Hatteras Networks – Web Site Update Project (“Solutions”)

“Solution” Content At-A-Glance (Partial “Site Map”)

Carriers & Service Providers

·  Overview of MECA in the Local Loop

o  Filling the T1/E1/DSL-DS3 Service Gap

o  Creating New Multi-Service Opportunities

o  Minimizing Technical and Financial Risks

o  Winning New (and Past) Customers

·  MECA Applications [Link Only to Customer Section ???]

·  Network Planners

o  Leveraging the Copper Infrastructure

o  Switching to Ethernet Switching

o  Reaching Out to All Customers in the CSA

o  Ease of Deployment and Expansion

o  Ease of Management

o  Getting Started

·  MECA Benefits for the Carrier

o  Deliver Ethernet Today Throughout the CSA

o  Postpone or Avoid Pulling Fiber

o  Take Full Advantage of Ethernet Simplicity

o  Improve Customer Satisfaction

o  Maximize Profits by Lowering CapEx and OpEx

o  Pay-as-You-Grow with Full Investment Protection

Business Customers and Institutions

·  Introducing Metro Ethernet Copper Access

·  MECA Applications

o  Private Line Ethernet Service

o  Private LAN Ethernet Service

o  High-speed Internet Access Service

o  Multi-Tenant/Multi-Dwelling Unit (MTU/MDU) Networks

·  MECA Benefits for the Enterprise

o  Maintain a Pure Ethernet Environment

o  Extend the LAN into the MAN… and Beyond

o  Get Broadband Bandwidth in the T1/E1-DS3 Gap

o  Eliminate the Headaches of Point-to-Point Wireless

o  Add Bandwidth on Demand

MECA Technology

·  Advances On the Road to MECA

o  IEEE 802.3ah Ethernet

§  Better Bonding with 2BASE-TL

§  Carrier-class Rate & Reach

o  The Virtues of Virtual Services

o  Robust Quality of Service

o  Full OAM Integration

·  Advantages of MECA

o  Complies with Industry Standards

o  Overcomes Digital Subscriber Line Limitations

o  Achieves Operational Simplicity Based on Pure Ethernet

o  Provides a True Carrier-Class Solution

·  Industry Standards and Organizations

Notes Regarding this Revision (04/03/12):

·  The content here is intended for the “Solutions” portion of the Web site.

·  The outline on the previous page shows the content’s structure At-A-Glance.

·  The three main sections and all nine (or ten) subsections are shown in BOLD BLUE titles here. Individual topics are shown using BLUE (sub)titles. All notes are in RED text.

·  The content of all nine sub-sections is suitable for use in long pages; alternatively each topic could be treated as a link (with the possible addition of some introductory text).

·  There are ample opportunities for cross-links that are not specified in this draft; the nature and extent of those will need to involve some discussion and coordination.

·  Existing content (from both the current Web site and published white papers) was leveraged to the maximum extent possible.

·  Entirely new content is identified as such because this will warrant more careful review.

·  The nature of Web sites necessitates some duplication of related content. Conversely, it may be desirable to repeat certain key points even more. Hopefully a good balance of partitioning and repeating was achieved here.

·  Nevertheless, there may be too much material. If so, suggestions will be welcomed on how to better consolidate/eliminate some content.

·  Product model numbers were not used to keep the discussion “generic” (for a longer “shelf life”); these could easily be added if desired.

·  No diagrams are suggested at this stage, although some will clearly be needed.

Carriers & Service Providers [Section]

[NOTE: The existing content in this entire section was modified as needed to reference MECA (vs. ACE), to eliminate the inclusion of fiber optics in the solution, and to address all xLECs, PTTs, IOCs, IXCs, etc.]

The last-mile of a carrier’s network presents both opportunity and challenge. By enabling carriers to fully leverage the existing copper infrastructure to deliver enhanced services alongside traditional services while reducing operating expenses, Hatteras Networks’ solutions address a key pain point within the carrier network. With Hatteras Networks solutions installed, carriers can increase the market opportunity for high-speed Ethernet services to business and institutional customers by ten fold based on the current penetration of fiber optics—an attractive value proposition in any market environment.

Carriers need a carrier-grade solution for delivering Ethernet to 100% of their business customer base, but until today, such a solution simply did not exist. Metro Ethernet Copper Access (MECA) enables carriers to take Ethernet the Extra Mile™ by delivering carrier-grade Ethernet services at broadband data rates via the voice-grade copper infrastructures at traditional customer serving area distances. Put simply, MECA enables carriers to mass market large-scale Ethernet-based services without leaving a single business customer behind.

