FierceTelecom: Along with the financial vertical, government is another big market for Intellifiber with the Department of Defense (DoD) lighting up its five hundredth circuit. Talk about the challenges and opportunity to serve the government/public sector market.
Heiden: It's very similar to the corporate enterprise because they are not just going to buy off a list at a price. One of the challenges is that the government expects you to be at a very competitive price. They in some respects try to commoditize you at the price level. At the same time, if you can get into a position where you're doing the volume we're doing, it's a very rewarding scenario to be in.
For us it was about getting the trust established. Not only do you have to have the price, but they have to trust the fact that you will deliver. Ultimately, they also want that same customer service that we talked about when we launched Intellifiber that everybody does. If you can find a way to get the government's trust, treat them as you would treat any Fortune 500 customer, it becomes a great customer for you.
FierceTelecom: Getting back to services, how much is Ethernet over Copper part of your service lexicon?
Heiden: This is a great example of us working with Cavalier as a partner and looking at a product they had developed for the SMB direct marketplace. We were also looking at how we could offer the Ethernet over Copper service to other carriers so they could enable their enterprise sales force. With a single NNI, you offer access to 100,000 buildings that our Ethernet over Copper footprint hits and you give customers a scalable upgrade path from a T1 or a bonded T1 to 20 Meg. It could also play a role as a carrier tries to lower its cost basis to deliver service. This enables them to reduce cost while allowing their customers to have a scalable upgrade path.
FierceTelecom: What are the challenges you face in going out of region with Ethernet and establishing NNIs and interconnection agreements with other carriers? Do you see value in the new emerging Metro Ethernet standards and the advent of the carrier Ethernet exchange model to help further expand growth?
Heiden: Yes, they are tools. To be very honest, our Ethernet service has been very interesting to us within our own region and footprint. Outside of it, we have not seen a lot of need to be doing things en masse and where we have it tended to be a one-off custom solution where we partnered with another provider. I think the thing Ethernet exchanges allow us to do is because it's fairly minimal in cost to join, we're joining some of these exchanges in the course of the next couple of weeks. Because of the cost and effort related to that and the value picked up by those carriers that could access my 100,000 buildings that are effectively EoC on-net, we take that as a great win to open up our platform.
Where my enterprise effort starts to drive me to have a larger out of region network capability because it's low cost it's a win-win for us. My volume today is not large, but it's something we should be participating in. It's how do you future proof your network? The one thing you want to do is take advantage of things that can drive value into your network without causing undue harm. I think [Ethernet exchanges] allows us to do that. We'll see how many make of them it, but we're certainly of the one or two we have joined.
What's interesting is that there were a few where the cost was substantial enough that we backed away. We went with some of the guys that are purely focused on exchanges as opposed to those that are doing data centers and doing an exchange. You would think the data centers are naturally positioned to take this market, but they might have overstepped their boundaries a bit. The guys focused on the exchanges made it easy for me to join and to expand my network. Once I joined it and it enables me to access let's say Qwest, why would I want to sign up with the other one to access Qwest? We're in one or two that we think work.
Intellifiber reaches connection milestone with U.S. DoD
Intellifiber establishes low-latency NY to Chicago network route