Enron Plans Bandwidth Market

Internet provider Enron Communications Thursday announced plans to trade bandwidth as a commodity, enabling businesses to order and reserve capacity for bandwidth-intensive Internet applications.

Enron expects that bandwidth trading will make Internet application more efficient and cost-effective, as well as pave the way for development of new applications. The innovation also means companies will easily be able to secure additional capacity without having to sign long-term contracts.

Enron Communications will offer two bandwidth commodity services. The first is a time division multiplexing T-1 service between New York and Los Angeles targeting multinational corporations, and the second span will link Washington, D.C. and San Francisco/San Jose targeting telecoms and ISPs.

Enron will use its pooling point operations model for bandwidth trading, a switching and interconnection facility where connections between bandwidth buyers and sellers may be established and monitored. An independent third party will monitor and schedule bandwidth connections and transactions, issuing code numbers for secure access to Web sites.

Enron developed the pooling point network architecture in partnership with Cisco Systems, which will supply gigabit switch routers, and Sun Microsystems, which will supply the its servers and operating system.

Service providers will benefit from the new service by tapping into a more liquid reserve of bandwidth to meet unexpected customers demands, and end users will benefit from readily available services, said Larry Lang, Cisco’s vice president of marketing.

“Customers will be able to reserve bandwidth for high bit rate applications like streaming media, Internet video conferencing, and high-quality multimedia graphics that are defining competitive advantage in the enterprise marketplace,” said Joe Hirko, Enron Communications president and chief executive officer.

Enron did not mention when it expects the new market to open.

The company is currently building Enron Intelligent Network, a fiber-optic network throughout the U.S. to create a data-centric national IP backbone.

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