Vertical Systems Group's latest stat flash about the penetration of fiber into businesses once again illustrates the ongoing and unfortunate fiber disconnect that exists between the big ticket enterprises that can shell out hundreds of thousands and dollars and the smaller office that probably struggles to afford the price of a telco T1 line. And if you ever get a chance to talk with Rosemary Cochran, Principal at Vertical Systems Group about business services trends, especially Ethernet, chances are she'll tell you that fiber availability belongs to a concept that Vertical calls the "three gaps" to Ethernet. Those three gaps are quite simply: fiber availability, speed and pricing.
Given the fact that fiber is the optimum medium to support higher speed services such as Ethernet that typically begin at 10 Mbps and above, there's a large disparity between low-speed connections (T1 and lower) commonly used today and the 10 Mbps Ethernet entry point.
Pricing is also an issue. SMBs, especially those on the smaller end with a dozen or so employees, can't pay for a 10 Mbps Ethernet line and probably don't even need that much speed--instead requiring somewhere in between 2-10 Mbps.
It would be easy to ask what does an SMB need with a fiber-based connection? Okay, so maybe the corner pizza shop doesn't need a 2-10 Mbps fiber-based connection, but there are a number of very sophisticated vertical segments in the broader SMB segment that could benefit with a connection beyond 1.5 Mbps.
Typically, the options for businesses have been relatively static. If you can't afford to purchase, or don't need a full 45 Mbps-based DS-3, the local telco is more than happy to sell you multiple T1 lines, an option that quickly proves to be an expensive service to manage.
Take Next Generation Radiology. Having few options, NGR had to initially put three T1s at each of its four sites, a solution that became nothing more than a band aid. NGR found hope in Cablevision subsidiary Optimum Lightpath's 10 Mbps fiber-based Ethernet service. "By putting in the 10 Mbps pipes, we were able to get rid of 12 T1s and three fat pipes," explained Frank Robbins, IT administrator for Next Gen Radiology. "It got rid of a tremendous amount of hardware for me."
Then there are other SMBs that only have one office and aren't located in OLP's territory. There is some hope for those that want higher speeds beyond T1, but can't afford the rigid jump to a 45 Mbps DS-3 connection. One option is bonded copper. Pioneered initially by the former BellSouth (now AT&T) and XO Communications, a growing number of competitive providers and independent telcos (ONE, Integra Telecom, and Windstream) all offer Ethernet over Copper solutions in bandwidth increments that can go as low as 2 Mbps up to 10 Mbps and beyond if required. Then, there are the cable guys. Large MSOs (Cox, Comcast, Time Warner and Charter) initially have been targeting the SMB space with both DOCSIS 2.0 and 3.0 cable modem service with up to 50 and increasingly 100 Mbps services in addition to Ethernet over HFC services.
Large operators aren't the only ones getting on the high speed SMB services train. Ironically Oregon-based independent ILEC Canby Telcom already can provide both large businesses fiber-based Ethernet and related speeds (10, 50 and 100 Mbps) services they often can't get in other regions. "At their corporate headquarters in a different state they can't get Ethernet even though they want Ethernet here and put a WAN they can't complete the network because of their local larger telephone company," said Keith Galitz, president of Canby Telcom.
All of this points to the reality that while fiber is great if you can get it, for most SMBs the availability gap is something that's not going to be easily overcome anytime soon. -Sean
