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Analysis: Carrier Ethernet: Page 9 of 11

We selected locations in major hubs like Chicago, San Francisco and New York, as well as smaller urban areas such as Waltham, Mass.; Green Bay, Wis.; and Syracuse and Manhasset, N.Y. That mix is because large businesses aren't limited to big metro areas: Syracuse, for example, counts Carrier Corp. and Lockheed Martin as two of its main employers, while a number of smaller, geographically dispersed companies are setting up shop.

Along these lines, in our reader poll we asked about the geographic dispersal of readers' WANs; interestingly, of those with plans to deploy Carrier Ethernet, most were within a single metro area (see "How Many Locations Do You Connect or Plan to Connect?").

Multiple metro areas in a region and across the country combined to made up the bulk of the remaining responses, while international Carrier Ethernet was virtually nonexistent, at 9.4 percent. Not surprisingly, when the number of sites increases, the geographic spread of the Carrier Ethernet WAN grows as well (see "What Is the Geographic Reach of Your Current or Proposed Carrier Ethernet Sites").

Ethernet: Long-haul Premium, Local Savings

Carriers have been talking up long-haul Ethernet rollouts for some time now, but service has been slower to materialize than expected. Given limited availability, it's too early to predict how prices will move compared with similar SDH/Sonet circuits, but in the near term it seems certain that Ethernet prices in the United States and Europe will represent a premium above SDH/Sonet service in the long-haul.

Yes, this goes against the conventional wisdom that Ethernet is the least expensive mode of transport. This is because when long-haul Ethernet is delivered over SDH or Sonet, you have to account for the base bandwidth cost, plus a premium. It's in end-to-end service where customers see savings--lower equipment costs, inexpensive Metro Ethernet services and reduced costs for incremental upgrades make Ethernet a value play.