Huge Uptake in in Business Ethernet Services led by Competitive Carriers


Business customers are buying Ethernet services from legacy and competitive carriers as well as from MSOs.  Cost effective performance, simplicity of operations, scalability and the ability to use the same access technology as in the enterprise LAN are somme of the reasons for this uptake.  In addition to the extra bandwidth and the variety of services Ethernet supports, small- and medium-sized businesses appreciate Ethernet’s flexibility and lower cost.  Carriers and their customers like the fact that Ethernet adapts to their premises based (switch/router) equipment, which helps them to grow their businesses quickly. Wholesalers are doing the same things as their retail counterparts

Why Business Ethernet?

The top three reasons carriers are deploying Business Ethernet are to transport mobile backhaul traffic, to meet the needs of high-end enterprises and to serve businesses with multiple locations.  For many years, Frame Relay service was used for the latter, but being almost 20 years old, Frame Relay has been replaced by “Metro Ethernet” which also goes by the monickers “Carrier Ethernet” and “Business Ethernet.”  Note that Carrier Ethernet is also used by many carriers (e.g. AT&T U-Verse) to transparently deliver IP-TV services to residential customers.  However, that is not the focus of this article.

Ethernet over Fiber or Copper depends on Bandwidth Requirements

To truly realize the potential and power of Metro Ethernet, carriers need to build-out fiber infrastructures closer and closer to their customers.  Optical Ethernet from the customer premises to the carrier’s POP is the best, because it facilitates “liquid bandwidth.”  That means that a business customer can automatically request his Ethernet speed to be increased or decreased without having to add or remove a physical line.  The addition of a new facility involves a truck roll and may take significant time.  This is not necessary with FTTP because of the much higher access bandwidth of fiber, when compared to a repeatered 4 wire copper circuit (e.g. T1/DS1 or T3/DS3) or bonded (2 wire) DSL.

When fiber to commercial buildings is not available or possible,  the fiber is terminated in a network node close to business customers and then extended by copper tail circuits -either bonded DSL or n x T1/DS1.  The Metro Ethernet sweet spot today is somewhere between 10M b/sec and 100 M b/sec- much lower than what many pundits were predicting for 2000 and 2001 – just before the telecom crash.  Those speeds can effectively be met with Ethernet over Copper, which provides reasonably good scalability from 3 – 20 M b/sec.

According to Erin Dunne, Director of Research Services for Vertical Systems Group, just over half of U.S. business Ethernet installations are delivered over Direct Fiber.  Ms Dunne states that “SONET/DWDM is the second most prevalent Ethernet access technology.  Other technology alternatives include TDM, bonded copper, Coax/HFC, FWL and others.  While fiber is the access technology of choice for Ethernet service delivery, alternatives to fill gaps in fiber coverage will be required for many years.  This is good news for vendors of equipment that addresses the flexible access requirements service providers are demanding.”

Comment and Analysis

What’s so amazing to me is that it took over 8 years for the Business Ethernet/ Metro Ethernet market to take off. The IEEE 802.3 Ethernet First Mile Standard was completed in 2003, many MEF specs were solid at that time and the ITU-T had started a massive effort to standardize end-to-end “Carrier Ethernet,” including OA&M as well as Performance Monitoring and Protection Switching.

Many “new age” Ethernet carriers and start up Ethernet network equipment vendors went bankrupt or were acquired for a fraction of what VC investors thought they were worth.

Now – 8 years later- the volume of Ethernet bandwidth purchased by enterprises in the U.S. has surpassed the aggregate bandwidth for legacy circuits, according to new research from Vertical Systems Group.

2011 marks the tipping point of a surge in the installation of Ethernet connections. Looking ahead to 2015, Ethernet bandwidth is projected to more than double based on Vertical’s latest analysis of enterprise requirements.

“Boosted by a 10x surge in the past five years, Ethernet bandwidth has overtaken legacy bandwidth in the U.S. market,” said Erin Dunne, director of research services at Vertical Systems Group. “This milestone fittingly coincides with the ten year anniversary of the MEF – an organization that has successfully fostered the deployment of carrier-class Ethernet services throughout the world.”

XO Communications Business Ethernet Services

A survivor of the dot com bust and telecom crash of 2001-2002, XO Communications is quietly making a name for itself in delivering Ethernet services to business customers.  While AT&T, Verizon, and TW Telecom are still the U.S. leaders, according to Vertical Systems Group Mid Year 2011 Leaderboard, XO is in 7th place and moving up fast.  The company sells voice and data services to SMBs and also offers wholesale facilities to other carriers/re-sellers.

The Ethernet services XO offers to business customers include:

  • Ethernet Private Line – Point-to-point Ethernet connectivity ideal for businesses looking for dedicated bandwidth between office locations
  • Ethernet Hub (previously called Ethernet Virtual Private Line)– Point-to-multipoint Ethernet solution ideal for connecting branches or offices to centralized headquarters or data center
  • Ethernet VPLS (previously called Ethernet Private LAN) – Multipoint-to-multipoint Ethernet WAN ideal for enterprises to connect key locations, transport special applications with protocol transparency, and maintain separation of different network domains
  • Ethernet Access (to an IP WAN) – affordable, scalable Ethernet access to deliver Dedicated Internet Access, VoIP and MPLS IP-VPN services across your enterprise

A complete description of XOs Ethernet Services is described in their  Ethernet Services Overview document.  The company also provides an informative podcast describing why business customers are interested in Ethernet services and how XO meets that need.  To watch that video, please visit:

According to Don MacNeil, vice president of Carrier Services for XO Communications, Ethernet has been key to the company’s strong growth since its founding in 1996, a trend he foresees continuing in the future.

The XO network can provide Ethernet services to over 10 million U.S. businesses in the metro areas the company serves. This represents the majority of all U.S. businesses and the XO network is present in all top 25 metro markets. XO’s Ethernet-over copper services are now available in 442 central offices in 40 metro markets reaching 1.5 million U.S. businesses.

For more information on XO’s Business Ethernet offerings as well as other XO telecom services for SMBs, please contact:  Michael E. Weiss,  XO Communications Major Accounts at: or phone:  510-580-6380.  Mr Weiss attended the Oct 12th IEEE ComSocSCV meeting on cloud networking and talked with attendees during our networking reception.  He also attended our very successful social networking dinner in August.

For more information about ComSocSCV please visit:, ComSocSCV LInked IN group, Facebook page and the Sept 2010 and Jan 2011 editions of IEEE Global Communications Newsletter (GCN).  There will be another article about ComSocSCV in the Nov 2011 GCN