Don't forget the Bells

FRAMINGHAM (09/19/2003) - It's fashionable for carriers specializing in Ethernet services to scoff at the Bells' metropolitan Ethernet focus. "Look at Verizon and how many fronts (where) they have a war going on," says Yipes CEO Dennis Muse, alluding to the possibility that Ethernet services might not be a top priority for Verizon as it battles cable operators in broadband access, cellular competitors in wireless and interexchange carriers in long-distance.

Others say the Bells have been slow to get into metropolitan Ethernet in an effort to avoid cannibalizing lucrative frame relay and other services.

But some Bells argue that they are more successful and innovative when it comes to Ethernet services than the specialists.

Take BellSouth, which has been offering its Native Mode LAN Interconnection metropolitan service for nine years. Bob Smith, senior director of data transport services, says Ethernet service is his company's best-selling enterprise data product, although he declines to say exactly how many customers use the offering across its nine-state region. He says that three in 10 customers use Ethernet to replace frame relay and that the economics of doing so are compelling: A BellSouth frame relay T-1 line starts at $400 per month, whereas a customer can get more than six times the bandwidth for less than double the price with a $750-per-month 10M bit/sec Ethernet connection.

One reason for the success, he says, is that BellSouth sells its offering as a transparent LAN service, providing connectivity between local buildings at 1M bit/sec to 1G bit/sec speeds. He says competitors tend to market their services simply for Internet access, which he says wastes Ethernet's potential.

BellSouth has plenty of enhancements in the works for 2004, Smith adds. Among them are:

* "Mid-band" services ranging from 2M bit/sec up to 10M bit/sec.

* Committed bandwidth rates in 20M bit/sec increments.

* Traffic prioritization for voice over IP and other applications.

* Support for multicast traffic.

* Auto-protection, involving switching Ethernet traffic to SONET-based rings.

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