MCI is beefing up its Ethernet service portfolio with new offerings, enhancements to existing services and a project to rebuild its access network, as it looks to compete more effectively against the likes of AT&T, Time Warner Telecom and Verizon Communications.
MCI, which emerged from bankruptcy protection earlier this year, announced its new nationwide Ethernet service on Tuesday, along with upgrades to existing Ethernet services. Separately, the carrier announced a new architecture for the access portion of its network that will make it easier and more cost-effective for MCI to offer these services.
Ethernet has become a popular technology for linking corporate offices, because it provides customers with more bandwidth at a lower cost. For example, most carriers offer 10-megabit Ethernet services for twice the price of a T1 (1.5mbps) line, giving customers almost seven times the bandwidth for double the price, said David Parks, senior analyst at The Yankee Group. It also allows carriers to cut costs.
The Yankee Group recently surveyed 278 large companies that subscribe to Ethernet services. About 75 percent used Ethernet for Internet access. Roughly 55 percent said they used Ethernet to connect offices in the same city or metro network. And about 40 percent said they were using Ethernet to connect offices between cities. Carriers like MCI are starting to offer new services and differentiate their services from one another to win customers, analysts said.
To date, MCI has sold its Ethernet private-line service only to large companies linking offices within the same city. Beginning in August, it will offer the service to customers connecting offices nationwide. The idea is to enable customers to build a single virtual Ethernet network throughout the country so that employees in New York, Boston and San Francisco will feel as if they're right down the hall from one another.
Other carriers are also offering Ethernet LAN (local area network) services over long distances. Earlier this month, Time Warner Telecom announced that it has service available in 44 cities in the United States. Last week, Verizon announced plans to offer it in 35 domestic markets. And AT&T claims that it has been offering long-distance Ethernet services across its network nationwide for a long time.
"Carriers are starting to offer these services, because it's what customers want," Parks said. "As enterprises become more familiar with Ethernet services in the metro, they want it extended to their offices in other cities."
MCI plans to expand its offering internationally later this year, said Ralph Monfort, director of Internet access products for the carrier. MCI already offers metro Ethernet services in parts of Europe, Africa, the Middle East and Asia.
MCI also announced enhancements to two existing Ethernet services. First, it increased data rates for its metro private-line Ethernet service, which provides connectivity between two locations. Beginning in August, the available speeds will include 10mbps, 40mbps, 100mbps and 1GBps. And the company is adding storage protocols to its offering, including Fibre Channel, FICON (Fibre Connection) and ESCON (Enterprise Systems Connectivity).
The company also plans to expand its Internet Ethernet service from five markets to 25 markets, starting in September.
MCI also announced on Tuesday that it's building a new access network that will allow it to provision these services faster and cheaper. The new infrastructure provides network access over packet technology rather than over a time division multiplexing, or TDM, hierarchy.
Traditionally, communication services have been provisioned on separate physical TDM facilities. For example, a voice circuit is provisioned for telephone calls, and a separate circuit is provisioned for data traffic.
MCI's new architecture enables both services to be provisioned over a single Ethernet connection. It reduces network complexity and enables customers to upgrade bandwidth on their services within hours rather than in weeks, which is typical of today's traditional TDM-based services. In the future, MCI plans to allow customers to manage their networks via a Web-based portal.
"As an industry, we've done a good job building networks that transport data services over the core," said Jack Wimmer, vice president of network architecture and advanced technology at MCI. "But we haven't changed how we connect customers to that network. MCI is changing that last frontier so that we provide one pipe into the building and size it to handle all the different services."
Analysts said the new architecture is a big step for MCI, because it helps reduce the complexity and cost of MCI's internal network. Over the years, MCI's IP network has gotten more complex, as it patched together different networks it had acquired from other providers.
"The new architecture should go a long way in settling the complexities of its internal network," said Brian Washburn, senior analyst of network services at Current Analysis. "But most other carriers don't have as many different legacy networks to deal with as MCI, so it might not be as big a deal for them."