Ethernet dominates CompTel metro talk - For Starters - Competitive Telecommunications Association

Telecommunications Americas, April, 2003 by Sue O'Keefe

What's going on in the metro? A lot, and a lot more growth is coming if you believe market prognostications. The hot spot right now is Ethernet services, but the question on every service provider's mind is how the heck to make money off those services--without cannibalizing their existing bread-and-butter offerings.

Service providers are seeing lots of demand from end users for Ethernet services because "it's a really cheap plug," says Andrew Knott, vice president of marketing for vendor White Rock Networks, who spoke with a mix of other vendors and service providers at the "Reality Check: Demystifying the Metro" roundtable sponsored by Telecommunications[TM] magazine at the recent Competitive Telecommunications Association (CompTel) annual convention in San Antonio.

Greg Smith, director of carrier relations for Dominion Telecom, says his company is seeing a growing demand for Ethernet-based services and said the carrier is rolling out point-to-point services in four initial cities with a mix of Tier 1 and Tier 2 cities to follow. Lynn Refer, CEO of Looking Glass Networks, said his company is also seeing more and more interest in wavelength services at 2.5 Gbps and 10 Gbps. "We are hearing some requests for Ethernet over glass where it doesn't touch a lower level protocol at all," Refer says.

On the vendor side, Knott says carriers' Ethernet demands have shifted over the past several months as well. "Service providers have gone from saying they don't want Ethernet in the transport to saying that if you don't have that capability [in your equipment] they won't even look at you," Knott says.

But despite the sudden surge of interest in Ethernet, it's by no means a home run in terms of ease of deployment or return on investment. "It's not clear to many carriers how you can make money off Ethernet right now," says Rich Tatara, vice president of sales at Tellabs. Session moderator Chris Nicoll, vice president of telecom infrastructure for consultancy Current Analysis, agrees: "Ethernet has been a black hole for a few years," he says. "It's fine to say that you can give users 100 Mbps to the desktop, but what do you need on top of that? What will drive the demand for broadband services?"

Jim Patterson, vice president of access management for Sprint, says end users are starting to get the tools in their hands to drive more bandwidth usage, whether it be wireline or wireless. But, communications need to be more interactive, he says. Patterson cites the example of a company like 1800FLOWERS and a mobile user wanting to order the perfect bouquet. "Instead of looking at a static picture that was downloaded to a phone, why can't he have the ability to go into the florist's virtual flower selection and be able to change the purple flowers to pink?" Patterson asks.

However, Dan Moffat, CEO of New Edge Networks, argues that service providers shouldn't be the ones worrying about finding the applications that will drive higher bandwidth usage; end users have proven to be very adept at that. "We shouldn't be driving the apps, just providing the quality broadband services," Moffat says. "Until we start looking at the broader picture instead of fighting in the trenches the industry will continue to be stagnant."