Captains of Disruption in the Telecom World: Carrier Ethernet


by Paul Pierron, CEO



Carrier Ethernet continues to dramatically change the Information Technology and business landscapes, evolving into the network platform of choice for organizations requiring high-capacity bandwidth to respond to exploding rates of data consumption.  Today’s streaming Internet content was made for the Carrier Ethernet solution because the network platform is better at delivering streaming voice-data-video without delays, leaving legacy platforms such as SONET-based T1s, with its 1.54Mbps maximum transmission capacity, in its dust.  At the same time, rising demand for faster data access and downloads is creating a growing market need for bigger circuits.  Ethernet offers scalable circuits beginning with the 10Mbps standard, as well as 40Mbps and 100Mbps circuits for even faster access.  As more businesses clamor for greater amounts of bandwidth to access streaming content and better functionality within the cloud, Carrier Ethernet is being positioned to meet the expected global IP demand in the zettabyte era.  This article examines the rise, current industry applications and standards associated with Carrier Ethernet, as well as its forecasted growth as providers look to meet growing demand for bandwidth, reduced jitter and low latency.

The Rise of Carrier Ethernet

In the beginning, Carrier Ethernet connected Local Area Networks (LANs) to one another and was deployed over Synchronous Digital Hierarchy (SDH) or Multiprotocol Label Switching (MPLS) - neither of which offered much flexibility.  According to the Telecommunications Industry Association, today, U.S. telecom carrier growth represents a $1.2 trillion segment of the $5.0 trillion global telecommunications economy.  Carriers are now better positioned to support multiple services and protocols, offering flexibility and scalability, while building the networks needed to deliver high-speed, high-capacity bandwidth.

Carrier Ethernet service is growing to support 4G/LTE deployment and faster content delivery.  While capital expenditures for overall network expansion have remained somewhat flat, investment in U.S. carrier networks for backhaul support of 4G/LTE technology (such as fiber-to-the-tower, or FTTT) has been on the upswing, resulting in $30 billion in new expenditures.  One reason for this fast growth is the uptick in data consumption rates.  Typically known for delivering high performance connectivity that allows access to data anytime, from anywhere, today’s 4G LTE networks are becoming overloaded.  Many (especially those serving major metro markets) simply do not have the backhaul capacity to handle the downstream of Internet traffic generated by a growing volume of sophisticated mobile users.  

The U.S. leads the world with 1.38 Gigabytes of mobile data consumption per month, representing five percent of the world’s wireless connections and 50 percent of all LTE deployments.  This trend is likely to continue due to the rise in cellular device sales.  Cellular carriers are expecting to sell 10 billion cellular devices by 2018, well beyond the seven billion devices sold last year.  Simultaneously, low cost providers are making it easier for wireless subscribers to purchase equipment, resulting in rapid expansion of this subscriber base and greater impact on global IP demand.  Additionally, individuals and businesses alike are ditching telephone landlines in favor of Voice over Internet Protocol (Internet phone service or VoIP) and wireless communications, creating a greater need for a Carrier Ethernet solution, which, unlike legacy technologies, enables provider networks to scale quickly and carry more data by simply adding more cards.

Carrier Ethernet for the Zettabyte Era

All factors point to the need for a better solution to meet heavier IP demand.  It is estimated that global IP will reach 1.4 zettabytes per year by 2017, based on required support of two wireless devices per user. Additionally, global IP is expected to carry 11.2 exabytes of mobile traffic per month by 2017.

To prepare for even greater Internet demand, telecom carriers spent $70 billion on Carrier Ethernet equipment and services in 2013 and expect to spend $100 billion by 2017.   The ongoing effort is paying dividends.  Today, Carrier Ethernet is being delivered to business premises more often than all other legacy technologies combined.

Carrier Ethernet may be best positioned to become the new standard for several reasons:

  • It offers a simplified design and scales as an organization grows, enabling bandwidth-on-demand for peak periods;
  • The ability to handle growing network traffic emanating from Latin America as well as regions such as Asia-Pacific, largely driven by international entities seeking to access information as well as key touch points in the U.S.;
  • Operational expenses are lower because organizations only use bandwidth as it is required, which reduces cost;
  • Carrier Ethernet has yielded better gross margins as well as ROI across the industry;
  • The network infrastructure is flexible enough to perform on multiple platforms including Ethernet over Copper (EoC), DSL, fiber, SONET, DWDM or SDH;
  • It’s granular, which makes it is easier to manage and control and new applications can be added as needed;
  • Carrier Ethernet offers the added benefit of being more secure than the public Internet since it’s delivered over a private, non-shared network;
  • The architecture is more reliable because of redundant equipment, thereby reducing the risk of network failure;
  • Unlike other network solutions, Carrier Ethernet delivers information at the speed of light, which is the fastest bandwidth speed available today; and
  • There is less risk of jitter and information delays due to propagation, data protocols, or problems due to routing and switching, where data can become congested and information can get lost.

