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Enron rings opening bell for bandwidth exchange

A subsidiary of energy industry giant Enron starts trading space on high-speed networks for communications carriers.

    The opening bell has rung for a new kind of exchange. The currency? Bandwidth.

    A subsidiary of energy industry giant Enron, Enron Communications, today opened the doors to a bandwidth commodity exchange. The company first announced its intention to sell space on high-speed networks as a commodity in May.

    Traditional commodity exchanges sell goods like oil, natural gas and grain. Enron has taken this concept and given it a telecommunications spin, offering space on high-speed networks to communications carriers.

    In the past, carriers looking to fill holes or service gaps in their networks would have had to enter long-term contracts with other carriers to fulfill their bandwidth needs. The exchange, Enron says, acts as a sort of middleman for carriers to find short-term contracts or quick fixes as they complete network construction or try to manage heavier-than-expected network traffic.

    For example, Global Crossing plans to sell capacity on a high-speed fiber optic link between New York and Los Angeles over the exchange.

    Enron also expects to start an international bandwidth trading market next May.

    Separately, RateXchange, a similar bandwidth exchange, demonstrated its own commodities trading system at a telecommunications conference in New York today.

    RateXchange predicts that the trading of bandwidth and other telecommunications products could become a $8 billion market by 2002.