Metro Ethernet Copper Access from Hatteras Networks…

·  Does not require a network evolution for applicability

·  Provides simplicity, ubiquity and familiarity of connectivity

·  Delivers flexibility in scaling bandwidth up and down on an as-needed basis

·  Provides more efficient network utilization

·  Enables carriers to deliver multiple services over a single connection

·  Enhances these services with QoS and SLA provisions

·  Minimizes capital costs, especially in comparison to SONET or ATM

·  Lowers operational costs in provisioning bandwidth to customers

·  Aligns seamlessly with the growing set of enterprise data applications

·  Brings carrier class OAM functionality to the Ethernet access network

Overview of MECA in the Local Loop [Sub-section]

Metro Ethernet Copper Access (MECA) enables carriers to do something never before possible: Deliver carrier-grade Ethernet services over the copper local loop infrastructure at traditional customer serving area (CSA) distances of 12,000 feet—and beyond. By delivering Ethernet-based services over ordinary voice-grade copper wiring, Hatteras Networks enables carriers to increase their potential customer base for high-capacity, high-margin data services without requiring a forklift upgrade to the network infrastructure or losing existing T1/E1 and TDM service business to a competitor.

From a carrier perspective, whether an ILEC/RBOC, PTT, CLEC, IXC, IOC or ISP, Hatteras Networks’ purpose-built last-mile MECA solution enables the delivery of high-speed access to nearly all businesses via the existing local loop infrastructure, thus avoiding the cost or delays associated with trenching and new construction to install fiber optics. By broadly deploying Ethernet across the entire access network, carriers can offer new services, reduce both capital and operating expenditures, and achieve a higher, faster return on the investment.

With Hatteras’ equipment installed, carriers are able to layer multiple services over a single connection, which eliminates the complexity and cost of deploying new circuits for each new service. This feature, combined with an overall reduction in the number of network elements, dynamic provisioning capabilities, a smaller footprint, fewer truck rolls for service activation, as well as other management and service enhancements, together reduce the overall operational cost per subscriber of delivering services by 40 to 80% over competing copper solutions, and 50-95% over fiber-based systems.

From a business or institutional customer’s perspective, an Ethernet service is much simpler to manage, particularly since Ethernet is already the technology of choice within the enterprise. MECA also provides customers greater flexibility, enabling Ethernet subscribers to get only the bandwidth they need—nothing more, but also nothing less—and to increase this bandwidth virtually on-demand. Business customers also benefit from the higher broadband speeds carriers can now provision based on better Ethernet bonding techniques. And because the carrier is able to layer multiple services on a single connection, the customer no longer has to incur a service delay associated with truck rolls, service installation and turn up.

Filling the T1/E1/DSL-DS3 Service Gap [Title change] [Includes an edited version of the existing “Balancing Traditional (T1/E1) Services with Ethernet” content]

The typical enterprise local area network (LAN) utilizes a Gigabit Ethernet backbone running at 1000 Mbps with clients and servers connected via Ethernet at speeds of 100 Mbps or greater. Yet most businesses and institutions can only purchase T1/E1 or xDSL access in the metropolitan area network (MAN) at speeds of 1.5-2 Mbps or less—about 1/1000TH the speed of the LAN backbone.

Given current capital constraints, carriers will not be able to solve this problem by deploying fiber-to-the-building as a means of giving subscribers greater access. What carriers need instead is a carrier-grade solution for delivering Ethernet to 100% of their business customers in the CSA—and they need it now! Put simply: By leveraging the copper infrastructure to its fullest extent, Metro Ethernet Copper Access enables carriers to mass-market Ethernet-based services to every customer—and potential customer—leaving none behind.

A related challenge often sited by carriers today is how to protect profitable T1/E1 revenues while responding to demand for Ethernet services. With such a solid market for these TDM-based services, some carriers are reluctant to deploy a technology that risks cannibalizing this substantial revenue opportunity. Carriers are painfully aware, however, that voice revenues continue to remain relatively flat, while data traffic continues to experience tremendous growth. The simple truth is: customers are willing to pay as much and more for Ethernet access, whether delivered wholesale or retail from an ILEC/PTT, a CLEC, an IXC, an ISP or whomever. And because MECA is Ethernet, carriers are generally free to tariff the service at any rate required. So the real risk involves losing business (or not being able to win it back) from a competitor.

Unlike most equipment vendors, Hatteras understands that this is a critical business issue for all carriers. MECA enables any xLEC/PTT, IXC or ISP to profitably manage the migration of subscribers from TDM-based services to higher-speed Ethernet services. MECA also provides a solid solution for “second wave” demand from copper-connected customers—a “build it and they will come” opportunity which Hatteras Networks is uniquely positioned to address.

