Ethernet Gets a CENX View

NEW YORK -– ETHERNET EXPO 2009 -- CENX, the latest startup led by Metro Ethernet Forum (MEF) president Nan Chen, has set up three U.S. peering points for Ethernet services, aiming to extend the reach of Ethernet services by making it easier for carriers to connect to one another's networks.

It's an effort more than two years in the making, Chen tells Light Reading here on the opening morning of this year's Expo as CENX gets its formal coming-out in the form of a press conference. In fact, he says he's been working on (or at least thinking about) the issue of Ethernet interconnect since 2004, relatively early in the MEF's process of thinking about Ethernet services, because he knew it would be an eventual requirement.

Light Reading first reported on CENX in July and almost unraveled the company's name correctly -- it stands for Carrier Ethernet Neutral Exchange. (See Nan Chen Takes CENX Route.)

The idea is to provide common ground for carriers to hook to one another's networks, as is done in voice networks and the Internet. If a carrier wants to pursue an Ethernet customer that's outside its network's reach, it can go through a facility like CENX's to buy wholesale bandwidth on another provider's Ethernet network.

"Just look at one of the smallest service providers in the United States. They can access the world," Chen says. Likewise, a small (or large) provider could sell its network footprint, essentially, to providers worldwide.

Equinix Inc. (Nasdaq: EQIX) has already pledged to create such a service, but CENX has been up and running for a few months, Chen says. (See Equinix Offers Global Ethernet Peering .) CENX's facilities are in well-known collocation facilities: 1 Wilshire (Los Angeles); 60 Hudson (New York); and 350 E. Cermak and 427 S. LaSalle (Chicago).

In those spots, CENX has set up equipment (from vendors Chen won't name) along with software that watches the traffic, enforcing service level agreements.

CENX takes the interconnect concept one step further by providing a Web interface that lets bandwidth sellers display what they've got -- and lets buyers shop for the bandwidth they need.

By creating these interconnect spots, CENX and Equinix let carriers avoid having to set up interconnection agreements one by one, an arrangement that becomes inefficient and cumbersome as the number of ad hoc deals increases. The MEF is working on standards for these network-to-network interfaces. (See Supercomm: Ethernet Peering Gets Closer.)

CENX is privately funded by Chen "and a few other folks," as he puts it. He's not disclosing the other investors yet, or how much was put into the company.

Chen says his position at CENX won't be a conflict of interest with his job at the MEF. He says the MEF has had a service-provider committee examining the question of Ethernet peering, and an independent exchange company was deemed the best answer. The committee members were AT&T Inc. (NYSE: T), Cox Communications Inc. , Level 3 Communications Inc. (Nasdaq: LVLT), Optimum Lightpath , Orange SA , Tata Communications Ltd. (NYSE: TCL), and Verizon Communications Inc. (NYSE: VZ).

"This is really driven by the service provider set of the MEF. They really see there's this pain. They really want to get it done," Chen says.

He stresses that CENX is an extension of the work at Qosera, his former startup -- which, he adds, did not shut down, contrary to some Ethernet sector gossip. Qosera was working on specific technologies that are now being put to use at CENX, which is more of a services company. (See Chen All Quiet on Qosera.)

"I've been having this idea for a long time," he says. "Qosera is just one step of the way, working on some of the technologies that turned into CENX."

— Craig Matsumoto, West Coast Editor, Light Reading