Doug Allen Blog:The Ethernet Everywhere Explosion

And never more so than in the last year or so. Ethernet services now range from copper to T1/NxT1 to fiber, from DSL-based to pure Ethernet, from 2mbps access to (coming soon) 100gbps backbone links. Ethernet has become the great Swiss Army Knife of telecom transport, endlessly re-fashioning itself for a growing number of WAN services and applications. In short, Ethernet services are exploding, and providers, partners and agents can offer customers a rich menu of options, from simple transport to value-added services like VoIP and hosted solutions, over a single circuit.

But as much as the reseller opportunity lies with Ethernet’s rich service capabilities, there’s another critical driver expanding the potential customer base; carrier interconnection. Sometimes called peering or network to network interfaces (NNIs), the ability to extend a provider’s service reach by linking to another carrier’s network while maintaining critical performance metrics across boundaries is opening up whole new sales opportunities, as limitations like network availability and reliability are slowly resolved through open standards and agreements dictating QoS, security, reliability and other SLA metrics.

The Ethernet Everywhere Explosion is most evident on the carrier side when you just look at the number of public Ethernet Exchanges (carrier interconnects) and NNIs that have emerged recently. While veteran carrier exchange Equinix got the ball rolling, a number of players have jumped into the fray over the last year, including CENX, which boasts (confirmed) members Verizon, Level 3, Intellifiber, Covad/MegaPath, and XO; Neutral Tandem, and Telx. Some have not confirmed their full carrier membership, and are still building out their peering point infrastructure, which generally runs from 7 to 21 locations across the U.S. and Europe.

While Exchanges allow a provider to link to each participating provider’s network, the number of bi-lateral NNIs (interconnecting two providers) has also been skyrocketing. IXCs with the largest network footprint have been busy, according to a recent report from Brian Washburn, research director at Current Analysis; by late 2009, Verizon Business claimed 133 Ethernet NNIs, and 231 certified Ethernet access services with 125 carriers. The previous year, Qwest had partnered to grow its optical Ethernet reach an additional 759 cities, covering a total of 1,129 U.S. cities and six international markets.

“AT&T has disclosed fewer agreements—just 15 third-party Ethernet NNIs and international Ethernet access agreements in 38 countries…[T]hough far fewer in number, AT&T’s Ethernet NNIs in the U.S. are with key partners that can provide great depth and reach of services including Verizon, Qwest and tw telecom.” Sprint lags behind the Big Three somewhat, but has built out its coverage in existing Ethernet metro markets, and will add 16 more by end of the year.

What’s the big deal? Up till fairly recently, most Ethernet offerings were intra-metro or inter-metro. True, there were some long-haul services available, but customers were forced to keep their traffic on-net if they wanted reliable service; venturing “off-net,” onto another provider’s network, reduced service assurances to “best effort.”

So providers began to establish specific NNIs that stipulated key performance metrics for all traffic, regardless of network origin. Freeing Ethernet transport from sporadic islands of network availability, these NNIs can greatly enhance the reliability and network reach of the service in direct relation to the performance guarantees of the interface agreements and the size of the interconnected networks.

Moreover, providers can offer more stringent SLAs “end-to-end” across NNI-bonded networks, enabling customers to bundle more high-priority, higher-margin services over a single Ethernet circuit without jeopardizing QoS. True, the customer’s service experience will only be as strong as the weakest link in the network(s) chain. But, with NNIs in place, performance is made much more transparent and predictable across networks, allowing customers to more easily identify a provider (and their partners) able to deliver the requisite performance.

Some Ethernet providers and agents have pointed out a general lack of customer—and sometimes partner—awareness as to the range of Ethernet services available. No doubt the learning curve must also involve an understanding of just how far how the Ethernet services have come in terms of network reach and the kind of performance customers used to primarily associate with the T1.