Crestone International Inc. claims Atlanta as its home, but the technology consulting firm really exists on MCI WorldCom''s network. Its 200 consultants work at home or at client sites, using an MCI WorldCom integrated-messaging service to stay in touch with each other and with customers.

A Web interface lets Crestone employees direct calls to their home offices, cell phones, or client sites. People contacting them need to know only one number-the network does the rest. Callers who don''t reach an employee can leave a voice-mail message that will also appear in that employee''s E-mail.

With nearly all its employees located in different places, communication is vital for Crestone. "Being able to contact who you want, when you need to contact them, is extremely important," says Paul Simmons, VP of PeopleSoft services at Crestone.

MCI WorldCom''s Contact service is just one example of emerging network-hosted services that could change the way companies communicate and operate. Telecommunication carriers are promising an array of applications and services that could move traditional IT functions onto the carrier network. That means employees at companies using these

services will connect to carrier network servers to access messages in combined voice and data mailboxes, participate in voice and data collaboration, and even use enterprise resource planning applications.

"Next-generation networks will let us do a larger job with fewer people, at lower costs," says Douglas Fields, VP of++telecommunications at United Parcel Service of America Inc. "The focus moves from manipulating technology to managing technology to satisfy your business needs."

Among the technologies driving the development of these new applications and services are packet switches for IP and ATM that can handle voice, data, and video, providing cheaper bandwidth-and more of it. A shift toward standards-based carrier equipment is also encouraging the development of these new applications and services.

Companies buying these services will be able to conduct business on the network that they now have to do face-to-face. It will be the "death of distance," says Terence Rogers, director of Abilene, a $500 million network-research project,++involving several universities and Qwest Communications International, Nortel Networks, and Cisco Systems, to build the next-generation Internet. "This isn''t just another change. It''s of superior magnitude and significance to society."

++Among the companies developing services are Qwest and Netscape. They are jointly developing Netscape Contact, which will let users manage voice mail, E-mail, and faxes through a single in-box on Netscape''s Web site. Eventually, users will be able to initiate and manage two-party or multiparty phone-to-phone conference calls from a Web browser.

Level 3 Communications Inc. hopes later this year to sell integrated messaging services that connect existing E-mail and voice-mail systems, eventually letting mobile workers hear their E-mail. Qwest plans to offer a similar service through a venture with Microsoft.

Qwest is among the carriers breaking bandwidth price barriers over an advanced network. It offers a T-1 (1.54 Mbps) line for $1,595, which compares with $2,690 for the same line from AT&T, says Lisa Pierce, an analyst with Giga Information Group. Qwest charges $3,190 for a 45-Mbps line, compared with AT&T''s $12,650, she says.

Ford Motor Co. is taking notice. Qwest recently offered a deal that the automaker "had to consider," says Dick Tucker, Ford''s global telecommunications services manager. Tucker, who wouldn''t provide specifics on the deal, says Qwest offered Ford significant savings in a three-year contract for domestic and international communications services,

including remote-access toll-free service. But Ford isn''t just interested in lower prices: It expects Qwest to providehigh-quality network services, Tucker says.

Qwest and other next- generation carriers have cut prices by lowering the cost of building their networks. They''ve done this by using cheaper packet-switching technologies, such as IP and ATM, and new optical technologies that let them squeeze more bandwidth through a pipe. These networks can run at 320 Gbps; in five years, they''ll be able to handle 10,000 Gbps.

Quest says when it completes its 18,000-mile network next summer, it will be able to carry all existing U.S. telecom traffic and operate 30% to 40% below the cost of traditional carriers. "A lot of the older carriers are going to have a hard

time keeping up," says Guy Cook, VP of Internet services for Qwest.

Later this year, Level 3 plans to offer services on a new network that it expects will lower costs even more than Qwest''s circuit-switched and IP network. Level 3''s all-packet IP network will transport traffic for less than 4% of what it costs over a circuit-switched network, the company says.

Level 3 and Qwest are also making their networks easy to upgrade so they can take advantage of continuing improvements in the fiber-optic price-performance curve-which is providing twice the performance for half the money every 10 months. Falling prices of fiber optics, the ability to deploy new fiber-optic technology quickly, and the use of

IP technology will lower costs by as much 60% a year in the next century, network equipment suppliers tell James Crowe, CEO of Level 3.

