textfiles/phreak/SWITCHES/centrex.txt

                       Centrex Renaissance
                        "The Technology"
                  By John D. Bray * (See below)

                 Retyped from: On Communications
                  (October 1985,Vol. 2,No. 10)

                        By Jester Sluggo  


     Serious new investment is being made in central office-based 
services.   Regulators  appear to be ready to let the fight begin 
in earnest between Centrex and the PBX (Private Branch Exchange).
     Local exchange telephone companies have discovered that,  in 
Centrex, they have the only differentiated product in the crowded 
customer-switching  marketplace.    Hardware  manufacturers   are 
offering  new  sets  and  switches in  voice/data  and  data-only 
formats.   Software developers are recognixing the opportunity to 
support  the  large,   established  user  base.    Customers  are 
beginning  to  understand that Centrex is an  extremely  flexible 
service concept.   Like any modern communications system,  Centex 
is  hardware-dependent.   Unlike  the options available  to  most 
users, Centrex is not hardware bound.
     In  1981,  most telephone companies in the U.S.  and  Canada 
decided  that  they  could  make  more  money  selling   customer 
premises-based  switching than they could selling central office-
based  switching.   Following  the time-tested "grass  is  always 
greener" school of marketing,  the telephone companies'  low-key, 
service-oriented  sales forces convinced themselves that the only 
reason they were not selling was that their product did not  look 
exactly like everyone else's.  The regulators seemed to feel that 
if  they  just  left their wards to their own  devices  and  AT&T 
direction,  the regulatory difficulties of Centrex services would 
just dissappear.
     U.S.  District Court Judge Harold Greene's divestiture order 
in  1982,  though  not necessarily a complete surprise  to  AT&T, 
caught  the local phone companies with limited planning resources 
and few integrated stratigies ready for implementation.
     Though  there was shock and then lethargy in some  quarters, 
most telephone companies took action quickly.   The establishment 
of  independent  dealers was a giant step in  many  states.   The 
telephone comapany recognized itself as a wholesaler of products, 
rather than insisting on total customer control.  Initially, this 
concept was thought to apply to the new, small-user market.
     Executone,  Inc.  saw  the license as much more  broad  than 
that.   This  dealer  strategy broadened the  terminal  equipment 
variety  available  to Centrex customers.   There was no need  to 
wait  for the telephone companies to test terminal equipment  and 
negotiate distribution agreements.   Everything in the market was 
already  compatible  with the  national  telephone  network,  and 
Centrex,  as a soft-ware defined feature group, is a component of 
that network.
     While   more  sources  were  becoming  available  to  users, 
manufacturers like Northern Telcom,  Inc.  and Gandalf Data, Inc. 
were  seeking new ways to enter the marketplace as  suppliers  to 
the telephone companies.   Northern Telcom's response to the need 
for  a digital central office with Centrex capability suggests it 
isn't only the telephone companies that have done a quick  about-
face.
     As  no one knew that Centrex would come through  divestiture 
stronger  than  ever,  Northern Telcom's DMS-100  central  office 
could only have been developed to be the first giant PBX aimed at 
displacing  major Centrex installations.   Instead,  major supply 
contracts across the U.S.  and Canada for Northern Telcom  caused 
AT&T,  the  historically dominant U.S.  supplier,  to rethink its 
central  office  development  strategy.    A  crash  program  was 
initiated  to  develope a full array of Centrex features  in  its 
digital  technology  central  office,   the  5  ESS.   These  are 
scheduled for customer site testing in January 1986.
     While  Northern Telcom was teaching new lessons to  sum  old 
suppliers  in  1983  and 1984,  in 1985 there is a crowd  of  new 
options--that  is,  new  suppliers entering the  market  and  old 
suppliers   offering  new  options--for  Centrex.    GTE  Corp.'s 
manufacturing  arm,  Automatic  Electric,  is  trying  to  get  a 
foothold in the central office market.   Where AT&T and  Northern 
Telcom are touting the ability of their offices to serve remotes, 
ITT  is  getting a foothold in the market by  offering  so-called 
centrex  remotes that bring digital functionality to the customer 
while being hosted by extant technology, the 1A ESS.
     Like  many customers,  the telephone companies are  learning 
that  combing voice and data functions in the same switch is  not 
always  a cost-effective answer.   Using ordinary bell  wire  for 
local  transmission  does  appear  to  be  an  effective  answer.  
Sophisticated  customers,  of  course,  have already  beaten  the 
utilities  to that conclusion.   They have been using  contention 
data switches, like Gandalf, in conjunction with Centrex.
     Using the in-house cabling provided by the telephone company 
to  carry both voice and nonvoice traffic  simultaniously,  these 
users  strip off the data traffic at the building terminal block, 
sending  it  through  the cost-effective  contention  switch  and 
letting  the time- and quality-sensitve voice traffic pass on  to 
the central office.
     More elaborate solutions for the digital data communications 
user are seen in announcements from companies like Wisconsin Bell 
and   Southern   New  England  Telephone   Co.,   where   Siemens 
Communications Systems, Inc. equipment is being considered as the 
backbone for a separate, switched data network.
     Ameritech,  working with AT&T, has selected Illinois Bell as 
the  site  for  its integrated services  digital  network  trial.  
Centrex  product  managers  around the country smile at  talk  of 
