Verizon Business Delivers Layer 2 Option for MPLS-based Private IP

Verizon Business has come out with a Layer 2 version of its Private IP, MPLS-based VPN service. Unlike the company’s popular Layer 3 Private IP service, which it came out with three years ago, the new Layer 2 service allows customers to manage their own routing rather than sharing routing information with the service provider.

The Layer 2 service is based on Virtual Private Wire Service (VPWS) standards and employs pseudwires over an MPLS backbone to support common protocols such as frame relay, ATM and Ethernet. The service supports frame relay, ATM, PPP and HDLC encapsulation today; Ethernet encapsulation, as well as QoS support for Ethernet and ATM, and a VPLS version of the service are planned for early 2007. The service is immediately available in the United States and is scheduled to be available in the second half of next year in the 116 countries where Verizon Business currently offers private IP. In the second quarter of next year the carrier plans to begin delivering WAN analysis reporting for the new service in partnership with Computer Associates.

Michael Marcellin, executive director of IP and Ethernet networking, and Danellie Young, director of MPLS services at Verizon Business, said the new service is targeted at businesses that are ready to make the transition from ATM or frame relay to an IP service but still want to maintain the control that a Layer 2 service allows. Customers of this new service will have access to configuration reports, traffic statistics and network performance reports via the Verizon Business Customer Center.

“Verizon Business is hitting an important sweet spot in the marketplace, where many enterprise customers remain heavily implanted in Layer 2 networking,” said Courtney Monroe, vice president at IDC, in a statement provided by Verizon Business. “As the first major carrier out of the gate to offer a compelling Layer 2 MPLS service offering, Verizon Business is building on its success delivering private IP MPLS VPNs with another next-generation network option for their customers’ existing frame relay and ATM networks.”

In the past 18 months a lot of customers have migrated to Verizon Business’ Layer 3 service, but some customers weren’t ready to make the leap until a Layer 2 option was available, Marcellin said, adding Layer 2 will serve as “a nice stair step” for ATM and frame relay customers who want to migrate to Layer 3 over time, but need an intermediate solution. That, and the fact that the federal government’s General Services Administration has Layer 2 MPLS requirements, were the key drivers for Verizon Business coming out with this private IP service at this time, he said.

However, Marcellin and Young added that while several carriers have talked about “end of lifeing” their ATM and frame relay services, Verizon Business has made no such claim and doesn’t plan on making such a claim in the foreseeable future. But Marcellin added the Layer 3 offer is the company’s fastest growing service from a revenue perspective and by late 2007 the company’s private IP services should take over its frame relay service “so it’s become a very sizable product for us.” While Young said the company is not pushing one product over the other, Marcellin said Verizon Business has been proactive in working with customers in discussing their long-term networking paths.

Customers of the Verizon Business Layer 2 service will pay for access, based on bandwidth, and private IP-Layer 2 ports, also based on bandwidth. Marcellin said the pricing of the Layer 2 service is comparable to pricing for the company’s Layer 3 option, with a T1 port selling for about $575. While he wouldn’t make specific pricing comparisons between the private IP offers and the company’s frame relay service, Marcellin said if a customer network were purely hub-and-spoke with no meshing, frame relay would be comparable to the MPLS option, but when customers have to pay for frame relay permanent virtual circuits, the MPLS option becomes more attractive from a cost standpoint.

Verizon Business www.verizonbusiness.com

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