XO Communications will use Hatteras Networks’ Ethernet gear to dramatically expand the reach of its Ethernet service into buildings it can’t reach on fiber, the two companies announced today.

XO will use Hatteras’ HN 400 and HN 4000 gear in 60 metropolitan markets to deliver mid-band Ethernet service at 5 Mb/s and 10 Mb/s to a much broader range of customers, using leased copper lines instead of having to invest in deploying fiber optic cable to a building.

“When we launched Ethernet services in 2000, we were one of the first for a communications provider, but we were always limited to a narrow footprint via on-net buildings,” said Garrett Hess, senior product manager, XO. “The Hatteras gear enables us to use copper pairs, which will greatly increase XO’s reach. We’ve already started selling this and are having much success with it. Our sales force is as excited as they ever been over a new service.”

The addition of copper-based service to the Ethernet standard in 2004 encouraged XO to explore that option and the company had gear from multiple equipment vendors in its labs before choosing Hatteras, Hess said. “From an engineering standpoint, this works the best for us,” he said.

By offering a 10 Mb/s Ethernet service over copper wires, XO can address the growing market among small to mid-sized businesses that have outgrown T-1 service but can’t afford a 45 Mb/s DS-3 service, Hess said.

“For us, it is our traditional 10-Meg service, with the same quality of service we deliver to on-net buildings,” he said. “We can provide the same consistent service, across carriers. In today’s market, no Ethernet is really created equal. Getting a 10-Meg service from a local exchange carrier is harder than just getting the copper. This allows us to be synonymous across carriers.”

“This is all about Layer 2 service transparency,” said Gary Bolton, vice president of marketing and product line management for Hatteras. “Only about 10 percent of buildings are on fiber optic networks--with this equipment, XO can reach the other 90%. Plus, as more services move to IP, like IP-VPNs and VoIP, it makes more sense to offer services over Ethernet.”

XO will sell the service to both its commercial and wholesale customers, Hess added. “We think this makes us much more competitive,” he said.

From Hatteras’ standpoint, XO is a significant customer because of the company’s national reach, Bolton said.

At the COMPTEL show in San Diego this week, Hatteras will also be exhibiting the capacity to deliver 200 Mb/s of Ethernet over copper using the HNS 4000 to terminate 40 twisted pair with 5.7 Mb/s per pair.

“The reason we are demonstrating this--we are the only ones to demonstrate this much capacity--we are doing it to help people understand it is not about bandwidth, it’s about service transparency,” Bolton said. “Before you deploy, you don’t know what the impairments are on a loop. The way you get enough bandwidth for your service offering is that you add pairs. We can, over our solution, offer disparate over different pairs, depending on quality of that pair.”

A service provider has the option of bonding up to 200 pairs and delivering 1.25 Gb/s, “but the sweet spot is up to 20 Mb/s,” he said.