++With more capacity, new carriers can more quickly roll out bandwidth-intensive services. For example, while other carriers are focused on compressing voice traffic to squeeze it over IP data networks, Qwest simply allocates more network bandwidth. It rolled out its IP-voice service-which is available to consumers for 7.5 cents a minute-in a matter of weeks.

++Next-generation carriers such as Qwest and Level 3 aren''t the only ones implementing these new fiber- optic and IP technologies; MCI WorldCom last year spent $6 billion to upgrade its network.

New IP and ATM packet-based networks have another advantage: They carry voice, data, and video, a huge advantage over conventional networks that can carry only one type of traffic. That makes network management easier and cheaper, and it will let carriers and customers more easily integrate voice, data, and video into single applications, such as unified messaging and desktop collaboration. Later this year, carriers will roll out virtual private network services that include voice, allowing remote users to work on their PC and phone as if they were sitting in their office.

As bandwidth becomes cheaper and IP networks handle more types of traffic, carriers can run computing applications on network servers. It''s an idea Sun Microsystems CEO Scott McNealy calls "X tone." Instead of just providing dial-tone service for voice and data, McNealy says, carriers should provide computing apps over networks, calling the

services Web tone, mail tone, IP tone, and even ERP tone.

Forrester Research Inc. predicts a $21 billion industry for network application outsourcing by 2001, which will include everything from collaboration and messaging to enterprise resource management applications. Earlier this year, Qwest

and Microsoft signed a strategic agreement to develop and sell emerging network applications in the second quarter.

Public network applications can be cheaper than applications deployed on a corporate network. For example, Qwest''sCook predicts that the carrier''s VPN service will be half the price of VPN networks that customers build themselves. "You get reduced head count, reduced access costs, and reduced equipment costs," he says. "It starts to get very++cost-effective."

Running traffic over a single IP network also provides users with an easy interface to control network services. For example, telecom carrier Frontier Corp. within the next six months will let customers reconfigure their networks via a Web interface.

Carriers are also setting up networking centers where businesses can place their own network servers that connect directly to the carrier''s network. Last month, Qwest opened its first 50,000-square-foot Cybercenter in California,

running directly on Qwest''s 2.4-Gbps backbone. Level 3 has 15 35,000- to 80,000-square-foot network server hosting centers and will add another 10 by end of the year. Frontier has eight centers and is adding four more 40,000-square-foot facilities this year.

Such Web hosting services offer "the best of both worlds," says Larry Sanders, director of business operations for newspaper USA Today in Rosslyn, Va. "It offers us a chance to get our servers closer to reader, but still gives us full control of servers."

The server hosting services let high-bandwidth users put the new carriers to the test. Broadcast.com has servers located in three of Level 3''s hosting centers that let it provide video streaming to Web sites. The hosting centers let the Dallascompany provide high-quality services to its customers, says Henry Heflich, Broadcast.com''s chief technology officer.

Intervu Inc., which also provides video streaming to Web sites such as CNN and MSNBC, is placing three servers on Level 3''s network, pumping hundreds of megabits of bandwidth at the network during major news events. The San Diego company plans to add more servers as it provides audio streaming for 1,000 radio stations that subscribe to Radio.com.

"Level 3''s prices are great, but their customer service is how they are going to keep customers," says Scott Crowder,VP of operations of Intervu. But just as important, Crowder says, "Level 3''s infrastructure represents the network of the future."

That network is not only based on low-cost fiber optics and IP technology. Level 3 is also one of the first carriers to build a carrier network using equipment based on open standards that let Level 3 select equipment for its network based on the best features for the lowest price.

Because of those standards, Level 3 says it will be able to sell IP voice services at as much as 25% below other carriers'' current voice prices. It also plans to sell a managed modem service at $35 to $40 a port, compared with about $50 a++port for the same service from a Baby Bell.

In the past, carriers were limited to whatever proprietary applications network-equipment vendors provided with their hardware. With the move toward open standards, any software developer will be able to create network-run++applications by writing to network APIs that will be available later this year.

"You end up with an operating system in the middle of the network and with published APIs for applications to feed into," says Kevin O''Hara, Level 3 executive VP and chief operating officer. "Anybody with a good idea and the++intellectual capital to write the code can create an application." The carrier expects independent software vendors to start building network applications next year."Until now, we''ve seen a glimpse of what the network can do for you," says Abilene researcher Rogers. "But it has been a frustrating experience that doesn''t feel right. In the next transformation, we will create the environment which will be comparable to being there."

That may sound like something for the next century, but the next century is almost here. And the steps toward this fundamental shift in networking are already being taken.