Tuesday, February 12, 2008

Why Ethernet is Cheaper

You may already know that T1 and DS3 line service prices have plunged over the last few years. But are you aware that there is an even better bargain available for companies that need bandwidths of 10 Mbps or more? It's a networking technology that you already know. It's Ethernet.

But isn't Ethernet a local area network protocol? Yes, but now it's a wide area network protocol as well. It goes by the names Ethernet WAN, Metro Ethernet, Carrier Ethernet and Ethernet Transport. All of these refer to an Ethernet connection provided by a carrier that plugs into your network router or switch. No special equipment is needed for you to use an Ethernet WAN connection. You just plug into the RJ45 connector and you have signal.

Ethernet in the WAN may seem like the height of convenience and probably worth paying a premium for. But the irony is that Ethernet service is cheaper, not more expensive, than traditional copper or fiber wireline services. How much cheaper? If all you need is a T1 line or T1 PRI for your PBX, then you are likely to get your lowest total cost with those services. But once you need to expand bandwidth for dedicated Internet service or point to point data transfers, Ethernet starts getting competitive. At the T1 line or DS3 service level of 45 Mbps, you might find a Fast Ethernet connection both faster and cheaper. The bandwidth of Fast Ethernet is 100 Mbps but the price might be half or less than a DS3 connection.

The difference is even more dramatic when you move up to Gigabit Ethernet or GigE service. That's 1,000 Mbps, a bandwidth that has been cost prohibitive for all but the largest companies. Up to now, anyway. SONET fiber optic service at the OC-24 level of 1.244 Mbps isn't all that common. Most likely you would need an OC-48 pipe running at 2.488 Gbps to transport your Gigabit bandwidth requirement. Costs can easily be into six figures per month for that level of optical transport. Bring in GigE service and you're 1,000 Mbps may be had for up to an order of magnitude less.

This can't be right, can it? Amazing as it sounds, Ethernet WAN bandwidth really is a huge bargain. The reason for this comes down to competitive carriers. If you need SONET service, at least the last mile fiber connection is likely to be provided by the incumbent local telephone company. Telcos developed the TDM or Time Division Multiplexing technologies that include SONET to bundle hundreds and thousands of telephone calls into compact digital trunk lines. They have a huge legacy investment in building out TDM networks.

But Ethernet is something new. It originated as a data networking rather than a telephony technology. Newer competitive carriers who built their regional and national fiber optic networks for IP data transport are leading the adoption of Ethernet as a metropolitan and long distance carrier service. They are completely separate from the telephone companies and provide all the connections, including the access jack at your business location.

The cost savings are thanks to very aggressive service providers who see Ethernet as the end-to-end digital service of the future and are anxious to build out their networks and acquire new business customers. Carriers such as XO communications, Telnes, Level 3 Communications, MegaPath, Cavalier, Nuvox and Time Warner Telecom are offering excellent rates on the type of bandwidth you need for video, high resolution image transmission, and CAD/CAM data downloads, to name a few Mbps-hungry applications.

So what are the best prices for various tiers of Ethernet service and which carriers serve your business location? You can find out easily with a quick online service query through Shop For Ethernet. In seconds, you'll get a map showing your location and how close you are to the nearest buildings already "lit" for fiber optic Ethernet service.

Click to check pricing and features or get support from a Telarus product specialist.

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