Packets and circuits, oh my

While the middle mile concept may sound new, in actuality, service providers have been providing some form of middle mile service in the form of TDM and, increasingly packet-based services, to other carriers for a number of years.  

First, there are the traditional IXCs (Sprint Wholesale) and competitive carriers (Level 3 and 360 Networks) that in recent years have created programs to target smaller cable operators and ILECs with wholesale capacity and related turnkey services.

Sprint Wholesale, for example, offers a turnkey voice service for cable companies. A cable company that wants to launch its own VoIP service can leverage Sprint's network expertise to get a voice network up and running without having to build out its own facilities. Sprint's wholesale VoIP service continues to pay off. In its second-quarter earnings statement, the IXC said it was serving about 4.7 million VoIP customers through its cable operator relationships.

Then, there are Tier 2 wholesalers such as Idaho-based Syringa Networks and Columbia, S.C.-based Palmettonet, which were formed by Tier 2-3 ILECs for serving their internal needs for network capacity.  

As the middle mile providers extend their prominence and their customer's needs grow, so will the diversity of services. 
Wholesale operators and states likely will offer their rural middle mile different services, including everything from traditional TDM transport (DS-3s) as well as VoIP, and of course Ethernet services. Along with voice services, it's not hard to imagine that Ethernet will be part of the middle mile equation. 
As state funding for new health care facilities eventually gets funneled to their recipients, the Ethernet circuits could be leveraged by rural health care providers to communicate with large hospitals in bigger cities.  

However, the use of Optical Ethernet, and Ethernet services in general, likely will depend on the needs of individual independent ILECs and their respective customers. 

Mueller believes that most of his potential ILEC ‘middle mile' wireline customers most likely will be purchasing traditional TDM-based DS3 circuits, while WiMAX operators would leverage a microwave-based connection to their POPs. As for IP/Ethernet, they plan to offer the service at speeds of 10 Mbps and up.  

"We are rolling that product out, but it would really too early to tell how high the demand would be," Mueller said. "We have 17 underserved markets, and  by definition, these are very rural underserved markets, so we think from the LEC CO a DS3 circuit is probably going to be ample."

Similarly, Syringa Networks' CEO Greg Lowe, said packet services are growing. The Idaho-based wholesale consortium is seeing more Tier 1 and Tier 2 cable providers purchase packet-based services.

"The real growth is coming around anything that needs IP bandwidth," Lowe said. "It's just exploding."

Packets and circuits, oh my