EoC makes a new dent in Ethernet market

By Sean Buckley

Despite the allure of fiber-based Ethernet, the reality is that no service provider—even a large one—can justify bringing a fiber connection to every building in its footprint.

Ethernet over Copper providers

(Image source: iStockPhoto)

Enter Ethernet over Copper, or EoC. With this method of delivering Ethernet over existing copper wiring, a service provider can deliver higher speeds, ranging from 2-100 Mbps and beyond, at a lower cost to businesses versus having to purchase more traditional T1 circuits or jump to a TDM-based DS-3 circuit to get 45 Mbps.

"While EoC typically can't go head-to-head with fiber access, it's an alternative venue that takes advantage of the popularity of Ethernet access to IP services for businesses," said Brian Washburn, research director of network services for Current Analysis, in a recent interview with FierceTelecom.

Here's a breakdown of the key EoC players:

  • CenturyLink: Through its 2010 acquisition of Qwest, CenturyLink (NYSE: CTL) instantly expanded its presence in the EoC segment and the business services arena overall. Since then, the service provider has been continually expanding its EoC footprint in both the former Qwest territories and CenturyTel/Embarq territories. In Q4 2012, the telco increased its EoC footprint by more than 80 percent to over 700 Ethernet-enabled central offices. Sales of Ethernet services overall helped drive up its Enterprise Markets – Network revenues to $346 million in the quarter, a 7.8 percent increase over Q4 2011.
     
  • Windstream: What sets Windstream (Nasdaq: WIN) apart from the top four U.S.-based ILECs is that it operates in a hybrid CLEC-ILEC model through its acquisitions of NuVox and PAETEC. It has a two-pronged strategy for EoC: First, it includes bonded T1s over copper, which enables it to provide higher Ethernet bandwidth data services to customers that may be located deep in its CLEC or ILEC networks. Second, Windstream offers a conventional EoC service over available dry copper pairs. Depending on distance, copper pair availability, and the distance the customer is from the CO, the telco can deliver, in some instances, up to 200 Mbps of bandwidth over existing copper.
     
  • MegaPath: Out of this group, MegaPath has taken one of the most aggressive stances on EoC, extending the service nationwide in the top 50 U.S. markets. Existing and new customers can use EoC to access MegaPath's Core MPLS network and Quality of Service (QoS) capabilities to ensure their applications get the necessary support. Currently available in 693 U.S.-based ILEC COs around the country, the CLEC began offering the service in six new markets: Las Vegas, Richmond, Va., San Antonio, Hartford, Conn, and Jacksonville and Tampa, Fla. It is complementing its EoC reach with VDSL2. The CLEC's EoC offering supports three tiers:  2-20 Mbps EoC, VDSL2 clear channel T1s and fiber-fed services.
     
  • XO Communications: Like CenturyLink, XO was one of the early adopters of EoC. The CLEC's experience combined with what Sam Koetter, senior product manager, Ethernet services for XO, calls "owner economics," which means that unlike other players it owns its network and the connections to the ILEC COs, and can control QoS for its customers. One of the big highlights of XO's ongoing EoC drive was the introduction of its 100 Mbps speed tier last November coupled with plans to extend its overall Ethernet service reach to almost 2 million buildings. This means that customers can take advantage of a broader range of speeds that scale from as low as 3 Mbps to 100 Mbps. While XO's primary focus with all of its Ethernet products has been on providing symmetrical service, the CLEC plans to start offering an asymmetric Ethernet service tentatively at the end of the year. "Everything we have focused on so far has been symmetrical services, but one thing we're looking at is some asymmetrical services," Koetter said in an interview with FierceTelecom. "It would be something like 20 Mbps down and 3 Mbps up at a much lower price than our current symmetrical service."
     
