Enron Communications is planning to set up a market that would trade Internet bandwidth the way commodities markets trade porkbellies and oil.
Along with partners Cisco and Sun, who will provide the hardware and software to run the service, Enron will set up its Pooling Point Operations in key network backbone locations, initially in the US, which will handle the transfer of bandwidth between buyers and sellers.
The goal is to introduce competition and efficiency into the enterprise marketplace, enabling large companies and service providers to reserve the bandwidth needed for multimedia applications, application outsourcing, one-off Web events and other bandwidth-intensive uses.
"The trading of bandwidth will supercharge the entire Internet industry by dramatically increasing the efficiency of bandwidth provisioning and deployment," said Tom Gros, vice president of global bandwidth trading for Enron, which is a subsidiary of the US energy company.
"Bandwidth trading levels the playing field for communications companies by making bandwidth more cost effective and more readily available for the development, delivery and utilisation of applications," Gros said.
"Bandwidth transactions that used to take months to close will literally take seconds, creating wholesale market efficiencies for the industry."
Enron is building its own IP network among major US cities and is hammering out peering agreements with other network providers. Using a third party to monitor what Enron calls "pooling points" for quality of service, Enron has drawn up a bandwidth commodity market starter kit.
Enron's plan would make network investment decisions less risky. Corporates will pay for just enough for their needs.
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