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to an existing IP/MPLS network and enables carriers to add new revenue streams from Ethernet services Although some customers are willing to buy Layer 3 services, others prefer to buy Layer 2 services often because they prefer to manage and maintain their own routing infrastructure Offering Ethernet services at Layer 2, therefore, enables a service provider to sell to new groups of customers Opponents of MPLS often portray it as a complex technology to operate In fact, MPLS has a range of advanced troubleshooting tools some inherited from IP (such as ping and tracereoute), some enhanced from their IP equivalents (such as LSP ping/traceroute), and some new (for example VCCV) The control plane, which again is often seen as complex, is the most effective way to ensure that all nodes in the network have the same view of network status EoMPLS is also a good mechanism for separating customer and provider domains because separate service instances are configured per customer and knowledge of a service instance is constrained to the PE nodes that have local ports that are members of that instance Ethernet-based approaches to providing Carrier Ethernet have, in fact, copied many of their ideas from EoMPLS (for example, 8021ah Provider Backbone Bridging uses MAC in MAC to separate the customer and provider MAC address spaces resulting in an encapsulation rather similar to that of Ethernet over MPLS over Ethernet)

Utilizing Ethernet in the access and beyond is also appealing to Service Providers primarily because it simplifies their infrastructure, reduces costs, and most importantly, offers a new source of potential revenues Ethernet can be offered on a variety of infrastructures, and delivering over one infrastructure versus the others means the cost structure also varies (since some infrastructures are more optimized than others) and impacts profitability That enterprises are also demanding Ethernet for the reasons discussed previously further reinforces this appeal The key benefits of Ethernet to Service Providers are summarized next Since more granular services are delivered using Ethernet, there is an opportunity to derive more revenues than with TDM services; for instance, if a customer has subscribed to a T-1 circuit, then if additional bandwidth, say 5M is required, the usual option is a T-3/DS-3 circuit, a 28 times increase in bandwidth at probably 15 times the price of a T-1, with over 80 percent wasted This rather undesirable option may actually lead to the customer putting off purchasing the DS-3 until much later and consequently deferring Service Provider revenues With a 5M offering over Ethernet, of course, revenues can be immediately realized Frequently, however, the market pricing is such that a customer will likely just purchase a 10 Mbps Ethernet circuit from the Service Provider for a nominally higher price (but still decidedly less than the price of a DS-3) Such a scenario is a win-win solution for both the Service Provider48 and the customer Almost all major Service Providers in the US and elsewhere are providing granular Ethernet bandwidth in increments of 1M

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Earnings commitment: For income producers, the company commits to the commission percentage For sales representatives, the company is making a commitment to the target earnings opportunity Funding: Funding for income producers commissions comes from revenue production For sales representatives, incentive compensation is cross-funded by the plan participants For sales representatives, the target pay is reallocated among the participants with better performers making more than the target incentive pay for the job and less effective performers making less than the target incentive pay

Higher Revenue Potential Through More Granular Bandwidth Offering Delivering Multiple Services over a Single Interface Using a single Ethernet interface, a Service Provider can offer a vast array of Ethernet-based services (such as Internet access, LAN extension, Transparent LAN) for low marginal costs Employing Virtual LAN tagging, for instance, and with a bandwidth and performance profile, each of these services can be delivered on the same physical interface With VoIP, voice applications, and the potential developments in the area of circuit emulation (see 3) of other TDM services, almost all current services can be offered over an Ethernet interface This scenario, which is not plausible with traditional TDM services, enables a Service Provider to leverage a single physical interface and derive the maximum revenue from that interface; more importantly, it positions a Service Provider to be able to deliver all

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Even though revenue per bit has possibly decreased, this could mean additional revenue from the customer

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