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Through several giant evolutionary steps, Ethernet has become an almost ubiquitous technology for communication. Being versatile enough to be employed in new and various fields of application, it is now making inroads in factories. However, automated systems are different from many other applications of Ethernet,first and foremost because they require the network technology to deliver real-time performance. In the present study, a number of critical aspects of Ethernet, usually referred to as an Industrial Ethernet, are examined. More specifically, there is a focus on the application-to-application delay and jitter characteristics of such networks, when using Internet protocols such as UDP and TCP. It is demonstrated how important it is to take control of the latency in the station nodes, since the main communication delays occur inside the nodes, and different solutions are presented for controlling these delays. In particular, a priority-based protocol stack is assessed. The results show that real-time, Ethernet-based IP communication is now adequate even for demanding automated applications. In this paper, substation automation (power distribution) is used as an example of a demanding automation system.