Global Capacity Marketplace Boosting Carrier Ethernet-over-Copper Connectivity

CEN Feature (Nov 29 2011) Business Ethernet

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   Carrier Ethernet-over-copper services should get a boost from a new offering from Global Capacity − a company that may be best known for its LATTIS access price quote capability, but which now earns most of its revenues from the procurement and selling of network access.

   Global Capacity has created the infrastructure and intelligence to support the prompt delivery of Ethernet-over-copper services from multiple underlying service providers using a front-end interface that will give buyers the ability to obtain the most competitive price.

   This may sound a lot like a Carrier Ethernet exchange, but as Global Capacity EVP of Global Network Strategy Greg Hough explains, Global Capacity’s business model is different from a Carrier Ethernet exchange in several key ways.

   For starters, Carrier Ethernet exchanges are focused primarily on Ethernet-over-fiber, giving network operator participants the ability to identify which other network operators offer service in a particular building. Global Capacity has taken that idea a step further by developing a system that can determine what level of Carrier Ethernet-over-copper services a building can support.

   This is obviously a more complex task because in order to determine whether EoC is available in a building, it’s necessary to know the incumbent central office from which that building is served, which competitive providers have co-located EoC equipment in that central office and the distance between the building and the central office. Global Capacity has put together a system that knows all of that information and can use it to calculate what each network operator would charge for EoC service at a certain bandwidth and with a certain set of service parameters. Global Capacity customizes this capability for individual customers, including network operators and large enterprises, based on their negotiated rates with other network operators.

   Another key difference between Global Capacity’s model and the traditional Carrier Ethernet exchange model is that Global Capacity is more than just a matchmaker. Customers also will be able to buy access connectivity directly from Global Capacity. In order to be able to offer competitive prices, Global Capacity plans to buy higher-speed Ethernet connections from underlying network operators and sell off lower-speed links that run over those connections. Global Capacity won’t have an underlying high-speed link for every connection — and where it doesn’t, it will offer customers the option of being their direct supplier through a resale agreement with the underlying carrier.

   What Global Capacity tells participants in the exchange is, “We’ll provide you price quote automation for free as long as we can compete for access services,” explains Hough.

   “An exchange has to be transparent on cost and effective on delivery,” adds Hough — and that, he says, is where Global Capacity excels.

   Customers will have the option of using Global Capacity’s system just to get price quotes or, if they prefer, they can hand off responsibility for all of their off-network connections to Global Capacity and buy everything through Global Capacity.

   If customers choose the second option, they purchase just a single network-to-network interface (NNI) with Global Capacity at one of its five interconnection points — in New York, Atlanta, Dallas, Chicago, or Los Angeles — and over that interface, they will be able to connect to any other network operator with whom Global Capacity has an NNI.

   “Our value there is the ability to obtain and apply rates for vendors that aren’t readily available in the market,” notes Hough. As Global Capacity integrates carriers, he says, “that value proposition will be enhanced by driving down costs of interconnects and cross connects as well as normalizing delivery and maintenance.”

   All or Nothing

   Hough argues that Global Capacity’s presence in the EoC market should help prevent overbuilding. He points to what happened with DSL as an example of what network operators should not do. When network operators co-located DSL equipment in incumbent central offices back in the 1990s, some central offices ended up with more co-located network operators than the business could support. But by offering network operators an easy way to identify where EoC is already available and to easily buy EoC connections from each other, Hough believes Global Capacity should be able to prevent a reoccurrence of what happened with DSL.

   Hough also argues that Global Capacity should benefit from an important trend he sees in the market. Wishing to streamline operations, he is seeing more and more end-user businesses saying they want all locations connected via Carrier Ethernet or, if that is not available everywhere, all connections will be connected via TDM. The businesses don’t want to maintain a mixture of two types of connectivity. Few network operators can deliver Ethernet everywhere, but by working with Global Capacity, they increase the likelihood that they will be able to serve all of a key business customer’s locations.

   Global Capacity has seen a huge increase in the number of Ethernet quotes it has processed, and Hough believes that has been driven, in large part, by end-user businesses wanting to use Carrier Ethernet everywhere — a trend that bodes well for Global Capacity moving forward.

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