Understanding Ethernet Options

At PAETEC we see a lot of customer confusion about Ethernet options. Everyone is asking for it and every carrier claims to deliver it but frequently both parties are on different pages and the customer gets a sub-optimal solution. Here's how to get the solution you need.

First, let's talk about the delivery mechanisms for Ethernet services. I'd argue that there are three common types of delivery:

  1. Adding an Ethernet handoff to a traditional TDM (T1, DS3 etc) circuit - These aren't really Ethernet networks at all, just Ethernet handoffs. With this approach the customer gets an Ethernet interface to a Layer 3 (DIA or MPLS) service but the network does not actually support any Ethernet functionality (VLANs etc). However, for many DIA customers this can be an attractive way to reduce the cost and complexity of their router interface with the carrier, using familiar low-cost Ethernet technologies rather than expensive WAN interfaces.
  2. Ethernet over X - Given the ubiquity of T1, DS3 and DSL circuits many carriers now deploy solutions that allow native Ethernet services to be delivered over these long-standing WAN technologies. These solutions are bookended with advanced CPE deployed at the customer premise that communicates with a matching (but larger) box at the carrier POP. These solutions generally support full Ethernet functionality (VLANs, QnQ, jumbo frames etc)
  3. Native Ethernet / true Metro Ethernet - This is what most customers have in mind when they ask for Ethernet. In this case the carrier has fiber to the building that is integrated into a native Layer 2 Ethernet architecture. Not just fiber, but fiber that connects to carrier-grade Ethernet switches. While carriers are adding buildings to their network daily this solution is not available for business at an economical price point.

So which solution is right for your business? It depends what you want to accomplish. The most common reason customers ask for Ethernet is they simply want the lowest cost per megabit for a DIA or MPLS application. In this case any of the solutions will work and you can simply ask for a range of bandwidth and allow the carrier to find the most cost effective option. Unfortunately customers frequently end-up with a higher cost per megabit because they request specific bandwidth increments that are not economical to deliver. For example, 50Mbps is almost never economical to deliver. Unless true metro Ethernet is available in your market 50Mbps will likely be delivered using two DS3s. Likewise 100Mbps will frequently be delivered using an OC3. In both of these cases a significant portion of the circuit is going unused. In general we think customers get the most cost effective solutions when asking for a range of speeds. For example asking for quotes for 45-50Mbps or 100-155Mbps will likely result in one option that has a significantly lower cost per meg than the other options.

Of course some customers are looking for specific Ethernet WAN networking capabilities. Drivers for this range from needing to span a single subnet between multiple datacenters to enterprises wanting more control over their routing and IP addressing than carriers can offer in traditional MPLS WANs. For these applications the carrier will need to provide native Ethernet capability to the customer premise using the second or third delivery mechanism. The best solution will most likely be delivered using a cost-effective blend of Ethernet over X solutions. At PAETEC we can use a choice of all three methods. Native Ethernet can be delivered utilizing PAETEC owned facilities or through partnerships with other carriers. Ethernet over Copper most commonly is used for sites in the sub 40Mbps range which allows for a low cost solution. For other locations we will use bonded T1s or DS3s as needed to deliver the requested bandwidth.