basically what it's been for years, and with the decline of Sprint it's even threatening to establish a virtual duopoly with Verizon.

But AT&T's consumer telephony business seems to be slipping away. Like the incumbent local businesses of Verizon and Qwest, AT&T is losing residential landlines at a remarkable pace, now edging close to 1% a month. The result is the reverse of harvesting: AT&T says it's bleeding from the need to maintain all-copper loops in a mass market that's beginning to reject them, and it wants to get out rather than stay in as long as possible.

Of course, AT&T, Verizon and Qwest get some of their landline customers right back when the same households buy their broadband packages. And the broadband and telephony customers that the cable companies win instead represent fair-and-square marketplace losses for the telcos. But that only seems to reinforce the reverse-harvesting instinct, feeding AT&T's argument that it needs to massively shift resources.

Aside from the fact that AT&T in the meantime hasn't lost its near-monopoly dedicated access business in its local territories, here's the problem with simply accepting AT&T's conclusion that the PSTN should be retired: From a business user standpoint, there's a little more to the legacy network than consumer migration to cell phones and broadband. As our friend Eric Krapf of VoiceCon/NoJitter has already pointed out, AT&T hasn't quite defined the PSTN to be retired, leaving us to assume they mean everything. But what about Class 5 switches and their unique functionality that's still in the process of being emulated in various VoIP services? What about the fact that many of the poles, trenches and conduits are the same for both older and newer services?

And what about all the people who make calls to the businesses who make up the enterprise market? If they don't have a cell phone or a broadband triple-play package, are they out of luck, and your business out of a sale?

Many business customers would benefit enormously if AT&T does what it says that PSTN retirement will free it to do: help create universal, affordable broadband. Widespread remote-agent call center functionality, broad-based telecommuting, and many facets of unified communications do rely on a pervasive broadband network.

But it's important to realize that AT&T is responding in a classic "lobbying" fashion to the current broadband stimulus, which requires the FCC to develop a national broadband plan. In effect AT&T is saying that if there has to be universal broadband, there can't be universal narrowband. That's either one of those unintended consequences that can result from regulatory initiatives, or an unproven assertion of investment motivation by an experienced Washington player.

At this point I think there are two key things for corporate telecom professionals to remember. One is that AT&T, with all of its legacy pressures and characteristic behavior patterns, has many piece-parts. In this case we're clearly talking about an AT&T whose heart is the former RBOC SBC, not the former interexchange giant.

The other is that some of the regulatory nuance got lost in some of the initial reports. What AT&T is supporting, in the context of a question posed by the FCC, is the initiation of a Notice of Inquiry about the PSTN, which is a more preliminary proceeding than even a Notice of Proposed Rulemaking, which itself has many procedural checkpoints before it results in new rules. It's unlikely that AT&T really wants to lose all its POTS customers in one fell swoop right now. More likely, it's just drawing a line in the sand.

So we'll have some time to watch this, and the market will invariably shift more along the way. Let me know if you have thoughts of your own on this fascinating matter that threatens to turn the tables of telecom history upside down.

Avaya came out with its product roadmap for the acquired Nortel base this week, and you could summarize it like this: We'll give you lots of space at the beginning of the year, provided you're playing ball with us by the end of the year.

Avaya is cutting off nobody in the Nortel PBX base -- at least, nobody whose Nortel product hadn't already begun down the end-of-sale, end-of-support trail. And it's declaring its own end-of-sale only on some supplementary products like the Nortel MCS 5100, a multimedia communications server providing audio and videoconferencing, collaboration tools and the like.

On the core question of what to do with Nortel's IP PBX flagship, the Communication Server 1000, Avaya's immediate plan is to follow on Nortel's post-bankruptcy Release 6 with more upgrades of its own over the next 12-18 months. But this looks like a time-delimited strategy.

Some experts think there will be two more CS 1000 full releases over the 12-18 month period. Others, such as Stephen Leaden, who gave an excellent webinar yesterday on the Avaya-Nortel roadmap for our friends at The Voice Report, thinks there will be only one. After this initial year or year and a half, Avaya has made it clear that CS 1000 users will have to begin "layering on" Avaya's own Aura platform to stay current.

Aura is Avaya's new unified communications architecture that incorporates a SIP Session Manager to handle supported applications, including SIP trunking carrier services. As we've discussed, those services can eliminate many traditional voice trunks in favor centralizing voice streams over a corporate MPLS network with an expedited-forwarding, or real-time, class of service, and then out to the public as necessary (or the reverse in the case of calls into contact centers, including those taken by remote agents logged onto the network).

