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1. Tech people where I work say Ethernet does not replace T1 boxes, but are small devices "clipped" onto wires after they leave the T1. The Ethernet devices (as it becomes a a standard) make the transmissions compatible between the various connected end user equipment. It is also, like you said, a more reliable standard, efficient, and makes the transmission less costly. (I think I got all this right.)

Thats only partially true. As the world moves towards packet based technologies for voice (VoIP etc.) the TDM cicuit model (T1, T3 etc.) becomes redundant and the carrier networks may be built using packet based technologies. Of the packet transport protocols Ethernet (with TCP/IP on top of it) is the most likely to be deployed because of its ubiquity and low cost.

I no longer work for a system vendor so I cannot give the most up to date view of the market but I can tell you what the problems were last summer for the deployment of Ethernet based carrier networks.

The major problems are not technical. Technically a carrier could (and some have) deployed ethernet as a technology anywhere in their network today without a problem. The problems are organizational and financial (for techies: i.e. at layers 8 and 9 on the OSI stack :-) ).

The first problem is that the carrier has a significant investment in TDM equipment which it needs to get value out of before it throws away. Since the Ethernet network doesn't need much of this TDM stuff it cannot be deployed to replace the TDM network until sufficient return has been made on the TDM network. Given the current economic climate there is no way to financially justify the roll out of an Ethernet network in addition to the TDM network or (basically) to expand into new markets. Secondly there is the problem of billing and service levels. Although the proposed Ethernet network does map fairly well onto the Frame-relay service and billing models there are enough wrinkles that mean that it cannot be a straigh copy and defining all the variations seems to be beyond the capabilities of the carriers at present.

Finally there is one technical issue. That is the question of the demarcation point and devices. In a TDM world the demarc is well understood and features such as loopback and circuit test are standard concepts. In the Ethernet world there is no agreement on where the demarc should be and what equivalents to loopback/test should be. Thus any carrier that deploys an Ethernet service has to decide what to do with the demarc and thus what the CLE device should be. Depending on his choice of CLE different possibilities for loopback, test etc. are available.

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