  • Cbeyond: Cbeyond (Nasdaq: CBEY) has been growing its presence in the CLEC market, providing a set of managed and, increasingly, cloud-based services that had been previously only available to larger businesses. Throughout the past year, Cbeyond has expanded the availability of its Metro Ethernet services, including fiber and EoC, through various telco and competitive provider partners such as Zayo and FiberLight. Last month, the CLEC revealed that its overall Ethernet footprint now reaches over 190,000 multi-tenant units (MTUs) in the United States. It has Metro Ethernet coverage in over 150,000 of the buildings it has in its 14 markets, providing up to 10 Mbps or higher. James Geiger, co-founder, chairman, CEO and president, said during the company's Q4 2012 earnings call that while it fell slightly short of its goal to have 50 percent of its revenues coming from Ethernet, it did reach the 40 percent range. "We had 22 percent of our base on our own Ethernet-over-copper and another 3,000-plus customers will be in the 1,000 buildings that we light on our own fiber."
     
  • Integra: Initially focused primarily on the small to medium business (SMB) market for much of its 13-year existence, Integra has been realigning its focus to pursue larger business accounts over the past two years. Under the leadership of Level 3 Communications (NYSE: LVLT) co-founder Kevin O'Hara, the CLEC changed its name to Integra, dropping "Telecom" from its name earlier this month. Complementing its growing base of on-net fiber-based Ethernet, Integra has been aggressively expanding the rate and reach of its EoC network. Last fall, Integra debuted a 60 Mbps symmetrical EoC service, extending Ethernet service into areas that it can't currently can't reach with fiber. Offering double the capacity of its previous 30 Mbps offering, its 60 Mbps EoC service is available throughout its 11-state network. With EoC, Integra said it can reach over 400,000 businesses and is carried over its fiber-fed Local Service Offices (LSOs) that are linked to the company's fiber backbone.
     
  • TelePacific: While mainly focused on the California and Nevada markets, TelePacific has also been growing service presence through a mix of organic efforts and acquisitions. The CLEC recently announced that it is doubling its current EoC 100 Mbps data rates up to 200 Mbps via its Enhanced Ethernet over Copper (EEoC) access ecosystem in California and Nevada. By providing EoC out of 247 LSOs in California and Nevada, the company is putting Ethernet service into an estimated quarter-million small to medium-sized businesses within reach of Ethernet-based broadband services. Outside of California and Texas, TelePacific is also expanding its EoC presence in 145 wire centers in Texas, a market it entered through its acquisition of fellow CLEC Tel West in 2011. Going forward, TelWest agents will soon be able to sell other pieces of its parent's portfolio, including its SIP trunking and dynamic voice and data services, hosted PBX and 1Net MPLS VPN solutions.
     
  • Alpheus: Led by a partnership between cable entrepreneur Scott Widham, Alpheus is finding great momentum providing a mix of retail and wholesale services in the DASH (Dallas-Austin-San Antonio-Houston) market. By taking a two-pronged effort that includes both fiber and EoC, the CLEC can now deliver the service to 94,000 business addresses. Having already equipped 123 COs, the CLEC will enable EoC in more COs in the South Texas region, and has set a goal to have the service in every CO that has a colocation agreement with AT&T (NYSE: T).
     
  • Spirit: Primarily focused on selling services in North and South Carolina, Spirit has been expanding its EoC reach in these two states leveraging Overture Networks equipment. As of the beginning of this year, the CLEC had 28 EoC-equipped LSO end offices up and running. Later this year, it plans to take EoC service to Aiken and North Augusta, S.C., as it completes a fiber project in that area. While it can achieve higher rates, Spirit said that the majority of its SMB customers it has installed on EoC are using between 3 and 10 Mbps, adding that in a few situations they have provided up to 25-30 Mbps to specific customers that required higher speeds.

All of these players may be different in their scale and focus, but the one thing they have in common is they are using EoC to help close what Vertical Systems Group calls the "fiber gap."

At the end of 2012, fiber penetration for the U.S. business market increased to 36.1 percent, up from 31.8 percent in 2011. While it's encouraging to see more buildings being equipped with fiber, there are still an estimated 64 percent of businesses that will be without a fiber connection for the foreseeable future.

Take a look at these EoC players' metrics in the following chart.

EoC makes a new dent in Ethernet market
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