Creating New Multi-Service Opportunities [Title change to incorporate “Multi-service”]

By deploying a Metro Ethernet Copper Access solution from Hatteras Network, carriers can increase the potential customer serving area for high-speed Ethernet access from 10% (based on the typical current penetration of fiber optics) to 100%—a ten-fold improvement. With MECA, carriers can better serve their existing customers—and attract new ones—by delivering bandwidth when and where it’s needed throughout the CSA. Additionally, carriers can deliver (and charge a premium for) multiple services on a single, secure connection, which eliminates the costs of installing and managing separate circuits for each service. These two advantages together lower the overall network complexity, resulting in dramatic reductions to CapEx and OpEx, and completely eliminate the time-to-market delays normally associated with deploying new, sophisticated services—two compelling advantages that ultimately benefit both provider and subscriber alike.

The preferred method for service differentiation with Ethernet is the versatile IEEE 802.1Q Virtual LAN standard. VLANs give carriers a way to map every customers’ traffic onto a common switched Ethernet infrastructure, allowing each customer’s traffic to be securely isolated from all other traffic, while still permitting individual VLANs to be administered under different domains. This capability also allows the carrier to offer the same customer several different services over a single metro-Ethernet connection. In addition to providing traffic segmentation, IEEE 802.1Q-based VLANs can be used to enhance network scaling by logically partitioning a single, flat network into multiple smaller and independent subnetworks.

MECA offers robust support for VLANs, including the ability to add, re-map and stack tags as needed to accommodate multiple subscribers with multiple applications—all from a single switch. Such multi-service capability greatly increases the revenue potential of each and every customer connection. The ability to re-map customer VLAN tags is particularly important within the carrier infrastructure. Indeed, without this means for avoiding cross-customer tag conflicts, mass deployment of Ethernet services would be impractical or impossible. The tremendous flexibility afforded by so-called Q-in-Q VLAN tagging gives the carrier a capable and cost-effective total solution for Ethernet access throughout the metropolitan area.

In addition to using multiple services to increase the revenue opportunity of any connection, MECA allows a carrier to employ Class of Service (CoS) differentiation to increase revenue. With CoS differentiation, a carrier can segregate customer traffic within the same service, or across different services, into multiple traffic classes, and offer each class its own service level agreement (SLA). A typical example of CoS differentiation is an enterprise customer with its own VoIP application. By being able to offer a higher class and quality of service for the VoIP traffic, a provider can increase its revenue stream without deploying any additional equipment.

The new multi-service and multi-QoS/SLA flexibility, combined with versatile VLAN tag handling, can give any carrier new opportunities for increased revenue without any additional infrastructure costs, and yields more efficient use of existing network resources.

Minimizing Technical and Financial Risks [Title change] [The content here is new]

Very few technologies have endured as long as Ethernet. With a proven track record that spans more than three decades, Ethernet is as dependable as it is affordable. But carriers are well aware that Ethernet in the metropolitan area is relatively new, and that Ethernet over voice-grade local loop copper wiring represents a state-of-the-art advance.

Hatteras Networks understands these concerns and has designed the Metro Ethernet Copper Access solution to minimize both the technical and financial risks associated with this profitable business opportunity. The technical risks are reduced by strict adherence to industry standards, a rugged “carrier-class” product design and robust management capabilities.

The financial risks are effectively eliminated by allowing for success-based deployments, which permit a pay-as-you-grow approach to rolling-out and scaling metro-Ethernet services. With success-based deployments, there is no need for an investment until the customer signs the service agreement. Then a pair of identical and low-cost “bookend” units is deployed: one at the customer premises, and one in the central office or remote terminal. A truck roll is not necessary, but may be desired—and is certainly cost-justifiable given the premium price associated with the service. The high margins result in a payback on the CapEx in less than three months, and the low OpEx continues to yield a high return on investment.

As more subscribers sign up, the carrier can begin to take advantage of the economies of scale afforded by a multi-port chassis-based MECA platform. A single, stackable Switching and Aggregation Platform [???] is capable of supporting up to __ [???] Ethernet links with different customers throughout the CSA. The MECA customer premises equipment (CPE) remains the same, so the switch (pun intended) has absolutely no impact on any customers. Multiple chassis can be stacked and managed as a single system, which helps keeps OpEx at a minimum. And full investment protection is afforded with the ability to redeploy the single-port units from the carrier’s facilities to any new customer’s premises.