Ethernet is the world's dominant machine-to-machine (computer-to-computer) interface protocol, with interfaces on more than 300 million computers worldwide—and it is fast becoming a potent force in metro and wide-area communications.

Carrier Ethernet is still in an early growth stage. Second only to IP in terms of growth potential and influence on the communications market, Ethernet has become an increasingly prominent feature of the national data networking landscape in the US. As of late 2006, Ethernet services are available from virtually all major data service providers, including incumbents, second-tier carriers, and smaller specialized players differentiating themselves by price, technology, and flexibility.

Until recently, Carrier Ethernet services have generally earned the label “metro Ethernet.” The large majority of Ethernet service has been, and still is, between points within a metropolitan area. It is only relatively recently that Carrier Ethernet has become a more widely accepted service available into the long-haul, though this has not been marketed in any significant way. This may change in 2007 as major incumbents—particularly AT&T and Verizon—plan to introduce long-haul Layer 2 virtual private networks (VPNs) in 2007.

INSIGHT's use of the term “Carrier Ethernet” refers to any Layer 2 public network service that extends Ethernet beyond the local area network (LAN) and connects to customers through Ethernet interfaces. Carrier Ethernet may be marketed as transparent or native LAN, Ethernet, Gigabit Ethernet, GigE, metro Ethernet, Ethernet private line (EPL), Ethernet virtual private line (EVPL), Layer 2 virtual private network (VPN), Ethernet access, virtual private LAN service (VPLS), or a variety of other names. INSIGHT's definition does not, however, include routed Layer 3 IP-VPN services, which also carry IP over Ethernet. Carrier Ethernet services include relatively longstanding legacy transparent or native LAN services, whether asynchronous transfer mode (ATM)-based within the network core or using an Ethernet over fiber (or SONET) architecture. Our definition also includes newer services from small and large carriers that variously deliver end-to-end Ethernet directly over optic fiber, encapsulate Ethernet packets in SONET, or transmit it over dense wavelength division multiplexing (DWDM) wavelengths or as Ethernet over multi protocol label switching (MPLS).

Ethernet can be segmented by its speed (<=10Mbit/s; >10Mbit/s-100Mbit/s; 100Mbit/s-1Gbit/s; >1Gbit/s), by the nature of its sale (retail vs. wholesale), by the region the service covers, and by topology, which refers to whether the service delivery can be characterized as E-line or E-LAN.

E-line is an Ethernet service structurally similar to a private line. E-line point-to-point service provides a Layer 2 private line or virtual private line (VPL) on Ethernet between two locations.

E-LAN service, by contrast, structurally resembles a LAN. It provides the potential for multipoint-to-multipoint Layer 2 service. Each user network interface (UNI) in an E-LAN service connects to a multipoint Ethernet virtual connection (EVC)...

Market Segmentation

Total US Carrier Ethernet Access Revenues:
by Topology:
E-Line
E-LAN
Access
by Regional Domain
Metro
Wide-Area
Access
by Type of Sale
Retail, Wholesale
by Bandwidth Level
greater than 1Gbit/s (1000Mbit/s)
greater than 100Mbit/s up to and including 1Gbit/s
greater than 10Mbit/s up to and including 100Mbit/s
up to 10Mbit/s

US Carrier Ethernet Total Port Estimates by Throughput
greater than 1Gbit/s (1000Mbit/s)
greater than 100Mbit/s up to and including 1Gbit/s
greater than 10Mbit/s up to and including 100Mbit/s
up to 10Mbit/s

Sample Monthly Pricing for:
In-Metro E-Line and E-LAN Services
Dedicated Internet Access

Average Price Range for E-Line and E-LAN Services