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Analysis: Carrier Ethernet: Page 6 of 11

The $64,000 question is: "Can I get in on this deal?" Not surprisingly, the answer is, "It depends." Like most new telecommunications services, high-value, high-population centers are serviced first, with supply trickling into smaller markets later. Carriers like BellSouth, Qwest and Verizon are pushing down-market for metro services, but nationwide offerings are just now being announced. Our expectation is that once Carrier Ethernet has a bigger footprint, the cost of services will drop, and switching from frame relay or an MPLS VPN will be a no-brainer.

So, what's the holdup? In large part, the lack of fiber to buildings. Don't just assume that your site in Boston, Los Angeles, New York or San Francisco will have capacity for Carrier Ethernet. And fiber coverage in smaller markets is even slimmer. A recent survey of carriers by Heavy Reading indicated that new fiber build-outs and wire-line access platforms, such as Ethernet over copper and Ethernet over TDM circuits, are critical for deploying Carrier Ethernet to subscribers (see "Factors Influencing the Extension of Ethernet).

Open Up And Say Ah

The IEEE 802.3ah EFM (Ethernet in the First Mile) standard may be the answer to the dearth of last-mile fiber from the central office (CO) to customer site, because it standardizes Ethernet connectivity over existing voice-grade copper cabling--by far the most common first-mile facility. However, there are some significant limitations to 802.3ah's real-world usefulness. The first, and foremost, is bandwidth. TDM circuits are generally slower than LAN speeds, and increasing WAN throughput often means adding more TDM circuits or jumping to a higher-speed link, say from T1 to T3.

Distance restrictions also hamper the reach of Ethernet over copper. The 802.3ah limitations for native Ethernet over voice-grade copper, for example, are 10 Mbps over 750 meters cable length, 5.7 Mbps over 3,000 meters.