Sprint IONs out service prices

By David Rohde
Network World, 05/10/99

WASHINGTON, D.C. - Sprint's crown jewel of next-generation service, the Inte-grated On-Demand Network (ION), is finally available in a myriad of potentially money-saving pricing plans.

But there's a catch: What is potentially the best ION deal is unavailable to customers who want to use the network for voice, video and data - the way the service was advertised.

According to Sprint's brand-new tariff for ION - an integrated-access service employing an ATM premise device to concentrate all traffic types over broadband links - users can buy service at a rate of 45 cents, 67 cents or $1.34 per megacell, or one million ATM cells. Network World obtained the tariff last week after Sprint quietly filed it with the Federal Communications Commission.

The highest usage rate applies to circuits carrying traffic that cannot bear any delay. The middle rate applies to traditional LAN interconnection traffic, and the low rate applies to low-priority store-and-forward applications.

The problem? Sprint reveals in the tariff that it cannot yet bill for ION voice and video traffic based on usage. Network professionals who want to put both voice and data traffic on the network must choose a second billing option: circuits with traditional monthly flat fees.

At T-1 speeds, the flat-rate circuit price is $3,429 per month for the highest service level, equivalent to ATM's constant bit rate (CBR) class of service. The price for the middle option - equivalent to ATM's variable bit rate (VBR)non-real-time class of service - is $1,715 per month. Overall, flat-rate billing is available at numerous speeds ranging from 64K bit/sec to T-3, with prices varying accordingly (see graphic).

ION's complicated dual-price structure presents some dilemmas for users, according to analysts who also got their hands on the tariff as it was filed.

For those who can use them, the usage-based fees are quite attractive compared with fees for traditional carrier services, says Lisa Pierce, a telecom analyst at Giga Information Group. Some usage-based frame relay offers from carriers such as MCI WorldCom and Qwest are priced at up to 5 cents per megabyte. But because the ATM-based Sprint ION service is priced per megacell, and a cell contains 53 bytes of information, even the highest ION usage rate ($1.34) gives you more bang for the buck than frame relay usage plans, even after allowing for ATM's relatively high overhead.

"The usage option is clearly a better buy unless you happen to be an incredibly high-volume user, which is unlikely at this point," Pierce says.

A Sprint spokesman says many users so far have actually said they prefer flat-rate billing because it is simpler and more predictable. But for those who do choose flat-rate billing, another potential problem arises: Sprint has left out an expected service class between the high option (called Service Level 1) and the middle option (called Service Level 3).

The missing class, which the ION tariff says would be called Service Level 2 if it were available, is equivalent to ATM's VBR real time. It's designed for robust data applications that tolerate little latency.

Users who want that kind of circuit - say, for enterprise resource planning applications - may have little choice but to go to Service Level 1. And those rates appear to be priced above most carriers' frame relay port prices for equivalent speeds, though Pierce says they beat AT&T's prices for CBR ATM.

Research Assistant Deidre Massenberg contributed to this story.