Companies have used DSL as a low-cost, (usually) high-speed way of connecting remote locations to the headquarters or Internet. A new service from New Edge Networks adds a unique - not to mention useful - twist to DSL.

New Edge, the business-communications unit of EarthLink, is letting customers tag and prioritize their traffic over five classes of service in DSL, basically making the low-cost access lines extremely functional over a converged MPLS network. To get these prioritization capabilities, companies generally buy more costly T1 lines in conjunction with their MPLS service.

This type of offering is useful for small and midsize businesses, no doubt. But even larger enterprises who have numerous branch locations will find a cost savings. The question, of course, is whether they want to switch their MPLS network from one of the major carriers to New Edge.

Nemertes is currently researching various advanced communications services, including MPLS. As part of that project, we’re tracking the average access speed from branch locations and costs for MPLS. The minimum (and most common) is T1, with many sites at dual T1 and higher. But, when these remote locations are linked to MPLS, companies are spending about $200-$250 for the T1 local loop, plus another $200-$400 for the MPLS port (depending on location, carrier, etc.). Business-grade DSL costs about $30 to $45 per month, and a managed DSL service costs about $100 to $150 a month.

The New Edge service has the potential to significantly reduce costs, while keeping service levels at a predictable, acceptable performance level. This is becoming increasingly important as companies use new voice, data, and video applications - each with different prioritization requirements. Though New Edge hasn’t released specific pricing yet (service becomes generally available in April), it plans to price it between the cost of managed DSL and T1.

It’s refreshing to see an up-and-coming provider deliver an innovative service - one that makes telecom managers smack their foreheads and say, “Why has it taken this long for a provider to offer this service?” (And it’s obvious why the major carriers don’t want to offer this - it cannibalizes their T1 revenue.) New Edge is using Redback Networks’ SmartEdge 800 gateway switches in its private IP network to enable the DSL prioritization.

Robin Gareiss is executive vice president and senior founding partner of Nemertes Research. Click  here for the newsletter archive.