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May 25, 2010
By Daniel Lonstein, COO, AireSpring Inc.
Much has been written in recent years about the impending demise of the T1 in the headlong rush by business users to Ethernet-based products. While I think this has been apparent to anyone watching the industry, the reality has been somewhat unclear. As a service provider, the fact remains that 95 percent or more of all the locations we get quote requests for can still be serviced only via POTS or DS1s. While everyone wants Ethernet, it simply isnt available. Sure, if youre in downtown Los Angeles or New York in a fiber-lit building, you can probably get Ethernet services today, but that doesnt encompass the majority of business customers. That has been changing and will continue to change. There are several factors affecting the availability of Ethernet services to the mass business markets today.
That has been changing and will continue to change. There are several factors affecting the availability of Ethernet services to the mass business markets today:
Continued buildout of fiber by incumbent LECs (and to a lesser extent by competitive access providers)
Adding Ethernet availability to buildings that are already fiber-lit
Cable MSOs aggressive fiber buildout for business Ethernet services
Ethernet over copper (EoC)
In this post, Im going to focus on EoC. Ethernet over copper, in particular, generates a huge footprint of available Ethernet services with a relatively small capital investment. Once a carrier lights a particular central office, all businesses within the distance limitations (about 12,000 feet depending on the speed of bandwidth required) can immediately, and for the first time, get Ethernet services. EoC doesnt support more than 10mbps for most businesses, so its not a great option for customers looking for 100mbps Fast Ethernet or Gigabit Ethernet speeds. But for the average business customer its a perfect fit. The price points are also very aggressive so that a customer can get 10mbps of EoC for about the same price as 3mbps of bonded T1s. XOs Ethernet over Copper (a product we resell at Airespring) has been at the forefront of Ethernet buildout, but other carriers are jumping on the bandwagon as well, and I expect more to follow. Where Ethernet is available, it is only a matter of time before the T1 dies as an access methodology.
In a world where voice is delivered via IP (VoIP), there is no need for traditional TDM service. At Airespring, all of our on-net voice services are based on an end-to-end IP (VoIP) architecture, so Ethernet is the perfect delivery model for our services. I believe we will see a bifurcated model in the near future: Ethernet Lite (EoC) offering speeds between 3mbps and 10mbps and Ethernet over fiber for higher speeds on access of 100-1,000mbps. All voice and data services (including video) eventually will be delivered over these connections. The T1 will die, albeit very, very slowly. I dont see this happening overnight. Just the same way I dont see the electric car displacing gasoline-based vehicles immediately. But eventually, both of these will come to pass.
Daniel Lonstein is COO at
a telecommunications service provider for offering local, long-distance, Internet, conferencing and SIP/VoIP products. Previously, he served as COO for Addtel Communications. He also has served in sales and marketing functions both inside and outside of the telecommunications industry, including positions at On Target Market Research and Tel Aviv-based based USTM Partners. He also has consulted for various international telecommunications conglomerates. He also is a member of the 2009-10 PHONE+/Channel Partners Conference & Expo Advisory Board.
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