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Con Ed POPs In on Enterprise Market

Con Edison Communications Inc. (NYSE: ED), a subsidiary of the New York utility, is looking to sneak past the incumbent providers by offering enterprise data and voice services that run on an independent physical network.

Today the metro carrier announced two new enterprise services, PowerNet Internet and PowerCall Voice (see Con Edison Targets NYC). PowerNet Internet Service offers dedicated Internet services at speeds ranging from 1.5 Mbit/s to 1 Gbit/s; and PowerCall Voice Service offers T1 (1.5 Mbit/s) or PRI access, local calling, long-distance calling, and toll-free service.

Con Edison’s new data and voice services are interesting, because they completely bypass the physical RBOC (regional Bell operating company) networks by employing a separate fiber access network that runs through the electric utility's rights-of-way. Although Con Edison has been providing last-mile connections to a number of carrier customers and large enterprise business for several years, this marks the company's first big stab at the so-called "mid-market," for small and large business telecom services.

Analysts say there's still room for independent providers of local services, even during the current telecom recession.

"From what I can tell, the New York market is a good one -- there's plenty of room for BLEC [business local exchange carrier] style plays," says Andrei J. Jezierski, an analyst with i2 Partners LLC. "It sounds good."

Rather than collocating equipment in RBOC central offices, Con Edison connects its own fiber to other carriers at local “telecom hotels,” the massive points of presence (POPs) in New York that connect some of the largest fiber networks in the world. This means it can avoid the regulatory problems -- as well as the physical dependence on RBOC lines -- associated with collocation. Con Ed is actively pitching “network diversity” as one of its selling points. For example, the company says that many Wall Street firms are now using its services to provide redundant physical connections to the local RBOC networks.

Another advantage Con Edison Communications has is its backing of a big name -- Con Ed -- at a time when many competitors in the metropolitan fiber market have fallen by the wayside. For example, one of the largest metro services player, Metromedia Fiber Network Inc.(MFN) (Nasdaq: MFNX), filed for bankruptcy last year (see MFN Falls Into Chapter 11).

"It's a real company and it's well capitalized," says Jezierski.

The company was launched four years ago, just as the fiber bubble was beginning to deflate, but CEO Peter Rust says the company has remained lean and mean and is positioned to break even this year.

”We were lucky we got into the business late,” says Rust. “One of our advantages is speed of provisioning -- we got customers to throw us a bone if we could install a circuit in under two weeks.”

Rust claims that, recently, the local telecom services market has improved with less competition and stabilizing prices. “It's gotten better -- there are fewer people going out of business.”

Con Edison also says it will be looking to deploy voice-over-IP (VOIP) services in the next few years. Currently, its network employs a mixture of traditional voice switching and VOIP gear, but the company is actively testing VOIP gear for future services.

"We've positioned the network in case that's the way it goes," says Rust.

The carrier is determining the final stages of a VOIP gear test in its lab. Among the equipment vendor finalists are General Bandwidth Inc., Nuera Communications Inc., Telica Inc., and Sonus Networks Inc. (Nasdaq: SONS)

— R. Scott Raynovich, US Editor, Light Reading

opticalwatcher 12/5/2012 | 12:25:35 AM
re: Con Ed POPs In on Enterprise Market I wonder why Avaya isnt on the short list for providing this equipment? Anyone have any details? Were they a contender at one point? Thanks in advance.
rtfm 12/5/2012 | 12:25:35 AM
re: Con Ed POPs In on Enterprise Market Does anyone know if ConEd is using (or propose to use) PLC - PowerLine Communications (aka powerline carrier communications)?

They have a big pilot ongoing, using PLC as an access technology.

Thanks,

rtfm
dljvjbsl 12/5/2012 | 12:25:31 AM
re: Con Ed POPs In on Enterprise Market I wonder why Avaya isnt on the short list for providing this equipment?

The same question arises for both Cisoco and Nortel as well.
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