Enron Preps Multimedia-Rich IP Net

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A new supplier of long-haul broadband capacity believes
that it has found a way to allow Internet-service providers to efficiently develop
multimedia-rich consumer-service packages that would compete with cable offerings.

Enron Communications Inc. is preparing to launch a
15,000-mile "pure-Internet-protocol" network within a few weeks.

The network will come with operations and software support
for building coherent business relationships between suppliers of media-rich content and
ISPs, said David Berberian, vice president of engineering at ECI, a unit of gas- and
electricity-supplier Enron Corp.

The emerging environment promises to radically alter the
business structure affecting the distribution of multimedia content to end-users. Given
what ECI is putting in place, it won't be long before even the smallest ISP can offer
consumers its own branded, "broadband-enabled" content.

"ISPs will be able to come to us for content, rather
than having to negotiate the networking and content-supply deals themselves,"
Berberian said.

ECI is among a cluster of suppliers of optical long-haul
networks offering new levels of functionality for distributing high-end content. These
include newcomers like Qwest Communications International Inc. and Level 3 Communications
Inc., as well as established players like AT&T Corp. and MCI WorldCom.

But ECI has gone further than any of those companies to
establish a centrally managed distribution system tailored to aggregation of broadband
content for the consumer market.

Like the other providers, ECI's strategy starts with
the implementation of advanced DWDM (dense-wavelength-division-multiplexing) technology to
achieve high capacity over fiber.

And like the other providers, ECI will make use of very
high-speed routers -- in this case from Cisco Systems Inc. -- that provide support for
quality of service; dedicated, secure connections; multicasting; and other capabilities
that have not been intrinsic to backbone data networks before this year.

Where ECI's strategy differs from that of its
competitors is the degree of focus on the business and distribution needs of providers of
multimedia content. This will be divided into two classes: material distributed at rates
of 1.5 megabits per second or lower; and applications meeting high-quality display
specifications to be delivered at 8 mbps to 15 mbps.

"We are providing customers that offer entertainment
and other media-rich content a means of distributing services on an end-to-end basis,
where their use of the network is metered, rather than charged on a flat-rate, long-term
basis," Berberian said.

The company is implementing a distributed control system
using middleware developed through its newly acquired subsidiary, Modulus Inc., which will
allow it to manage and bill for usage across all points of interconnection with customers,
Berberian said.

With the pay-per-use model, ECI believes that it can more
effectively pool content in attractive packages that allow new business relationships to
be established between content suppliers and ISPs.

"We will be announcing a number of partnerships with
ISPs and content suppliers in April," he said, declining to be more specific.

ECI will have fewer points of interconnection between its
terrestrial network and local distribution points than some of its competitors do. But it
will augment these eight POPs (points of presence) with satellite downlinks to many more
POPs, providing affiliated ISPs with a means of supplying customers with VHS-quality video
and other content in the mass market on a wide scale, Berberian said.

The company has negotiated a relationship with RealNetworks
Inc. for use of that company's G2 streaming technology, which will be adapted over
time to be more tightly coupled with the ECI "Intelligent Network" and its
"InterAgent" middleware.

Ultimately, with content developed to closely interface
with the ECI middleware, the network will allow customers to access capacity on the fly at
tiered rates pegged to quality-of-service parameters, all billed on a per-use basis,
Berberian said. "This is the flange point where the full benefits of this network
will really take hold," he added.

So far, Qwest and other next-generation broadband-backbone
suppliers have not gone to this level of network-management support for the multimedia
community. But they made it clear that they see this market segment as a significant
factor in their efforts to market capacity and functionality. And these entities have the
network elements in place -- including distributed points of caching and colocation of
content-supplier servers -- that will make it relatively easy to add more management
intelligence over time.

"We're in the process of making possible a
broadband community of interests that frees individual entities to distribute content
across the country and across the globe," said Vab Goel, director of IP-network
engineering at Qwest.

"It's not just about distributing media over our
network," Goel added. "It's about facilitating the peering arrangements
with other providers here and abroad that support end-to-end connectivity."

This infrastructure makes possible independent management
of each content provider's piece of the network, where the provider decides which
performance-measurement techniques to use, and where it has access to that information in
real time, Goel said, adding, "Each POP is open to the customer to create its own
test bed."

Qwest is also setting up 10 data centers at strategic
points around the country to further facilitate individual content suppliers' ability
to control their own destinies, Goel noted.

"Customers can colocate their servers with us,
allowing us to help them to customize their applications to take full advantage of the
network flexibility and functions," he said.

So far, deals between content suppliers and next-generation
networking companies have largely been kept under wraps, pending start-up of the new
routers and DWDM pipes.

One of the first to go public with such arrangements was
@Home Network, in its recently announced national broadband-networking deal with AT&T
Corp. @Home said it will launch a 12- ring, two-wavelength OC-48 broadband network
spanning 15,000 route miles across the United States by midsummer.

AT&T sees such entities as an important part of its
target market for advanced data-networking links, which it is offering on a wholesale
basis for service providers to manage as they please, rather than setting up the internal
management structures to support piecemeal applications, such as what ECI is targeting.

A key to the new networking power that AT&T and other
providers are affording content distributors is the peering arrangements that they are
quietly building to accommodate uniform approaches to broadband distribution, noted Eric
Wolford, marketing director for global IP services at AT&T.

"What we're seeing is that as carriers move to
the common [IP-over-optical] platform, there's a trend toward agreement on protocols
... that allow us to maximize the advantages of that platform," Wolford added.

AT&T is preparing to make use of MPLS (multiprotocol
label switching) over its new infrastructure, starting with a trial of
virtual-private-network service, Wolford said.

"What our peering arrangements are telling our
suppliers is that we all recognize that it's in everyone's best interest to
create a seamlessly interconnected broadband-distribution environment," he added.

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