The questions stand

Jim Dixon jdd at
Mon May 25 08:54:07 UTC 1998

On Wed, 20 May 1998, Jim Browne wrote:

> >In fact, I could operate the exchange as a co-op, _owned_ by all the
> >local providers.
> That has already happened in a number of rural areas and some metro areas
> (Colorado Co-op?).  The problem traditionally has been getting small
> competing providers to cooperate.

It has also happened in the UK, where both of the two exchanges are
co-ops owned by their members.  Both the LINX (
in London and MaNAP ( in Manchester are run 
along the lines of clubs, with operational guidelines laid down by
their members.  Both are growing rapidly, act to keep local traffic 
local, and have ample capacity.  Costs to members are low and the 
benefit returned, especially at the LINX (which is considerably older),
far exceeds the cost to each member.

But if the UK experience is anything to go by, if the exchange is to 
succeed it must be neutral, and in particular it must not sell bandwidth.
At both UK exchanges, the members have consistently rejected any sale of
bandwidth by the exchange or any use of the exchange for sale of transit.

In order for this model to work, someone else must provide the 
colocation facilities.  The LINX is based at Telehouse Europe, a 
large purpose-built building which is the hub of the UK 
telecommunications system.  The LINX itself is a non-profit coop; 
Telehouse is run for a profit (and is very profitable indeed).  

MaNAP is based at the University of Manchester, in a facility that
used to house the university's supercomputer.  Venture capital has
funded a new colocation facility several hundred yards away (Telecity), 
and MaNAP will shortly expand into the new facility, linking its two 
halves by fiber optics.

In both cases the exchanges apply pressure on the colocation
facility operators to improve the quality of their offerings.  
Splitting MaNAP between Telecity and the University puts pressure on
both suppliers to reduce costs and improve service.

>From our experience, what is needed for a successful exchange is

*	a local market of decent size (there are about 16 million people
	in the Liverpool-Manchester-Leeds corridor)

*	an exchange organized as a coop, one that guarantees that it 
	will not compete with its members

*	openness; it must not just be an "us against them" grouping
	of little guys - the larger ISPs must feel comfortable in 

*	technical competence

*	good colocation facilities with round the clock security,
	24x7 access, and preferably 24x7 remote hands

Counter-intuitively, it appears that the more independent the exchange
is of the colocation facility, the more successful the colocation 
facility is likely to be as an investment.

Jim Dixon                  VBCnet GB Ltd 
tel +44 117 929 1316                             fax +44 117 927 2015

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