In the United States, Ethernet services are still primarily centered in metro areas with little intercity or national availability. As carriers refocus investments on the access portions of the network, Ethernet is expected to emerge as the "access protocol of choice" within the next 24 months, according to a February report, "Ethernet Access Infrastructure Market Plays a Leading Role in Carrier Network Evolution Plans," by Pat Matthews, a senior analyst at the Yankee Group. For many carriers, the strategy of choice is to provide Ethernet services—and support present and future IP services—while avoiding forklift upgrades to their existing networks.
Facilities-based Time Warner Telecom (Littleton, CO), which offers services in 44 metro markets, got into the Ethernet market in mid-2001, when it began offering managed Gigabit Ethernet over SONET or WDM as connectivity for its business customers. Entering the market was relatively straightforward because the carrier already had multiservice provisioning platforms, an adjunct to add/drop multiplexers (ADMs) in next-generation SONET networks.
"It was very easy to do the Ethernet over SONET because we had the rings in place, we had the chassis—all you had to do was a card upgrade," explains Ann Mahoney, vice president of Internet and data at Time Warner Telecom. "That is why we entered the market at the point and the place that we did."
In 2002, Time Warner Telecom began to offer unmanaged Ethernet over fiber to compete against local incumbent SBC Communications, which was starting to aggressively market its GigaMAN product (at that point, dark fiber with media converters on each end, according to Mahoney). "As much as we hated to turn around and go there, it was something that we were having to compete against in their market, so we launched our own product, Customer Direct," she says. "Rather than using media converters, we put CWDM or DWDM on either end to have an unmanaged service, so that we could compete with them on a price point and go like for like."
In 2003, Time Warner Telecom overlaid switched Ethernet services for metro markets by placing Cisco Catalyst 7609 switches in its points of presence and Cisco 3550 switches at the customer premises. The lower costs promised by Ethernet became evident with the rollout of switched metro services. The equipment is much cheaper than next-generation SONET, and it is fairly easy to connect a building, provided the building is on-net, the carrier found. "The switched Ethernet play is a perfect vehicle for access into an IP backbone," claims Mahoney. "You've got lower costs, you've got a standard interface. The customer does not have to change their routers from a T1 to a DS-3 to an OC-3. It has a lot more flexibility."
That flexibility is especially apparent in multipoint services, where Ethernet switching enables economies of scale, mesh any-to-any connectivity, and rate-limiting. The switched based services are popular in vertical markets with a regional focus such as healthcare.
Unlike incumbent carriers, Time Warner Telecom does not have to worry about cannibalization of revenues from traditional data transport services, because it never offered ATM or Frame Relay services. Most of its large corporate customers and those with mission-critical applications still opt for the resiliency of Ethernet over SONET. "With the SONET platform you can also offer voice without having to drop a separate chassis, so in doing SONET, you can take care of multiple needs of the customer," observes Mahoney.
Carriers that do offer traditional data services—such as incumbent long-haul provider AT&T (Basking Ridge, NJ), which also operates networks in 90 metro markets—are finding that some companies will use traditional data private-line services to connect buildings in the metro, then opt for Ethernet Layer 2 as a backup connection. "Ever since 911 and Sarbanes-Oxley," notes Richard Klapman, product director for AT&T Ethernet services, "a lot of customers want diversity between their data centers, and they buy AT&T's traditional [data] services, which are reliable, but they want to have a secondary backup circuit. And rather than buy a private-line Layer 1 circuit, they buy a Layer 2 Ethernet circuit."
AT&T also uses resilient-packet-ring technology over SONET in a service called Ultravailable Managed OptEring. This service supports multiple protection schemes and is most often used to link customers to AT&T's 17 data-hosting centers or interconnect multiple business locations.
Voice over Internet protocol (VoIP) will be a major driver for Ethernet, according to carriers and analysts. "It is starting to take off," says Klapman. Companies want to stretch their IP-based PBXs over a common metro area over Ethernet to their other buildings. AT&T reports that one large financial customer is using its Ethernet Switched Services to extend an IP PBX to 14 locations. The carrier also offers managed IP PBX services and has agreements with five IP PBX vendors.
Class of service for Ethernet, which is partly addressed by the IEEE 802.1p standard, is still an area of debate in the industry. "It's true, you want class of service for VoIP," says Klapman, "but if you have a 1-Gbit connection and there is no congestion, do you really worry about that? There are two different schools of thought on that one, so we are carefully looking at that standard."
Tejas Vashi, manager of optical strategy for Cisco Systems' optical-networking group, believes Layer 2 802.1p, which tags packets as high priority or low priority, is not nearly enough when it comes to quality of service (QoS). End-to-end QoS, integrated over multiple layers, is necessary for advanced services, which will drive carrier profitability.
Early this year, Time Warner Telecom began to offer Ethernet using its IP backbone. Now, the carrier can connect customers over multiple metros by carrying native Ethernet traffic in an MPLS tunnel over its IP backbone. Mahoney expects extended metro Ethernet services to become readily available within the next two years.
AT&T's Klapman observes that demand today is still 80% within the metro and 20% long-distance. "We have point-to-point Ethernet services between the West Coast and the East Coast, and we are having some discussions with some customers about extending our Ethernet Switched Services from the MAN to the WAN and what should that look like," he says. "The real question becomes, do customers want our Layer 1 services long-distance or do they want to buy our Layer 2 services?"
AT&T sells a lot of Layer 1 private lines connected to Ethernet switches that the customers manage. AT&T's long-distance private-line service offering is a multibillion-dollar business. "Over time, as Ethernet matures, the customer might decide to outsource the management of those switches, and we will just collapse that switch into an Ethernet card inside of our multiservice platform," Klapman speculates. "But customers are quite happy with the private-line services today for long-distance."
Finally, footprint is still a challenge for the industry in general. To deliver Ethernet, carriers must be able to connect to the building physically. AT&T has relationships with several third-party providers in an effort to reach customers in buildings not on its network. Time Warner Telecom is interested in Ethernet-over-copper solutions that could open opportunities in untapped markets. "What do you do if you want to get to K-12?" asks Mahoney. "A lot of schools are in suburban areas where there isn't a lot of fiber."