Enron rings opening bell for bandwidth exchange

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.