In plunging into pseudowires with its "Private IP – Layer 2" service launched this week, Verizon Enterprise Solutions didn't offer much surprise in its choice of vendors.

Officials of the company formerly known as MCI say they're running pseudowires entirely on gear from Cisco Systems Inc. (Nasdaq: CSCO), the company that provided the carrier's IP setup. That could be a disappointment to fans of Hammerhead Systems Inc. , as reports in the spring said the startup had gotten its gear qualified at the carrier. (See Has Hammerhead Nailed Verizon?)

Hammerhead hasn't been shut out entirely, though. "We have definitely spoken to them in conjunction with their Ethernet capabilities and are aware of their Layer 2 capabilities, says Michael Marcellin, executive director of IP and Ethernet networking at Verizon Business.

Hammerhead officials wouldn't comment (and, to be fair, never confirmed they're working with Verizon Business). It's true that Hammerhead is planning to add support for virtual private LAN services (VPLS), VP of marketing Rob Keil says, so maybe the startup has a chance with Verizon Business on that front. Verizon Business says it plans to launch VPLS in the first quarter of 2007. (See AT&T, Verizon Expand on Ethernet.)

For Verizon Business, pseudowires present a Layer 2 complement to the private IP services already offered. While VPLS would target Ethernet customers, pseudowires let customers continue using ATM and Frame Relay services, while moving all that traffic onto the carrier's MPLS network, Marcellin says. (See Verizon Taps Layer 2.)

What's important is that pseudowires -- which Verizon Business is calling virtual private wire services -- and VPLS are both Layer 2 services, meaning they don't include IP routing. Some customers don't want to hand over their routing tables to a carrier. (See Pseudowires.)

Analyst David Hold of Current Analysis says Private IP – Layer 2 might have been rushed a bit, covering the gap when Verizon Business's VPLS service, originally slated for year's end, got delayed into 2007. "It's kind of like they wanted to get something out even though the pieces aren't all there," he says. "Customers running with a Frame Relay or ATM core are going to wait for all these pieces."

Among those are support for Ethernet and quality of service for ATM, both of which are coming, Marcellin says.

Verizon Business has been aggressive in moving customers to IP and MPLS, but it hasn't announced any plans to cap or close down its Frame Relay and ATM networks, because it doesn't want to upset certain longtime customers. "Government customers will typically sign five- to 10-year deals, and with budgets and maybe reluctance to move to new technologies, that vertical may be slower to move than others," Marcellin says.

Pseudowires have remained a hot enough topic to bring in more cash for some of the startups involved -- Hammerhead raised $30 million early this year, and Mangrove Systems Inc. picked up $13 million this summer. (See Hammerhead Raises $30M and Mangrove Secures New Funding.)

Other pseudowire competitors include Axerra Networks Inc. , Corrigent Systems Inc. , Overture Networks Inc. , RAD Data Communications Ltd. , and Telco Systems (BATM) .

Some of the interest comes not from services like Verizon Business's, but from the prospect of using pseudowires in wireless backhaul networks. (See Wireless May Boost Pseudowire.)

— Craig Matsumoto, Senior Editor, Light Reading