Backbone Help on the Way From Start-Ups Enron, Edgix

Two start-ups promise to significantly expand the emerging
broadband-backbone infrastructure for content suppliers developing media for distribution
over high-speed-access links.

Enron Communications Inc., which has been in business since
September, has tapped power-company parent Enron Corp. for resources to expand its global
Internet-bypass network. It cut a deal with Sun Microsystems Inc. that calls for deploying
18,000 carrier-class servers in more than 2,000 points of presence worldwide.

And newcomer Edgix Corp., backed with venture funding, is
preparing a satellite-based service that takes a new approach to facilitate
Internet-service providers' delivery of broadband media over digital subscriber lines and
other access systems, including cable.

There is a sudden surge in demand for means to get
broadband media to DSL- and cable-connected end-users, using local caching servers linked
to national satellite and fiber networks at the edges of metro areas.

Demand for servers that support caching and
application-hosting in the ISP sector -- which accounts for nearly 60 percent of Sun's
carrier-class "Netra" server business -- is "booming like mad now,"
said Dan O'Farrell, group marketing manager for Sun's Netra line of servers.

"We focused this past year on building out our product
family to meet the needs of this sector," O'Farrell said. "Now the challenge is
to make product as fast as possible to keep up with this demand."

Using terrestrial fiber links from the parent company, as
well as satellite, Enron is connected to more than 75 ISP POPs in about 17 major metro
regions, including three in Europe, vice president of strategic alliances Jim Crowder

The goal is to establish "mega-POPs" in 75 cities
worldwide, using local terrestrial fiber links to connect to ISP POPs in each of those
major areas, he added.

Enron's deal with Sun also calls for close cooperation on
developing intelligent-network application-program interfaces that will enable Java-based
applications to contain "hooks" to run those applications over advanced
Internet-protocol networking platforms, such as Enron's "Broadband Operating

Enron's operating system already provides the mechanisms
for individual service providers to access directory services, read meter usage, define
quality of service and activate other functions tailored to customer needs.

But a standardized API framework built on Java would allow
application developers to build intelligent-networking applications that work in any
environment, Crowder said, adding, "We're creating an incubator through our network
for development of intelligent-networking applications that are essential to what many
people call 'Internet 2.'"

In an Internet 2 environment, providers of specialized
applications -- for content suppliers, enterprise customers, electronic-commerce-site
operators or public-service providers -- can offer applications from servers on the
network on an as-needed basis. This avoids the need for "nailed-up" circuits or
other special one-to-one relationships with individual customers.

In the content realm, providers of broadband media can tap
into specialized applications for usage tracking, billing, performance monitoring and
other tasks more efficiently and across a wider base of service providers, Crowder noted.

While enterprise and e-commerce applications have long been
a driving force behind Enron's network-expansion plans, demand for distribution support
for broadband content has skyrocketed lately, Crowder said.

"Earlier, our challenge in the marketplace was a
chicken-and-egg situation, where potential distribution partners would ask [about] content
and potential content partners would ask [about] the distribution network," Crowder

"The announcement of the AOL [America Online
Inc.]-Time Warner [Inc.] deal has validated the idea of broadband services to where we've
seen an explosion in demand for distribution support, especially in the content
space," he added.

Edgix sees the same thing, said Abhi Chaki, director of
business development at the new firm. He added that actual developments on the ground are
driving demand.

"The biggest problem for service providers that are
providing high-speed access, whether over DSL or cable, is the difference between what
customers expect in performance and what they get," Chaki said. "The
backbone-distribution bottlenecks only get worse when you add high-speed access, because
people are pulling in more content at a faster rate than they did over dial-up

Like other backbone providers, Edgix is counting on
satellite support -- in this case from Loral Space & Communications Ltd.'s
"CyberStar" network -- to deliver IP content in multicast mode to the edge of
terrestrial fiber networks.

Edgix is using big caching servers in its local POPs, in
combination with advanced software, to support "one-hop" access to the cached
content for end-users.

This provides a streaming pipeline that maximizes the
effectiveness of new content-compression and delivery platforms that make possible the
delivery of full-screen, full-motion video and other multimedia formats over DSL or
cable-data links operating at a few hundred kilobits per second.

What distinguishes Edgix is its service-provider-focused
model and the proprietary software it uses to maximize distribution effectiveness, Chaki
said. "We're basically a layer-three [application-service provider] targeting the ISP
market as our customers, rather than the content providers," he added.

"There's tremendous interest in what we're offering
from ISPs, because they all now want to be broadband ISPs," Chaki said. "The
question is: How do they avoid the customer churn that comes with end-users discovering
that their DSL or cable service doesn't operate any better than 56 [kbps] a large share of
the time?"

Edgix, which is now in beta-tests with unnamed customers,
provides service to ISPs on a flat-rate monthly fee basis.

"The problem with the business models of many of our
competitors is that they're providing distribution support for only the select group of
content suppliers that contract with them, which may or may not be content of interest to
the ISP's customers," Chaki said. "What we offer the ISP is access to all of the
broadband content that's out there."

A key problem, which Edgix is addressing with its software
innovations, is that content delivered in point-to-multipoint multicast mode to local ISP
POPs could quickly overwhelm local caching capacity, leading to the same types of
bottlenecks that currently plague the backbone system.

"Over time, the amount of irrelevant content exceeds
content that's relevant to the end-users in the local area, so you end up with a lot of
locally cached junk," Chaki said.

The Edgix software creates user profiles for content so
that even though it is multicast to all points, it is only stored in instances where local
users are likely to want it.

Edgix, which just completed a $15 million round of
financing, plans to launch commercially as soon as it is satisfied that it has worked out
any kinks it finds in the beta-phase, Chaki said. "We're operational in North and
South America now, and we'll go live in Europe in March," he added.