Network Design Considerations

Network design is flexible and can be customized, too; whether it’s point-to-point (building-to-building or building-to-data center); a multi-point to multi-point bridge (a multi-point service connecting a group of customer endpoints known as an E-LAN); a multi-point service connecting one or more businesses but preventing one group from communicating directly with another (called an E-Tree); a virtual network providing multiple connections to subscribers called the Ethernet Virtual Private Line (E-VPL); Dedicated Internet Access (DIA); Ethernet Access to the Internet over a privately connected network (IP/MPLS VPN); and Wide Area Network (WAN ) VPLS.  Connections can extend beyond the immediate network to connect facilities to a LAN, WAN, Metropolitan Area Network (MAN), data center, or the cloud. Bandwidth can be dedicated and provisioned to serve single or multiple locations and subscribers at native LAN speeds.  While Carrier Ethernet users have access to circuit speeds of 10Mbps, 100Mbps and 1000Mbps (GbE), transport capacities of 10G, 40G and 100G Ethernet are becoming increasingly common.

Carrier Ethernet is gaining a much broader market foothold as well.  About 50 percent of all companies using Ethernet customer ports today are riding on fiber.  More buildings are coming on-net and greater demand for 10G Ethernet has created more competitive pricing.  Although pricing may vary from location to location, all prices are based on type of service, Ethernet ports required, port speed, contract terms, and the facility’s location.  U.S. customers pay around $1.47 per megabit of broadband service compared to Western Europe, which spends about $.49 cents per megabit.  Some sectors would like to see bandwidth sold as a commodity.  Recently, the U.S. Patent Office approved an application for a Colorado-based telecom company to patent a bandwidth trading tool.  The service platform will permit the company to sell unused blocks of bandwidth in real-time at a decreased rate.

Carrier Ethernet Standards

Carrier Ethernet’s surge in popularity may be the result of several factors including new standards set forth by the IEEE (Institute of Electrical and Electronics Engineers) and MEF (Metro Ethernet Forum); greater demand by cellular providers to meet high-bandwidth requirements for 4G/LTE wireless infrastructure; greater capacity requirements of data-centric, cloud-based applications; and an ongoing demand for greater flexibility and speed when accessing the cloud.

The MEF, a consortium formed to promote the adoption of Metro Ethernet, recently created a committee to look at operations management for multi-carrier networks.  The goal is to create more service diversity, interoperability, standardized contractual arrangements and further clarity regarding national regulatory standards.  In September 2012, the IEEE released an updated Ethernet Standard (IEEE 802.3), which enables higher multi-user throughput in wireless LANs at a data rate up to 7 Gbps.  The new standard is 10 times faster than the previous standard and allows differing Ethernet speeds to be adjusted before transmitting information. The end result is a better multi-user experience.

In 2013, the CloudEthernet Forum was established to address scaling and define the most appropriate ways to meet cloud service demands.  In collaboration with MEF, the CloudEthernet Forum addresses performance and technical challenges associated with VLAN scaling, deliverability, regulatory requirements and cost efficiency across complex virtual networks, data centers, large domains and consolidated storage networks.

While all of these factors have made a positive impact on Carrier Ethernet’s establishment as the industry standard, growth may be an inevitable part of the Internet’s evolution, based on a theory set forth by Moore’s Law.  Created by Intel co-founder Gordon E. Moore and highlighted in a 1965 paper, Moore’s Law makes the observation that every two years, the number of transistors on integrated circuits increases exponentially.  Other factors such as processing speed and memory capacity also double.  Today, it is not uncommon to see demand triple on a daily basis, requiring a technology capable of dynamically multiplying to provide necessary capacity as well as cost-efficiencies.


Carrier Ethernet is gaining broader acceptance across market sectors.  Education, manufacturing, the arts, travel, finance, healthcare, agriculture and government are all seeking the reliability and cost efficiency Carrier Ethernet delivers.  For example, major strides are being taken in the education sector to provide rural schools and universities with high-speed Web access.  Ethernet offers solutions for Education’s growing demand for data and technology, delivering robust, school and campus-wide connectivity to support initiatives such as virtual classrooms for distance learning, campus security systems, SMART Board technology, videos streaming, and more.  Ethernet is also enabling the delivery of high-speed data transport services as well as high-bandwidth applications to carrier, enterprise and government customers in underserved areas.  Traditionally supported by local cable and telephone companies, these critical connections to data centers and major touch points across the globe will now be facilitated via Ethernet.

Other factors such as availability and low latency for streaming audio and video, secure access to off-site data storage and retrieval, disaster recovery, business continuity, VoIP, and flexible access to virtualized service offerings such as Software-as-a-Service (SaaS), Platform-as-a-Service (PaaS), and Infrastructure-as-a-Service (IaaS) applications also position Carrier Ethernet in the forefront as the best delivery choice.

What sets Carrier Ethernet apart from other platforms, however, is its fiber core.  Multiple services can be delivered simultaneously with 99.999 percent reliability and improved uptime due to its redundant architecture, which can reroute traffic in the event of a network failure.

As Carrier Ethernet continues to improve as the standard for high-bandwidth solutions, it is further differentiating itself from legacy solutions.  Offering seamless, integrated Ethernet WAN connectivity between LANs, fast throughput and multi-user access to public, private and hybrid cloud solutions, Carrier Ethernet continues to set the stage for greater adoption.  In the meantime, the medium is well positioned as the best Layer 2 transport mechanism for 4G/LTE Ethernet Backhaul moving forward.  Its cost efficiency and scalability while handling IP Packets on the network makes it the number one choice for cellular providers seeking the best solution for 4G/LTE deployment.

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This article was originally published in Connect-World North America 2014.  You can read the entire edition at the Connect-World website.