Verizon Communications Inc. (NYSE: VZ) expects to increase its Verizon Partner Solutions’ wholesale business by about 30 percent based on its participation in the new CENX Inc. Carrier Ethernet Exchange in New York City.

Both global and domestic carriers that hesitate to invest in a wholesale Ethernet circuit directly from Verizon Partner Solutions now have the option to connect through the CENX exchange, which they may find more palatable, notes Larry O’Neill, Ethernet product development manager for Verizon Partner Solutions.

“Very often, the perception with that first Ethernet UNI that connects from their PoP [point of presence] to Verizon’s Ethernet network is that they have overcommitted to us,” O’Neill says. “Usually they do wind up filling it, but it’s a matter of perception. This gives us another option to offer them.”

Carriers connect with CENX on their own terms, with the exchange handling any translations and interoperability issues when those carriers are connected to Verizon’s Ethernet service.

Verizon Partner Solutions is the first announced customer for the CENX exchange, which only went public in November. (See Nan Chen Takes CENX Route).

"As a Tier 1 operator, Verizon already has established a lot of individual network-to-network interconnection arrangements with other carriers and could have chosen to wait and see how the new Ethernet services exchange market evolved before jumping in," said Stanley Hubbard, senior analyst for Heavy Reading. "But Verizon consistently has demonstrated leadership in driving the entire industry forward and opening up options for its customers. This is a nice vote of confidence for CENX as well as for the overall Ethernet exchange concept promoted by others like Equinix that has at least nine participating carriers in its exchange."Service providers connecting through CENX benefit from being able to deliver an end-to-end Ethernet offering to their customers, says Nan Chen, CENX co-founder and CEO:

“That has always been the vision of the Ethernet community, that we want to have end-to-end interconnect services. One of the efficient ways of doing that is through the exchange model."

The exchange approach also enables service providers to more efficiently fill their Gigabit Ethernet pipes and extend their service reach, according to Chen.

For Verizon Partner Solutions, it’s all about generating more options for customers and generating more business, says O’Neill.

— Carol Wilson, Chief Editor, Events, Light Reading