Ethernet pricing structures are best understood by comparing the dollars per megabit for an MRC to long-haul Sonet circuits of a similar full-port capacity. On a common long-distance route, say Los Angeles to New York, per-megabit pricing for GigE service ranges from $31.99 to $41.40. The per-megabit price range for OC-12 services on the same route, looking at carriers that also offer GigE service, is $20.72 to $28.43. GigE prices per megabit are, on average, about 25 percent higher than OC-12 prices.
Further investigation on other routes demonstrates similar trends. One major bandwidth provider offers a GigE circuit on the New York-to-Washington route for $9.96 per megabit, compared with $8.20 for an OC-12. This prices GigE about 21 percent higher than a traditional 622-Mbps circuit. For Chicago to New York, GigE prices range from $16 to $27 per megabit; OC-12 MRCs from carriers offering GigE on the same route range from $13.75 to $22.53, averaging about an 18 percent premium. For connections between most U.S. business centers, the dollar-per-megabit markup between OC-12 and GigE is 15 percent to 20 percent.
Long-haul Ethernet in Europe is typically sold at a very high premium compared with SDH service. For this dollar-per-megabit analysis, FastE prices are compared with STM-1 (155 Mbps) SDH circuit pricing. London-to-Paris, POP-to-POP FastE prices range from $23.10 to $28.62, while the STM-1 dollar-per-megabit price range is $11.22 to $15.59 for the major pan-European carriers surveyed. This pricing structure is similar with trans-Atlantic routes--the dollar-per-megabit price for a FastE circuit from London to New York ranges from $35 to $46.20. STM-1 prices for that route for carriers also offering FastE range from $19.35 to $34.50. --Greg Bryan, TeleGeography research analyst
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