Charter Gets Into Business for the Long Haul

Charter enters a relatively new service category for cable as it lights up a long-haul Ethernet service tailored for businesses

Jeff Baumgartner, Senior Editor

June 23, 2011

2 Min Read
Charter Gets Into Business for the Long Haul

Charter Communications Inc. is launching a long-haul Ethernet service on Thursday, knitting together its individual markets in an attempt to cut deeper into Level 3 Communications Inc. (NYSE: LVLT)'s and AT&T Inc. (NYSE: T)'s hides.

Charter got into the metro Ethernet market about ten years ago. The difference now is that it's going to exploit its national fiber backbone (based primarily on Cisco Systems Inc. (Nasdaq: CSCO) gear), so business customers can link to branch offices without having to rely on other operators' long-haul connections.

Charter's already been using its backbone for high-speed Internet and video traffic. It's extending that support to include commercial services after inserting a unified Layer 3, MPLS-enabled core, says Scott Fairchild, the product management director for Charter Business.

"With this [product] introduction, we can get to any Charter location," he says.

The long-haul network of a Level 3 dwarfs Charter's, but the MSO believes it can provide an attractive way to connect Tier 2 and 3 markets, saving customers from having to stitch together links from different carriers. It also announced wholesale Ethernet interconnection deals with CENX Inc. and Equinix Inc. (Nasdaq: EQIX) earlier this year.

But it's early. The MSO started working on metro Ethernet long-haul service last fall and has signed a couple of trial customers in the health care industry, including a hospital that operates in St. Louis and Wisconsin. Charter is also getting interest from other metro Ethernet customer segments, including government and education. "It's a big priority for us," Fairchild says.

Why this matters
Business services is rapidly becoming a growth focus for cable, but the industry has been able to get its mitts on just a smidgen of the available loot so far. Heavy Reading estimates that cable took in about $5 billion in business services revenue, just 4 percent of a market that's valued as much as $140 billion.

Charter believes the business services opportunity in its footprint is about $8.5 billion. Its commercial service unit raked in about $137 million in the first quarter, up 17.1 percent more than in the previous year. Long haul service -- a relatively new area for cable -- could help to stoke that growth engine even more while taking some business away from telcos and other backbone operators.

For more
Read more about cable's business services ambitions:

  • Cable's $5B Biz Services Bonanza

  • Ciena, Cisco & Juniper Get Piece of Comcast's MetroE

  • Cable's Newest Billionaire: Cox Business

  • TW Cable Buys Into the Cloud

  • Charter Connects With CENX & Equinix

  • Charter Makes Ethernet Interconnection

  • TWC's Outlook: Cloudy, With a Chance of Ethernet

— Jeff Baumgartner, Site Editor, Light Reading Cable

About the Author(s)

Jeff Baumgartner

Senior Editor, Light Reading

Jeff Baumgartner is a Senior Editor for Light Reading and is responsible for the day-to-day news coverage and analysis of the cable and video sectors. Follow him on X and LinkedIn.

Baumgartner also served as Site Editor for Light Reading Cable from 2007-2013. In between his two stints at Light Reading, he led tech coverage for Multichannel News and was a regular contributor to Broadcasting + Cable. Baumgartner was named to the 2018 class of the Cable TV Pioneers.

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