Gig Ethernet services blossom

by Michael Martin

May 14, 2001 —

LAS VEGAS -- After making major strides as a metropolitan-area network technology over the past year, Gigabit Ethernet last week got a huge boost as a long-haul alternative.

Three carriers -- Broadwing, Qwest Communications and XO Communications -- aired plans for Gigabit Ethernet services that will let customers connect geographically dispersed offices at speeds of up to 1G bit/sec.

While the carriers were vague on pricing, they said customers would pay roughly 10% to 20% less for the new services than for comparable offerings, such as T-1 and T-3 lines or private-line OC services.

One of the main benefits of metropolitan-area and long-haul Ethernet connections is that many providers are letting customers pay only for bandwidth they consume, rather than a flat monthly fee. For instance, a provider might deliver a 1G bit/sec port to a customer site, but the customer would only be charged for the average bandwidth used, even if traffic burst to 1G bit/sec at certain times.

"Once you can do voice over Ethernet reliably, companies can start migrating voice from their T-1s and T-3s," said Nick Maynard, an analyst with The Yankee Group.

Competition from metropolitan and long-haul Ethernet services should drive down T-1 pricing, too, though Maynard said there is a catch: "You're basically going to have to be in the downtown of a major metropolitan area to get this stuff."

Qwest goes Gigabit

Qwest's Ethernet services, ranging from 2M to 1G bit/ sec, will be billed per gigabit transferred.

Qwest's Dedicated Internet Access service will initially be available in seven markets, with more to be added in the second half of the year.

Customers will not be required to install new equipment, said Rick Weston, a senior vice president with Qwest. The carrier will link to customers using Cisco ONS 15454 multiplexers that tie into fiber rings provided by Telseon, a metropolitan-area Gigabit Ethernet provider selling wholesale and retail access.

Competitive providers such as Telseon, as well as Yipes, Cogent and XO, have been serving up MAN Ethernet services for some time (Yipes also provides long-haul connections). And independent local exchange carriers (ILEC) such as Verizon have begun limited rollouts.

What separates Qwest from the other ILECs in the Gigabit Ethernet market is that the company is building or leasing fiber rings in 25 out-of-region cities. All of the initial Ethernet markets are out-of-region for Qwest, which purchased U.S. West last year and provides local services in 14 Western and Midwestern states.

"They'll be offering services just like any other competitive carrier," Maynard said. "It could put them in competition with someone like Yipes. But in most cases, I suspect they'll be taking business from other [regional Bell operating companies]."

While Qwest may be coming to market later than other players, Weston said the company can differentiate itself by offering a full portfoolio of services -- not just bandwidth.

"We can serve up data, voice, storage-area networking, pretty much any service a company would want," he said. "We believe that will give us an edge."

However, others do sell more than access services. For instance, Yipes offers Web hosting and other services.

Qwest will be among the few carriers delivering Gigabit Ethernet over a national network.

Joining Qwest, though, will be XO, which has been providing Ethernet, Fast Ethernet and Gigabit Ethernet services over its metropolitan networks since late last year. The company plans to launch a national Ethernet service by June, said John Curran, an XO vice president.

And as expected, Broadwing announced its first long-haul Gigabit Ethernet service trial with two customers it would not identify. Broadwing has a national fiber-optic network, but has not built its own local or metropolitan-area networks and said it will team with multiple providers to offer users end-to-end Gigabit Ethernet services.

Yipes also offers long-haul Ethernet connections.

Missing from the action so far are AT&T, WorldCom and Sprint, though Sprint said it will support Gigabit Ethernet in its MANs as it builds them and is investigating the technology for its long-haul network.

Network World