But as you can imagine, the common challenge in all of the Nortel users' roadmap options is enterprise capital availability. Leaden explained that during 2010, Nortel users theoretically have three choices -- wait and consider, begin investigating an investment in Aura (which was designed for interoperability with other vendors even before Nortel's downfall), or begin due diligence on a move to another vendor (such as Cisco, Siemens, etc.). But by 2011 that's really squeezed down to the last two options due to the timeline Avaya laid out.

There's a lot more to the Avaya-Nortel roadmap, and I encourage you to check out the replay of the Voice Report webinar especially to learn about the other products in play. What I personally found fascinating were repeated references to exactly how Avaya will be presenting investments in the Aura platform to Nortel users. It's clear that Nortel users will be hit with ROI and payback analyses, and that Avaya will load in benefits that are dependent on other parts of an enterprise's telecom "ecosystem."

Leaden listed not only items such as centralized voicemail and unified messaging but also the trunk consolidation benefits from SIP trunking as likely inputs into Avaya ROI models. No doubt Avaya will use rosy ROI assumptions to push Aura on the Nortel users, including theoretical savings from the maximum amount of eliminated or consolidated telephony infrastructure.

Of course, it's ultimately up to AT&T, Verizon or others to propose such complete exchanges of traditional rate elements for dynamic VoIP call allocation in their own SIP trunking proposals. But think about the size of Nortel's base. Avaya's plan means that a huge number of telecom buyers will be getting proposals at a time of unusual urgency -- after their major equipment supplier has been bought out of bankruptcy -- in which the new vendor will be highlighting the maximum savings that a carrier should be offering them in service of the new equipment vendor's roadmap.

An insta-poll taken during the webinar showed that 48% of the attendees with Nortel gear (and there were at least 230 live users on the conference) are initially inclined to go the "due diligence, find another vendor" route. So I'm sure Avaya won't be shy about its ROI claims for Aura, including what it thinks the carriers can do!

Like the pressure-from-below that I recently highlighted in the smaller carriers' discovery of a potential gold mine in SIP trunking, this Avaya-Nortel transition will thus provide another pressure point on the big carriers to make solid VoIP/SIP trunking deals. At some point soon, a little roadmap discussion of your own with current and prospective carriers on this matter could prove quite rewarding.

A growing number of large enterprises are reporting various experiences in sounding out and testing AT&T and Verizon on SIP trunking services. The big carriers are moving at sometimes uncertain speeds to completely leap into the market with aggressive proposals that actually leverage the replacement of legacy elements in their own incumbent infrastructure.

But there's no question about the speed of SIP trunking's ramp-up at the other end of the carrier market -- the small-business CLECs and alternative carriers. One after another they are jumping head-first into the SIP trunking pool. And if past experience with new carrier products is any guide, you'll be hearing about sales calls from these companies to your business units and branch offices, no matter how many protections you have in place for who's authorized to buy telecom services.

A key point came in early December with the announcement of SIP trunking from XO Communications. XO is a fixture in the telecom industry that's hung on through Chapter 11, mergers, technology migrations and strategy shifts. It's primarily seen in the small business market, although it has a clear strategy to move substantially into the middle market and occasionally provides circuits or hosting to large enterprises (and would like to do more).

But XO is hardly alone. Individual companies with no particular play (yet) in the enterprise market, and much less of a legacy in the 1990s CLEC boom and bust, are clearly putting SIP trunking front and center.

Speakeasy out of Seattle, which began as an Internet cafe company and is now actually part of Best Buy, offers an "Integrated Voice" package that neatly offers SIP trunking provided you have an IP PBX at a centralized voice location (or old-fashioned PRIs if you don't).

Cbeyond out of Atlanta offers what it calls its BeyondVoice with SIP service, boasting its early role in helping develop the "SIPconnect" standard. SIPconnect, as we've previously discussed, is a kind of global certification label that IP PBX makers and carriers can use to specify that they adhere to a certain approved subset of SIP procedures, and may be appropriate for locations without large-enterprise, mission-critical requirements (like full-featured contact centers) or strict testing requirements.

And our friends at Network World just reported on the new "Dynamic Office" service from Windstream Communications based on SIP trunking. This one is particularly intriguing because Windstream is actually an independent ILEC -- an incumbent, not alternative, local carrier based in North Carolina that serves areas that the big incumbents either never served or offloaded.

