Ethernet goes small-time

The growing EOC push also may change the Ethernet landscape. Up to eight copper pairs can be bonded to offer up to 45 Mb/s of service, said Gary Bolton, marketing director for Hatteras Networks. “The cost of adding extra pairs is $9 to $11 a month [in line charges],” he said, “so they can deliver a lot of bandwidth at a relatively low cost. They can also offer a different class of service for each service on the link: VoIP, video-conferencing, mission-critical data, best-effort Internet.”

Cogent's Schaeffer thinks the market will only get more competitive — including on price. “As this becomes more of a mainstream technology, SMBs are more comfortable with it,” he said. “I think prices of all wireline telecom services continue to fall, so the consumer benefits, and at the end of the day, we are in a very deflationary industry. We deliver more bits over more miles for less money. Carriers will have to have a business model that allows them to do that and remain profitable.”

The main thing holding Ethernet back as an SMB service has been availability, said Rosemary Cochran, founder of Vertical Systems Group, which tracks the Ethernet market. With the cable companies now stepping up big time — both Cox and Time Warner Cable are in the top 10 providers in the U.S. based on Ethernet ports — and AT&T joining the CLECs in offering EoC, that might change. Verizon has even become more aggressive in connecting businesses to its FiOS network, she said, but there is still a ways to go before Ethernet is mainstream on Main Street.

“Service availability is one of the major inhibitors right now, one of the gaps,” Cochran said. “It's still particularly true in smaller cities and towns — a small business can't call up the incumbent and get service.”