AboveNet Acquisition Guarantees PAIX Neutrality

AboveNet Communications Inc. Monday
agreed to acquire the assets and liabilities of the Palo Alto Internet
Exchange from Compaq Computer
Corp. for approximately $75 million.

“PAIX
is unique among the major U.S. Internet Exchange points in that it is the
first and only one to have open business policies and neutral peering
policies,” said Sherman Tuan, chairman and chief executive officer at AboveNet.

AboveNet is a co-location facility that arose with the development of the World Wide Web

The company contends that massive bandwidth demands for Web content has
caused congestion and delays on the Internet. AboveNet believes the
performance problems on the Internet are a result of the facilities,
business policies and connectivity procedures at the major Internet
exchange points.

IX points are where Internet service providers converge to exchange
Internet traffic with other ISPs. There are many IXs throughout the world.
The most familiar IX points are Metropolitan Area Exchanges known as MAE-East and MAE-West.

Most of the IX points are owned by telecommunications companies. Most
telcos operate under closed business policies that reuire ISPs to buy
lines only from the telco that owns the IX. AboveNet contents that the
closed business policies create a conflict of interest between the telco’s
desire to sell lines and the diminished performance of the Internet.

PAIX is one of the only commercial IX points not owned by a
telecommunications company. PAIX operates with an open business policy that
offers ISPs a choice of line carriers and encourages direct connections
between ISPs within the IX.

PAIX has become a popular choice for ISPs to exchange Internet traffic
because of its neutral policies and reliable facilities.

After the purchase is approved, AboveNet plans to operate PAIX as a
separate corporation. The PAIX current management team will remain in place and have its own board of directors.

“The new meaning of PAIX will be the Public Access Internet Exchange,”
Tuan said. “The open business policies of PAIX are designed to ensure its
adaptability to meet the ever changing needs of the ISPs.”

PAIX plans to invite reputable industry leaders to be on an advisory board
that oversees the continuation of working policies in support of neutrality.

“Neutrality means that we can offer ISPs a wide choice of carriers, that we
encourage direct connections between ISPs and that we do not offer services
that would compete with our customers,” said Laura Z. Hendriksen, general manager of PAIX.

“By offering the best facilities and facility management services to all
ISPs, PAIX will be improving the performance and reliability of the
Internet. The ultimate benefactor of this acquisition is the Internet and
the multitude of users and businesses wanting to take advantage of the
fastest growing medium in our history for communication and commerce,”
Hendricksen said.