Abstract

There is an expectation in the marketplace with respect to Ethernet and the connectivity it provides. The key issue for Enterprises has been that Ethernet has been free within the building; once they have purchased the equipment. Now they want to use it as a connectivity tool to other buildings both within the company and externally to vendors, customers and partners. Carriers have built an infrastructure that provides this connectivity between the buildings. The infrastructure was not designed and built with Ethernet traffic in mind. To give customers what they want; Ethernet, and to try to use the installed infrastructure to deliver the service the Carriers have had to make new investment. To recover the cost of this investment, the Carriers are asking Enterprises to pay money for it as a service. This is where the expectation and the reality of the Service begin to diverge. Firstly, no one can determine a market value for Ethernet services based upon the cost of equipment to provide the Ethernet service. If the expectation is to get as close to “free” as possible then no one can win. Carriers cannot invest to lose money and subsequently Enterprises will not get Ethernet connectivity between the buildings and they will be forced back to buying the traditional set of services they had been buying from Carriers; but probably at a different, higher rate. There are a lot of business cases being proposed for profitable Ethernet service delivery for Carriers. We do not know how any of them work with out Ethernet service volume and density.

© 2006 Optical Society of America