Forbearance, fiber gaps make EFM a must for Allied Telecom.

Fiber optic pipes have been considered the future of telecom for the past 20 years, but a competitive data service provider is finding that access to copper lines has become more important to its Ethernet business.

Allied Telecom, a privately held mid-Atlantic broadband provider, has always pushed the envelope when it comes to speed. After its start as a systems integration company in 1990, Allied became a broadband CLEC in 1996. But unlike the many other data players who rushed to build out national networks — a rush that led to the crash of the competitive market at the turn of the century — Allied remained focused on providing broadband data services in its region, using DSL, G.SHDSL and then bonded copper to deliver up to 9.2 Mb/s back in 2004.

It is now an all-Ethernet service company, having stopped providing TDM services and, just last month, discontinuing symmetrical DSL service. Allied is now pushing the copper envelope using Ethernet in the First Mile (EFM) technology from Hatteras Networks to deliver speeds up to 40 Mb/s to its Baltimore and Washington, D.C., metropolitan area customers over bonded copper pairs. And it is finding those copper links to be more important that ever as regulatory shifts create new market realities.

As a facilities-based carrier, Allied relies on buying last-mile connections from the local incumbent, which is Verizon in its territory. Since Verizon won forbearance from the FCC for the resale of its broadband facilities, access to fiber loops has changed dramatically, said Ken Williams, founder and CEO of Allied Telecom.

“Provisioning for metro Ethernet that is fiber-based has gone from a 45-day window to 90 to 120 days,” he said. “Through this forbearance process, Verizon is writing new contracts, and that adds a 45- to 60-day administrative burden just to get to assigning a contract number. Then we start the provisioning process, which takes 45 days when they have fiber facilities in place. If they have to build out the fiber, obviously, it takes much longer.”

The problem, Williams said, is that customers can't wait. Unlike in 2004, when Allied Telecom first began to offer Ethernet, business customers are now clamoring for the service and the bandwidth it can deliver.

“It became very important to us to leverage the existing copper versus fiber,” he said. “We do use fiber facilities through Verizon and Level 3 and XO Communications. The problem is that where they have to build, it takes a long time and the cost is greater for us. EFM is the perfect technology for us.”

In 2004, when Allied started with Ethernet-over-copper, it was essentially replacing T-1, Williams said. “The differentiator was that we could offer 2 megs — now it's common for people to ask for 10 meg, 20 meg or 30 meg circuits. The difference today is that demand is certainly there.”

Allied also is facing competition from XO in the metro Ethernet space, he said, and the presence of multiple players is a sign of technology maturation. Today's customers are less likely to need extensive education on the advantages of Ethernet or copper-pair bonding.

“Some of our competitors are offering N by T-1 services, so they understand multiple bonded pairs,” Williams said. “We can explain the even greater advantage of EFM over N by T-1 in that you don't need any special hardware on the customer premises end. Ethernet is something that is real simple and plugs directly into an existing firewall or router.”

That speed of deployment advantage is significant in enabling Allied to obtain and keep customers. “We had a very large government contractor who was moving from D.C. to Arlington, Va.,” he said, “and their new building did not have fiber facilities in it. We didn't find that out until much later in the process, however. They were contracted for 50 meg.”

If Allied had had to wait until it could get fiber into the building, the customer could well have gone elsewhere. “We were able to get copper facilities from that location to our nearest [point of presence] to get them around 30 meg,” Williams said. “That will get them through while the fiber build is under way, so they will be on fiber by mid-December, getting the full 50 meg.”

For its larger customers, EFM often represents a way to start receiving service while Allied looks at how to get fiber in the front door. “Customers want bandwidth and they want it now,” he said. “We've used it very competitively to get out of those situations — be the heroes and come save the day.”

Allied's customer base is varied, as it serves small- and medium-sized businesses (SMBs) right up to large enterprises and government agencies.

“The SMBs are looking for 5 to 10 meg; however, we are finding medium to large companies going 10 to 50 megs,” Williams said. “Often they are looking for a backup to an existing DS-3 type of service. They also have increased requirements for data transport to data centers for business continuity and disaster recovery types of applications.”

Allied does find many people still think of fiber first for such connections, Williams said, because of its scalability, bandwidth and reliability.

“Once they get an education, they see that EFM tends to be very reliable, particularly where they are looking for a secondary path because EFM is not dependent on power or special requirements in-building, like Sonet multiplexers are,” he said. “It goes straight to the computer room.”

Typically, the copper and fiber lines into a building share the same conduit, at least between the junction box at a manhole cover and the building, but Allied can use a microwave connection to a nearby POP or another connected building to provide customers with a physically diverse path, Williams said.

The cost advantages of going all-Ethernet also are not lost on Allied.

“Ethernet is clearly a big money-maker for us,” Williams said. “We are consolidating everything with EFM. Our costs go down dramatically because in terms of training technicians, turnover, and a lot of our provisioning and management and network monitoring take place at a centralized point. The skill level of technicians deploying equipment in the field is not as specialized. It doesn't require a lot of extra test equipment or diagnostics.”

Allied chose Hatteras gear because it packed a lot of power into a small package, providing switching and aggregation in a box one rack unit high. That enables Allied to put a lot of capacity into its co-location sites, Williams said.

Gary Bolton, vice president of marketing and product line management for Hatteras, sees Allied as on the leading edge of Ethernet providers. “The sub-10 megabit is the fastest growing segment of the market,” Bolton said. “Allied wanted to have the full Layer 2 service set, the same level of [service level agreements] that you can over fiber.”

The future lies in connecting all services over secure WANs that can link multiple locations, Williams said.