RealTime IT News

Dow Jones to Unveil Telecom Bandwidth Indexes

Challenging the notion that Dow Jones & Co. is the stodgy traditionalist of the financial indexes, the firm Thursday revealed it will issue its first indexes of telecommunications bandwidth prices in the second quarter of 2001.

The Dow Jones index unit last week met with a group of telecom carriers and energy trading companies -- including AT&T, Sprint, Global Crossing Ltd., Enron Corp., El Paso Energy Corp., Koch Industries, Dynegy Corp., Aquila Broadband (a unit of Utilicorp United Inc.), and Williams Communications Group -- which are already trading bandwidth. The companies will supply data on the prices of telecom bandwidth between pairs of cities to compile the indexes.

According to Antoine Eustache, global index editor for Dow Jones, the indexes will use the prices from actual sales and purchases of telecom circuits, not prices quoted by buyers and sellers. Each of the companies supplying data will be required to sign an agreement with Dow Jones attesting to the accuracy of the data. Dow Jones will retain the right to audit all participants to validate the data.

The indexes will cover bandwidth prices of circuits connecting major U.S. cities -- including New York-Los Angeles, New York-Chicago, New York-Miami, Seattle-San Francisco, Dallas-Denver and Washington D.C.-San Francisco -- as well as circuits connecting certain cities in Europe -- including London-Amsterdam, London-Paris, Frankfurt-Berlin, and minor routes like Paris-Madrid and Paris-Milan or Rome -- and transatlantic circuits connecting New York and London. Eustache said other routes could be added to the indexes if enough data exists.

The capacity of the circuits covered will range from DS3 to OC192 domestically and from DS3 to STM4 in Europe. The transatlantic circuits covered will initially range from DS3 to STM1 but could eventually cover capacity as high as STM16.

The first indexes will cover six-month and one-year periods and will most likely be a three-month lead time between publication of indexes and the delivery date for the bandwidth covered by the index.