Carrier Ethernet Exchanges on the Rise

CEN Feature (May 6 2010) Wholesale / Exchange

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   Carrier Ethernet services are getting a boost now that Carrier Ethernet exchanges are beginning to launch. Metcalfe’s Law argues that the value of a network increases exponentially as more endpoints are added—and increasing the number of endpoints that a carrier can reach is the goal of the new exchanges.
   
   Many end user locations are served by a limited number of Carrier Ethernet providers. In the past if an end user organization wanted to connect locations not served by the same carrier, the only choice was for the carriers involved to establish a network-to-network interface—which was a lengthy process for several reasons.
   
   First the carrier had to pore over lists of buildings served to determine which other carriers might be a potential partner. Then the carrier had to reach out to those companies. Once the right partner was identified, companies began the process of establishing an NNI, which entailed both contract negotiations and network engineering. Carrier Ethernet can support numerous classes of service and other capabilities and no two operators have implemented it in exactly the same manner, so the engineering process could be a length one.
   
   Carrier Ethernet exchanges aim to streamline those tasks by enabling a carrier to establish a single connection to an exchange and through it, to reach customers served by any other carrier in the exchange. Whatever network translations and mediation are required are established up front. Operators of Carrier Ethernet exchanges also have developed or are in the process of developing software interfaces to simplify the process of determining which carriers serving a particular location can be reached through the exchange and to automate the order placement process.
   
   The first Carrier Ethernet exchanges, operated by CENX—a startup formed with the express purpose of entering the Carrier Ethernet exchange market--launched in 2009. More recently, data center operator Equinix said its exchanges were open for business. Others also are pursuing this business, including Neutral Tandem, a provider of carrier interconnection services that already has co-location facilities.
   
   

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