WARSAW, Poland -- The Future of Carrier Ethernet: Eastern Europe 2007 -- Carriers looking into the potential of PBT (Provider Backbone Transport) are uncovering hidden costs related to the management of the emerging Carrier Ethernet technology, according to one of the speakers at Tuesday's Ethernet Expo event here in Poland. (See Ethernet Hits Warsaw and PBT: New Kid on the Metro Block.)

When asked about the relative costs of like-for-like MPLS and PBT metro network deployments, Phil Tilley, VP of marketing for the IP division of Alcatel-Lucent (NYSE: ALU)'s Carrier Business Group, said "all the talk about PBT is hypothetical because no one knows how much it will cost to deploy once the control plane and management costs are added. The costs will start rising."

The issue is relevant because PBT's supporters claim there are many cost advantages to deploying PBT over MPLS for point-to-point data traffic transport in metro networks -- and those claims have attracted a lot of carrier interest. (See MPLS: Metro a No-Go?)

That argument, though, has always been around the cost of deploying PBT-enabled Ethernet switches against MPLS routers, and hasn't factored in the necessity for third party network and service management capabilities and the associated operational costs. (See Vendors Clash Over PBT, Aria Tunes Into PBT , Nortel Preps New PBT Switch, and Avici Amped Up for Soapstone Launch.)

"On paper the boxes are cheaper, but in an end-to-end solution we just don't know the cost," said the AlcaLu man -- whose company, while claiming to be technology agnostic, is experiencing significant success and market traction with its MPLS-based routers and is among PBT's main critics. (See AlcaLu: PBT Is Peripheral and AlcaLu Expands Alwan's Role.)

"Some carriers have looked at the cost with management and are rethinking the whole thing," added Tilley, without identifying any operators.

So far, the only major carrier known to be deploying PBT in a live network is BT Group plc (NYSE: BT; London: BTA), one of the technology's main flag bearers. (See BT Goes Live With PBT, BT Pressures Vendors Over PBT, BT Likes Nortel's New Ethernet Flavor, and PBT Means What?)

According to industry sources, BT has encountered some PBT service set-up problems in Italy, where it is deploying PBT initially using Nortel Networks Ltd. Ethernet switches. BT is also believed to be finding that the costs associated with PBT deployments are not quite as attractive as first envisaged, though the differences are not so great as to prompt BT to abandon its PBT plans.

BT had not yet responded to Light Reading's questions as this article was published.

Tilley also told the 130-plus carrier and enterprise executive attendees here in Warsaw that it is unrealistic to expect operators to wait for PBT – a pre-standards technology still in the relatively early stages of development – when MPLS is tried and tested as a carrier network technology.

Following a presentation from Extreme Networks Inc. (Nasdaq: EXTR) about the merits of PBT -- including how it has been shown to be interoperable with MPLS and how multicast capabilities are currently being developed for PBT -- Tilley stated: "We have heard about interoperability demonstrations and about future developments. Now let's look at some existing business and real network deployments."

The AlcaLu man added: "I'm not sure we can wait" for PBT multicast capabilities to be developed. "It is needed now, and obviously MPLS is already doing this now."

Despite PBT's disadvantages as a largely unproven technology, the perceived simplicity and claimed cost benefits over MPLS (regarded by many as an expensive and overly complex technology to deploy) have attracted more than just BT. Among the other carriers known to evaluating PBT in one way or another are Deutsche Telekom AG (NYSE: DT), BCE Inc. (Bell Canada) (NYSE/Toronto: BCE), and Verizon Communications Inc. (NYSE: VZ), and Nortel has claimed a number of smaller contract awards. (See Deutsche Telekom Flirts With PBT, Nortel Wins in Colombia, and Nortel Lands More PBT Action.)

Is that having an impact on carrier expectations of MPLS? Will MPLS router vendors lower their prices and reduce their notoriously high margins as a result of competitive pressures from the Ethernet switch vendors such as Nortel, Extreme, and Nokia Networks ?

"Let's look at the real costs of running end-to-end PBT networks first before we start kicking the vendors," Tilley said.

— Ray Le Maistre, International News Editor, Light Reading