Yesterday’s blog contained an article from the fire of the Telecom Boom: 1999. Enron was rolling out Bandwidth Trading over the Enron Intelligent Network. This raises an interesting question: was Bandwidth Trading a bad idea? I’ve asked this question of several people. The answer I received was almost always decisive. Frequently it was emotional. Often, it came with looks like I was a bit of an idiot for even asking the question.
One thing the answers weren’t: consistent. That is, some people were adamant that it was fundamental flawed from the get-go. If you have a history with Level 3, my guess is this opinion hits home to you.
Others, though, were vehement that it was a great idea. Enron just screwed it up. If you were involved with one of the many companies who were involved with Bandwidth Trading, you probably believe this to be true.
So what is it? Was Bandwidth Trading Dead-on-Arrival, a flawed idea from the beginning that was destined to crash and burn? Or is it in hibernation, waiting for the right technical and market developments and some clever entrepreneur to re-kindle the idea?
I’d welcome any thoughts the readers might have, so if you are inclined to do so shoot me a note. I will provide my thoughts in a future blog.
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I remember writing about Enron and bandwidth trading back “in the day” for Inter@ctive Week and The Net Economy, and it always seemed to make sense to me.
What’s the major downside? Other than potentially doing business with a fundamentally corrupt organization.
Bandwidth trading is DOA. The goal is worthy but I believe the trading concept just doesn’t make sense with the technology.
Bandwidth is the capacity supplied by the buildout of fixed infrastructure. At scale, this capacity is expensive.
In order to have capacity available, it must be constructed ahead of time. Once constructed, it is not easily moved.
I would propose that an effective bandwidth trading infrastructure would require enormous amounts of excess/unused capacity built out. This is not just the fiber, but also the electronics installed to carry that capacity. Given today’s cost for infrastructure and price for bandwidth, this doesn’t make sense.
One might call buying Internet Transit a form of bandwidth trading. This allows carriers to be their own broker. Connecting to multiple IP transit providers in a colocation facility allows one to be their own bandwidth broker.
The IP Exchange type services appear to have mostly gone away. The growth of the Internet has outpaced the technology to cost effectively provide a large volume exchange service. Direct connects are the way to go.
To a degree Akamai and other CDN services engage in brokering bandwidth to optimize cost. While a CDN’s primary value prop might be the content serving intrastructure and availability, CDN’s like Akamai also have the ability to serve up content on behalf of their customers via the networks that are lowest cost.