Clearly there are some cautionary items with regard to these new services. Most small SIP trunking carriers will in fact rely on SIPconnect or other methods to ensure compliance rather than engage in individual carrier-PBX certification tests. Some of them don't offer MPLS, so what you're basically buying is integrated voice-data access over dedicated Internet lines to bring voice streams from branch offices to the SIP trunking core and out to the public network.

And you have to be aware of any alternative carrier's financial status -- XO, for example, has an odd set-up where it's 89% owned by Carl Icahn and his affiliated companies. It's still not really profitable and probably not independently viable without this single backer, which doesn't need to be a large concern until you start using them strategically rather than tactically.

But all of these SIP trunking carriers are leveraging the now solid penetration of pure IP PBXs from Cisco, Avaya, ShoreTel and others. And they're certainly less beholden than the big carriers to separate voice trunks, unconverged dedicated access lines, and old ISDN infrastructure. It's great to see them pressuring the market from below, and that can only bode well for the acceleration of SIP trunking into the large enterprise market in a truly competitive, financially compelling way.

Most corporate telecom managers have a pretty big to-do list for 2010. For many of you, that list includes deciding what to do about your Nortel voice equipment, and when to do it.

Last Friday, Avaya closed its $900 million deal (including debt) to buy Nortel Enterprise Solutions out of Nortel's bankruptcy. Avaya then scheduled a January 19 video webinar to explain its roadmap for the combined product set. But prudent managers are already laying the groundwork for communicating throughout their telecom and IT organizations the directions the combined Avaya/Nortel may well take.

Obviously Avaya is in the driver's seat, and it's helpful to know their corporate thinking as well as their product leanings. Avaya, which is an enterprise equipment/software pure play that was formed out of successive spinoffs from legacy "Ma Bell" type organizations, is currently privately held. But almost everyone believes that Avaya's private-equity owners, Silver Lake Partners and TPG Capital, want to bring the company public again as an exit strategy for themselves.

With Cisco gaining rapidly in voice market share, the Nortel buy was necessary for Avaya to ensure that it comes to the financial markets as the No. 1 vendor for corporate voice gear and unified communications. In particular, as PBX market share guru Al Sulkin has explained at recent VoiceCon events, Avaya/Nortel can still lay claim to dominating the contact center market, where enterprises have been less eager to move to new vendors. Avaya and Nortel still add up to half the market for call center premises switches/software, with Cisco and Genesys taking about 15% each and others battling for the rest.

So Avaya is hardly likely to thumb its nose at the big Nortel base during the period it presents its case to the financial markets (and it is hiring 6,000 Nortel employees). But promises to maintain duplicative product sets for a long time won't earn Silver Lake/TPG a big stock market payday either.

Many if not most observers draw a distinction between users of Nortel's venerable PBX product, the Meridian 1, and its next-generation IP PBX platform, the CS (Communication Server) 1000. Some observers are advising Meridian 1 users to order crash kits and all the spare parts they can find, although the Meridian installed base is believed to be big enough in enough important places for Avaya not to do anything hasty.

As far as the CS 1000, Nortel made a show earlier this year, even after its bankruptcy filing, of introducing a comprehensive Release 6 with notable features such as, for big financial institutions in the capital markets, a SIP-based turret system. Some PBX industry watchers are speculating that Avaya will likely provide full-scale support for CS 1000 for 2-3 years, although that presumes being current on the releases.

All this is taking place at a time when Avaya is rolling out its own distinct architecture called "Aura." It's a sort of bridging technology where Avaya uses SIP as a session manager to interoperate with its own and other (including Cisco) gear across multiple sites and a wide range of applications, including many that are critical to call center managers. But how far this goes in pulling Nortel platforms into the fold permanently -- or, alternatively, drawing Nortel users to core Avaya platforms -- is something Avaya officials will have to explain in their January 19 show.

You could say that in the Nortel situation we have a "consequential bankruptcy," one that isn't simply a reorganization of the company but a wholesale reordering of the market. In Internet discussions, many users have actually lauded parts of Nortel for engineering prowess that they view as superior to Cisco's (for some things) and Avaya's (for others), and ex-Nortel and Bay Networks employees can be found saying the same thing. But the center didn't hold, and here's a hat tip for an old colleague of mine at the trade publication Network World, Jim Duffy, who earlier this month wrote a very informative (and morosely entertaining) article documenting the systematic dismantling of Nortel in bankruptcy.

