Destination-Based Bandwidth Billing is Born

Internet access is transforming the way that transport is served from an
all-you-can-eat bandwidth binge to a lean, mean price-per-destination machine.

In order survive in a brutally competitive market, successful ISPs have
expanded service portfolios to offer differentiated products over existing
infrastructures, but never tapped into the means to bill for bandwidth
consumed by packets of data.

Level 3 Communications Inc. is the
first data transport wholesaler to rise to the challenge and develop a
high-performance network that has the potential to reduce bandwidth costs
for service providers by as much as 50 percent.

Dubbed CrossRoads, Level 3 Monday unveiled its
Destination Sensitive Billing program, one of the industry’s first pricing
plans based on the destination of Internet traffic rather than traditional
flat rate pricing.

The new service enables Level 3 customers to reap long-term bandwidth
savings and bypass congested Internet exchange points.

Level 3’s CrossRoads program minimizes latency and packet loss to improve
the end-user experience. Additionally, service providers may finally be
able to place a price tag on spammers that hijack their bandwidth.

Andrew Morley, Level 3 senior vice president of global transport and IP
services said flat rate pricing might become an inefficiency of the past.

“This new service demonstrates our commitment to product innovation and
attractive pricing,” Morley said, “while providing unsurpassed performance
for Internet service providers, Internet content companies and other
Web-centric businesses.”

Level 3’s CrossRoads is an IP service network platform can interface with
Ethernet, SONET, T-1 or OC-3 connections to deliver its packet-metering
pricing plan. It uses a proprietary approach to track the destination and
monitor the bandwidth usage of IP packets traveling off or on its fiber
network. The result is that customers using DSB pay only for the bandwidth
used.

Nisha Dass, an industry analyst with Network Strategy Partners LLC
said the flexible billing program is a better fit for meeting bandwidth
demands.

“Level 3’s new destination-sensitive pricing is a good example of the new
kinds of innovation we expect to see as the industry moves away from flat
rate pricing models,” Dass said.

“We are finally moving to the stage where service providers are migrating
to more intelligent and creative billing,” Dass added. “CrossRoads not only
significantly reduces the cost of bandwidth to Level 3’s customers but it
also gives them the flexibility to choose the billing model more
appropriate to their traffic patterns.”

Brian Horsfield, Level 3 vice president of global IP services said its new
CrossRoads platform would substantially change the way wholesale Internet
access services are offered.

“Level 3’s new destination-based billing structure rewards our customers
for bringing traffic, and exchanging traffic, on our network,” Horsfield
said. “As a result, CrossRoads is sure to drive more bandwidth onto Level
3’s metropolitan and long-haul networks in the U.S., Europe and Asia.”

The service is currently available in 38 major North American markets where
Level 3 owns and operates its communication gateways, including Atlanta,
Boston, Chicago, Dallas, Denver, Los Angeles, New York, San Francisco,
Seattle and Washington, D.C.

Level 3’s CrossRoads service permits four different types of billing for
DSB traffic categories:

  • Intra-City (Sent) – On-net traffic originating and terminating within a
    specific Gateway city.
  • On-Net (Sent) – Low-cost traffic originating and terminating on the
    Level 3 backbone. Exchange traffic with other companies directly connected
    to the Level 3 network anywhere in the world.< /li>

  • Off-Net (Sent) – Traffic terminating with a third-party. Allows
    uncongested pipeline for dedicated interconnects to major Internet
    carriers.
  • Receive – Any traffic type that terminates on the Level 3 backbone.
    Provides low transport rates regardless of where the data originated.

Because it differentiates destinations, the program acts more like a voice
carrier, which bills different customer’s varied rates for local, regional,
long-distance and international calls.
DSB customers pay for either sent or received traffic — not both.

Level 3’s fixed pricing remains available if clients prefer a flat monthly
recurring rate.

Level 3 plans to offer CrossRoads services in 11 European and Asian markets
by the end of the year.

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