XO Communications continues to fill out the data service portfolio on its national network, today announcing IP virtual private networks based on multi-protocol label switching (MPLS), targeting mid-sized businesses with between five and 20 locations. And the company says it’s providing an IP-VPN service that is price competitive with and more flexible than current offerings.

By moving its VPN service to Layer 3 of the network, XO will enable its customers to combine services onto a single network pipe and give each service its required Class of Service, said Don Toomey, senior product manager at XO.

“It’s the need to bypass toll charges that drives VoIP, which drives the need to hand applications better which drives Layer 3 IP-VPN,” he said. “With this service, a business can link multiple sites with all of its voice and data and avoid paying any toll charges.”

Because everything is encapsulated in IP, businesses also can use multiple types of access, including T-1, OC-N, DS-3 and even bonded copper loops for locations that don’t have fiber access, Toomey said. XO deploys Hatteras Networks Ethernet-over-copper gear and ANDA Networks DS-1 and DS-3 equipment.

XO believes it has a couple of advantages over other IP-VPN providers, including its network reach into 75 major markets nationally and its ability to provide lower-cost access to the service.

“With most providers, the customer will have to purchase a fractional DS-3 or full DS-3 at that HQ location,” Toomey said. “If they are in our footprint, we can offer them Ethernet over copper or Ethernet over serial and can give them the price for 10 Meg connection, including the loop and port for the loop of a DS-3, that’s cheaper than a DS-3. They don’t have to pay for a full DS-3 to get the 10 Meg connection that they need.”

By June, XO will have integrated its XOptions Flex business VoIP service with the IP-VPN offering, he added.
XO is offering four classes of service (CoS), each with a service level agreement. They include real-time CoS for latency-sensitive applications such as VoIP; critical CoS for apps such as video that need guarantees on delay and jitter; priority CoS for data apps that aren’t latency-sensitive but need to take precedence for strategic reasons and standard CoS for routine Web browsing and e-mail traffic.

XO is taking what Toomey says is a different approach to CoS by offering a flat-rate price for access to all four classes and not charging by class.

“We are charging a nominal fee for class of service, but it’s a flat rate,” he said. “And we are leaving our Class of Service scheme wide open, and limiting bandwidth in any class. This is the result of us having an offering that is more current day versus some of the ones more aged and based on ATM. We have an arrangement that appeals to a lot of customers today.”

While XO wants to charge a premium for an advanced data service, its goal, Toomey said, “is to be a total managed service provider. Our goal is to get these networks and be able to charge a total managed service to customers.”