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Ethernet services

Verizon Endorses Ethernet Exchange Model

Verizon Communications Inc. (NYSE: VZ)'s Global Wholesale operation is expanding its use of the CENX Inc. Ethernet exchange, adding connections in Los Angeles and Washington, D.C., because carrier customers like the exchange model. (See Verizon Expands CENX Connection.)

The Ethernet exchange model is proving popular among Verizon Wholesale's carrier customers as a cost-effective way of reaching a smaller number of customers or breaking into a market with Ethernet services, says Brendan Gunn, product manager in the Global Wholesale Unit.

"In the trial period that we ran, we realized this is a viable way to bring players into a market, have them be competitive and move up in the bandwidth curve," Gunn says. "We have been trying to raise the question in the market: 'Are these exchanges really working?' What we have found is that they have proven out to be a viable way of getting carriers to get started."

Verizon will be looking at other sites where Ethernet exchanges are available, although Gunn didn't commit to other CENX sites, nor did he rule out using other Ethernet exchanges, such as Equinix Inc. (Nasdaq: EQIX), Telx Group Inc. or Neutral Tandem Inc. (Nasdaq: TNDM).

Why this matters
While Ethernet exchanges have taken off and are gradually building their clientele, there has been a conspicuous absence of ringing endorsements from major operators, many of which have publicly claimed to have a wait-and-see attitude. Verizon was early to the CENX camp, announcing the New York connection, but has been rather quiet since then, until this announcement. (See Verizon Boosts Biz With CENX Connection and Larger SPs Still Browsing Ethernet Exchanges.)

For more
To explore recent developments in the Ethernet exchange space, check out the following:

— Carol Wilson, Chief Editor, Events, Light Reading

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