"will this end the interconnect business?"
I would say no, but I believe it will change the interconnect business significantly. Many of them will (and already have) become resellers of these types of services. If done correctly with QoS (like us

)there are to many advantages and savings to small businesses. You are already seeing it main stream on both coasts.
The cities I have seen with the largest penetration so far are:
San Francisco
New York
Dallas
Many times these cities are the test bed for new technology before it rolls to the rest of us. One thing is for certain, this industry is growing and very fast. No one can deny that.
Here is a link to a marjet study from IDC that predicts a 282% compound annual growth rate through 2008.
www.sbc.com/Common/files/pdf/HIPCS.pdf That my friends is growth.