Hatteras Networks, a maker of carrier Ethernet service provisioning equipment, has been awarded a multimillion dollar contract by XO Communications to be the exclusive supplier of “mid-band” Ethernet gear to the competitive local exchange carrier.

MBE is copper-based sub-10Mbps increments of Ethernet, such as 2M, 4M and 8Mbps. It is intended to offer Ethernet over copper at the same per megabit pricing as DSL.

Hatteras will supply XO with its HN4000 and HN400 platforms to be deployed in 60 metropolitan markets. XO plans to use the equipment to enable businesses at copper-fed locations to utilize Ethernet services previously only available at buildings connected by fiber.

Currently, only about 15% of businesses in the United States have access to fiber.

Copper-fed businesses have historically deployed T-1s and E-1s as their conduits for voice and data services. The Hatteras equipment will allow service providers to offer up to 45Mbps MBE services over existing copper facilities, and enable businesses to migrate from legacy frame relay, ATM and T-1/E-1 connections to Ethernet for voice and data business connectivity, infrastructure backhaul and mobile wireless backhaul applications.

Forty-five megabits-per-second can be achieved by bonding multiple plain old telephone system-grade copper pairs into a single Ethernet link, Hatteras says.

XO customer CTS Strategic Investments in Chicago is saving more than 50% per megabit by using 10Mbps Ethernet over copper instead of six T-1s to achieve similar throughput for trades and quotes, says Patrick Buck, the company’s CFO.

“We’re streaming in a variety of different quotes coming from all of the exchanges,” he says, explaining the need for the upgrade from T-1. “We also have nightly updates that have to be pushed into our servers from our data providers.”

A 45Mbps T-3 link would have been too much bandwidth at too much cost, Buck says. He says CTS pays $1,400 per month for the 10Mbps Ethernet link from XO, while a single T-1 costs CTS $500 per month.

Hatteras says it has installed equipment in five continents. It landed its first RBOC deal with BellSouth last summer, before AT&T acquired the carrier early this year.

XO currently offers Ethernet in 10M, 100M, 1G and 10Gbps increments over fiber and broadband wireless for connecting sites within and between metro areas, and for high-speed Internet access.