Comcast Sees Burgeoning Carrier Ethernet Business

CEN Feature (Jul 26 2011) Cable / MSO

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   Cable companies are uniquely positioned to pursue growth opportunities in the Carrier Ethernet market — and by leveraging those unique qualities, cable companies can realize some significant market advantages, as Kevin O’Toole, senior vice president, Business Product Management and Strategy for Comcast pointed out in a recent, candid interview.

   “The typical incumbent has dominated the mid-market segment forever,” said O’Toole. “And because competitive carriers often rent their platform from the phone company, the customer isn’t necessarily getting the benefits of any new assets.  Comparatively, Comcast actually brings a different last-mile connection to our customers. It’s our own facility, it’s fiber, and if there is a problem, we don’t have to go off-plant and call the phone company – we can resolve issues for our customers ourselves.”

   Cable companies round out their value proposition with competitive pricing, meaning their ultimate differentiation points are “diversity, reliability, and price,” O’Toole said. Accordingly, typical Comcast Carrier Ethernet customers are mid-size businesses, schools, local governments or any organization that is looking for “speed, reliability, and scalability without the high cost,” he adds.

   As more and more organizations turn to cloud computing, O’Toole makes the astute observation that they are essentially “doubling down on the importance of the last mile.” As a result, organizations are increasingly reluctant to rely on incumbent carriers whose bandwidth comes in increments of 1.5 Mb/s, O’Toole said.

   Unlike many competitive carriers, Comcast currently does not reach any customers using copper leased from incumbents. O’Toole noted that “it’s probably not fair to say we would never do it in the future, but we’re unlikely to do much on other peoples’ networks.”

   Backhaul Opportunities

   Like many cable companies, Comcast is also seeing a lot of Carrier Ethernet business from wireless companies wanting higher bandwidth to their cell towers. The backhaul connections that the company supports run over the same infrastructure as its business service offerings – and that’s actually a selling point for potential enterprise customers. Comcast can tell prospective customers that “we have had the opportunity to battle-test the network based on the needs of some of the most demanding customers — for example, wireless network operators,” O’Toole said.

   O’Toole said that with this real-world testing, both business service and wireless backhaul customers have “confidence in the scale of the network and the operations behind it.”

   As for the specific needs of wireless operators, O’Toole notes that, “if you’re not reliable, you can’t even have a conversation with wireless decision-makers”. Beyond that, he said, wireless operators are looking for scalability in two different dimensions. “They want to start with 20 Mb/s to the site, with 10 Mb/s for data and 10 Mb/s for pseudo-wire backhaul for TDM traffic, and they want to be able to add more data in an operationally efficient manner.”

   The other dimension of scale, O’Toole said, is the number of sites that a backhaul connectivity provider can serve – and that’s a requirement Comcast is particularly well suited to meet. “With service in 20 of the top 25 markets, we have excellent scale allowing us to serve large numbers of wireless towers.”

   For now, Comcast is focusing on offering Carrier Ethernet connectivity within metro markets. “That’s where we bring the best new value – where people haven’t had good choices for the last mile – and that’s where we’re strongest,” O’Toole said.

   Looking to the future, O’Toole says that because Comcast does operate its own backbone network to support its traditional residential business, the company could repurpose that backbone to connect Carrier Ethernet services between metro markets.

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