ISDN.   To  their  knowledge,  none of today's PBX  products  are 
compatible with the ISDN concept.  Solutions like the Gandalf and 
Siemens  options  mentioned above extend the functional  life  of 
today's network workhorse, the 1A ESS.
     Electronic  key  telephone  service,   with  its  associated 
reductions  in cable requirement and  rearrangement  flexibility, 
works  with  Centrex  as well as it does with PBX  or  any  basic 
telephone  service.   If  the Centrex user has what is  generally 
known as Centrex II or later editions of Centrex  service,  these 
key  systems  tend  to  duplicate many of  the  features  already 
incorporated in the basic Centrex line rates.   AT&T and Northern 
Telcom have produced additional product lines that work only with 
Centrex, as proprietary sets do with PBXs.
     In the case of AT&T, a subprocessor must be installed in the 
central office.   Northern Telcom has takien another step.   With 
its  Unity  series,  rather than duplicate the array of  features 
inherent  in  the  central office  itself,  Northern  Telcom  has 
produced a series of high-function sets that combine  flexibility 
with economy.
     These  feature  sets  actually use  the  in-place,  two-pair 
station  wire.   They can be monitored by a receptionist using  a 
small  console that displays either 15 or 30 station-busy  lamps.  
The  console positions use either 25- or 50-pair  cable.  Several 
companies,  including  the Redmond,  Wash.-based  Tone  Commander 
Systems, Inc., have produced Centrex consoles.  Many of these are 
aimed  at  providing  low-cost console operation  for  the  small 
Centrex customer where little support was available before.
     The  telephone  companies  are  also reaching  out  to  make 
Centrex  compatible with adjunct systems,  like voice  messaging.  
In  1982,  the  1A  ESS talked only to  itself  when  doing  call 
processing.  Now, when it finds a called station busy or one that 
does  not answer,  it will retain the number of the first station 
called.   When it forces the call to a predignated point,  like a 
customer-owned  voice  message center,  it first  passes  on  the 
original  called  telephone  number.   This enables  the  message 
center to bring up a screen filled with data on the party that is 
normally  located  at the originally  called  number.   When  the 
message center takes the forwarded call, the call can be answered 
professionally and personally.
     Direct  customer  control of the telephone number  and  line 
feature  arrangements has become commonplace in companies with an 
aggressive Centrex policy.
     The  moves  and  changes area has become  one  of  the  most 
contested  in Centrex software development.   Products have  been 
developed  by  AT&T,   Bell  Communications  Research,  Inc.  and 
American Telecorp,  Inc.,  as well as local products developed by 
Illinois Bell,  Nynex Corp. and Northwestern Bell.  Each of these 
products  is  aimed  primarily at speeding up  the  rearrangement 
process  while  cutting  costs  for both  the  customer  and  the 
telephone company.
     Telco Research Corp. of Nashville, Commercial Software, Inc. 
of  New  York  and several others have  entered  the  lists  with 
mainframe-,mini-,and  microcomputer-based systems,  each aimed at 
providing  a  cost-effective solution to an  old,  but  now  more 
critical  customer  management  problem.   System  size  and  the 
desired speed of reports will usually dictate the best answer for 
each user.
     An  area  of  rapidly expanding interest in Centrex  is  the 
multitenant market.  Several telephone companies have seen enough 
potential  to put new offering together that will take new  names 
and have new rate structures.  Basic Centrex advantages, like its 
ability to handle expansion and contraction easily, while leaving 
serious  maintenance  problems  in the  hands  of  the  telephone 
companies,  seem  to be important factors.   Customer control  of 
moves and changes also plays a major role.
     Technology  no  longer  appears to be a limiter  to  central 
office-based  services.   Centrex will give way to a host of  new 
labels denoting more specialized services.
     No  longer  dependent  on a single  source  for  innovation, 
development  and  distribution,  the  Centrex  customer  and  the 
telephone company alike can look forward to an increasing rate of 
innovation.  
     All  of the manufacturers with an interest in the market  of 
not  yet  established  a  place.    Major  firms,  like  Ericsson 
Information Systems,  do not plan to be left out.  ITT's strategy 
to  start  with Centrex remotes and build back into  the  central 
office has potential.   The excitement surrounding the resurgence 
of Centrex in the U.S. and Canada has triggered serious inquiries 
from Europe.
     Several  other  factors will determine  whether  development 
accelerates as fast as it can,  including regulators,  customers, 
telephone company management,  embedded processes and alternative 
technologies.   At the end of Round 1, Centrex has surprised many 
observers and reassured others.   Unless sumone fixes the  fight, 
it is going all the way.

* Note: Bray is vice-president, marketing, for American Telecorp, 
Inc., Redwood City Calif.


Watch  for  Part 2 of  Centrex  Renaissance,  "The  Regulations", 
written by Leslie Albin.

     The above text was written primarily for people in marketing 
telephone technologies.  In the interests of the phreaking world, 
I   hope   that   you  can  focus  on  the   business   side   of 
telecommunications which may be in your future. There are more to 
PBX's   than   0-700-456-1001.     Any   comments, questions,  or 
corrections may be emailed to me at Metalshop, or to:

                            J. Sluggo
                           P.O. Box 93
                    East Grand Forks,MN 56721
 
     This  file is dedicated to Bambi for bringing me my  fondest 
memories -- There is "No One Like You!" -- The Scorpions.

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