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ENRON COMMUNICATIONS INTRODUCES GLOBAL BANDWIDTH COMMODITY MARKET
FOR IMMEDIATE RELEASE: Thursday, May 20, 1999
PORTLAND - Enron Communications announced today a plan to commence the trading of bandwidth as a commodity -- a proposition that is expected to revolutionize the Internet industry by enabling the competitive enterprise market to order and reserve the bandwidth necessary to utilize a new generation of desktop applications.
“Working closely with others in the communications industry, Enron Communications has developed standard terms and conditions for the commoditization of bandwidth, which will enable businesses to buy and trade bandwidth,” said Joe Hirko, president and CEO of Enron Communications. “Customers will be able to reserve bandwidth for high bit rate applications like streaming media, Internet video conferencing, and high-quality multimedia graphics that are defining competitive advantage in the enterprise marketplace.”
“The trading of bandwidth will supercharge the entire Internet industry by dramatically increasing the efficiency of bandwidth provisioning and deployment,” said Tom Gros, vice president of global bandwidth trading for Enron Communications. “Bandwidth trading levels the playing field for communications companies by making bandwidth more cost effective and more readily available for the development, delivery and utilization of applications. Bandwidth transactions that used to take months to close will literally take seconds, creating wholesale market efficiencies for the industry.”
Enron Communications is proposing two bandwidth commodity offerings between two city pairs. The first is a time division multiplexing (TDM) T-1 (digital transmission link) service between New York and Los Angeles, targeting large multinational bandwidth consumers like Fortune 500 firms. The second service offering will be an Internet Protocol (IP) DS-3 (digital signal) between Washington, D.C. and San Francisco/San Jose, targeting telecommunications firms and Internet Service Providers. These configurations will serve as the benchmarks for the most liquid telecommunications path across North America, as well as launching points to connect to Asian and European markets.
Efficient bandwidth trading will be made possible by Enron Communications’ Pooling Point Operations model, a switching and interconnection facility in selected physical locations through which connections between bandwidth buyers and sellers may be established and monitored. Pooling Points will be managed by a Pooling Point Operator (PPO), an independent third party responsible for scheduling bandwidth connections, monitoring the quality of service (QoS) of each transaction, issuing code numbers for access to web sites and maintaining the physical security and operational integrity of the transactions.
“Pooling Point Operations will greatly increase our bandwidth connectivity and liquidity,” said Gros. “Efficient Pooling Point Operations are a key element in the successful development of the bandwidth commodity market.”
The Pooling Point network architecture has been developed in conjunction with Enron Communications strategic allies Cisco Systems, which will supply the Cisco gigabit switch routers, and Sun Microsystems, which will supply the Enterprise servers and the Solaris operating system.
“Bandwidth trading as proposed by Enron Communications has the potential to create an exciting new business model that promises to redefine telecommunications,” said Larry Lang, vice president, marketing, Cisco Systems, Inc. “Service providers will benefit because they can tap into a much more liquid reserve of bandwidth to meet unexpected customers demands. And end users will benefit because market forces will be brought to bear to ensure that the bandwidth they want is readily available at a fair price.”
“Enron Communications’ concept of a global bandwidth commodity market is an exciting, yet natural progression for the telecommunications industry,” said John McFarlane, president, Solaris Software, Sun Microsystems. “Sun’s vision, product, and service offerings are ideal for supporting this new bandwidth-on-demand model of delivering digital media, ecommerce and other high-bandwidth applications to business users.”
About the Enron Intelligent Network: The Enron Intelligent Network is an architecture based on a unique approach to networking through distributed servers, Enron Communications’ InterAgent® middleware and Enron Communications’ Pure IP™ technology. The intelligence of the network comes from Enron Communications’ standards-based InterAgent, a real-time intelligent messaging technology that supports the development and maintenance of distributed applications across diverse network environments. The Enron Intelligent Network brings to market a reliable, bandwidth-on-demand platform for delivering data, applications and streaming rich media to the desktop. The Enron Intelligent Network allows customers to access on-the-fly capacity, tiered QoS, data, application and content capabilities purchased entirely on an as-used basis.
About Enron Communications, Inc.: Enron Communications, a wholly owned subsidiary of Enron Corp. (NYSE: ENE), is a leader in the delivery of high-quality, high-bandwidth business information and applications. Enron Communications is building a long-haul fiber-optic network on strategic routes throughout the United States to create a data-centric national Pure IP backbone known as the Enron Intelligent Network. It is extending the capabilities of that network through agreements with ISPs and carriers seeking to generate new revenue sources and improved services.
Enron Corp. is one of the world’s leading integrated natural gas and electricity companies. The company, which owns approximately $30 billion in assets, produces electricity and natural gas, develops, constructs and operates energy and water facilities worldwide and delivers physical commodities and risk management and financial services to customers around the world. Enron’s Internet address is /corp, the stock is traded under the ticker symbol, “ENE.”
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For additional information please contact:
Claudia Johnson
(503) 464-3631
Karen Denne
(713) 853-9757
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