ITPRC NEWS - May 2001
The Metro Explosion
By Irwin Lazar
Given all the recent woes in the
networking and telecommunications industry, there is one area that still
appears to be gathering steam, Metropolitan Ethernet-based services.
Companies such as Yipes, Telseon, and Cogent Communications continue to
attract large amounts of funding as they build out their
Gigabit-Ethernet based services in cities across the United States.
The value proposition of these services
is clear, for the approximate price of a T-1 they will provide customers
with 100 Mbps Internet connectivity. Most of these services also
offer transparent LAN services for connecting various locations within a
metropolitan area together in a single broadcast domain. In the
future, these services will expand their ability to tie metropolitan
area connections together via partnerships with traditional carriers
until such time as their own nationwide, Ethernet-based infrastructures
are in place.
Another value proposition of
Ethernet-based services is the ability to buy bandwidth on demand.
Most Ethernet-based service providers are offering, or planning on
offering, on-the fly bandwidth provisioning via a web interface.
This will allow customers to request additional bandwidth as they need
it, generally in increments of 1 Mbps. Compare that feature with
the wait time to upgrade from a T-1 to a T-3 and the benefits are
Given current efforts at developing
standards to allow MPLS to encapsulate legacy frame relay and ATM
services, and it becomes feasible that Ethernet-based service providers
may soon be able to provide frame relay and ATM services in addition to
their Ethernet-based service offerings.
The biggest concern among these types of
service providers is the lingering shock from the collapse of the DSL
market. Enterprises who saw lost connectivity when Northpoint
closed up shop may be reluctant to subscribe to yet another startup
service provider. Ethernet service providers may get caught in the
catch-22 of needing customers to generate revenue, but being unable to
attract new clients unwilling to commit to a startup telecom provider
The next six to twelve months should
demonstrate the viability of the business plans of these companies.
The long term promise is enticing: once the infrastructures are built,
it shouldn't take much for Ethernet service providers to offer value ad
services such as voice and storage. Partnerships with hosting
companies and service providers should allow the offering of a wider
variety of wide area network services as well.
Those in metropolitan areas who are in
need of high-speed networks would be wise to take a look at the service
offerings of companies such as Yipes, Telseon and Cogent. The bang
for the buck is difficult, if not impossible to beat, if you are willing
to take the risk.
Yipes - http://www.yipes.com/
Cogent Communications - http://www.cogentco.com/
Telseon - http://www.telseon.net/
Information on Ethernet technologies - http://www.itprc.com/datalink.htm
Irwin Lazar is a Senior Consultant for The Burton Group. He
focuses on strategic planning and network architecture for Fortune 500
enterprises as well as large service providers. He is the
conference director for MPLScon and runs The MPLS Resource Center www.mplsrc.com
and The Information Technology Professional's Resource Center www.itprc.com.
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