t not all require it. In order to remain profitable and retain market share, most service providers must offer voice, private-line, and packet data ser- vices on the same infrastructure. Service providers are experiencing a new dilemma. In order to understand the problem, we must first examine where the bandwidth demand is coming from: the Internet, other data protocols, and voice. Packet traffic has overtaken circuit- switched voice as the dominant source of demand. Data traffic today constitutes some 90% of all traffic. Data unit growth is approximately 100% per year, and IP is the dominant form of data growth. However, other data protocols are also still being used, such as ATM and Frame Relay. The greatest bandwidth demand is com- ing from the Internet, yet voice represents about 80% of the revenues and dwarfs the data revenue, which is estimated at just 20%. So, while the Internet is the larg- est source of traffic growth, at the same time, the Internet is today a low-margin service. For example, in the United States, revenues for IP are expected to be only 5% of total Frame Relay and ATM revenues. To address this dilemma, service pro- viders are moving from time and distance orientation to bandwidth and services orientation. They are also recognizing that the ability to deploy and support tomor- row's high-value services requires a new generation of network, an intelligent opti- cal network platform. The carriers are taking a number of steps to find new high-margin services. The traditional approach has been to offer new services, such as Frame Relay VPNs, IP VPNs, and MPLS offerings. Premium service revenue is driven by value. The offer of higher bandwidth is added value, as is the offer of guaranteed and measurable performance via service-level agreements (SLAs) or the offer of expe- dited service installation. However, even these advanced services eventually become commodities, and prices begin to drop. Carriers need to migrate to an intelligent optical network, a new infrastructure composed of intellige