In short, there was something about the organization as a whole that just didn't work once the new IP era came along. As we say good-bye, apparently for good, to the venerable old "Northern Telecom," outside players will be writing the script for the users of its products, starting very soon.

When you go to install a new wide-area network technology that involves the interaction of carrier trunks with your premises equipment, do you:

a) trust statements of compliance by all parties with the technology's open standards;

b) look to the carriers and equipment vendors involved to certify that each other party's specific service or gear works with theirs, or

c) do you own interoperability tests?

This question is very much alive when enterprises go to buy "SIP Trunking" services from carriers. These services essentially make VoIP full-featured for corporate on-net and off-net calling, and reduce or eliminate dedicated local and long distance trunks in favor of dynamic allocation of packetized voice streams over data networks such as MPLS real-time classes of service. To do so, SIP Trunking relies on a set of IP standards that tell carrier networks, PBXs and other gear how to interpret call set-up instructions, signaling and other commands.

But like many standards, the Session Initiation Protocol itself and the SIP Trunking methodology that derives from it can be subject to interpretation and options. That can make things dicey when you consider what it's replacing -- TDM voice trunks, often into mission-critical call centers with call-transfer feature functionality, PRIs, national enterprise dialing plans, and the like.

If anything, SIP is particularly prone to this standards-extension challenge. At one of my VoiceCon sessions on SIP trunking earlier this year, one of the panelists said he had done a word search of IETF RFC 3261, the main (though not only) SIP standards document. He found that the word "may" showed up 378 times in the document. So much for a "standard" telling everybody in the industry exactly what to do!

The decisions that each vendor makes around these SIP choices is critical to what the industry labels interoperability but really means the kind of feature transparency that enterprises must have. To bring it home to many corporate telecom managers, there are functions such as "SIP Refer" and "SIP Redirect" defined in the standard. If the implementation of these items doesn't emulate what call center managers have traditionally known as AT&T's Transfer Connect, Verizon's (previously MCI's) Take Back and Transfer, or Sprint's Agent Transfer, no amount of theoretical cost savings is going to be worth it for most enterprises.

When you go to investigate SIP Trunking and ask about this kind of interoperability, you're bound to hear about the SIPconnect certification process established since 2005 by the SIP Forum's IP PBX and Service Provider Interoperability Task Force. Any vendor's compliance with SIPconnect 1.0 or the emerging SIPconnect 1.1 guarantees a certain degree of out-of-the-box interoperability.

And certain specialized, CLEC-type carriers have built a business around SIPconnect. They go primarily to smaller businesses and tell them that their locations can probably go straight to SIP Trunking and full-featured (for them) VoIP even with a wide variety of telephone equipment, including many older TDM switches.

But for larger customers, Verizon and AT&T make a point of doing their own SIP interworking tests on IP PBXs and then publicly "certifying" specific key vendors such as Avaya, Cisco and Nortel on their flagship families of IP communications gear. They don't just rely on SIPconnect, partly because SIPconnect makes certain choices on SIP Trunking options that may not agree with some enterprise advanced features.

That's why, when you go to Verizon's page for IP Trunking Services, you'll see "fact sheets" and "solutions briefs" speaking to relationships they've established with Avaya, Nortel and others to bring SIP trunking to the market. These are really references to interoperability tests but speak to the importance attached to knowing that specific gear provides a match to a carrier's SIP Trunking implementations. (By the way, this will still be as key after Avaya completes its acquisition of Nortel, as these separate platforms remain widely deployed.) Some of these tests apparently took quite some time and a great deal of communication among the vendors away from the standards forums.

Even beyond that, the Verizon and AT&T panelists at my sessions have made the point that large customers can also come to their own labs to do their own tests. In this way, the ramp of SIP Trunking reminds me of the early days of MPLS, including in its original guise as IP-enabled frame relay, when customers felt they had to test older versions of Cisco IOS software releases to see if they would be supported over these new label-switching protocols.

Basically, the larger and more complex your organization, the more legwork is invariably involved with SIP Trunking, despite its roots as an IP standard. At some point the legwork factor will be reduced, especially if the service takes off in the marketplace, although there are plenty of signs that the major carriers would prefer to carefully manage this transition away from their traditional and profitable local trunking services. It's an arc we'll be following closely as the SIP Trunking story continues.