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Cox, Level 3 Deal Seeks To Cut Transport Costs

Cox Communications Inc. has extended its Internet backbone deal with Level 3 Communications Inc. to include advanced peering services. The deal's initial implementation will mean that Cox can connect cable-modem subscribers directly with peering partner Microsoft Corp.'s MSN content servers through Level 3's multiprotocol label switching (MPLS) private network services, rather than numerous tier one backbone providers such AT&T Corp., Sprint Corp. or WorldCom Inc.

As the number of cable-modem subscribers increases, along with the broadband traffic from those users, MSO bandwidth costs rise in order to make connections available between those parties, whether it's for peer-to-peer sharing of movies or music or modem traffic to major content sites.

Level 3 executives said the arrangement means that Cox can save up to 40 percent on transport costs by using a direct virtual link between content providers and end users. "MSOs are moving from IP transit to advance peering," Level 3 director of Internet services Rob Masinter said. "They are all seeking to reduce their costs. They can provision a virtual connection to a content provider."

Cox vice president of data engineering Jay Rolls said, "We believe the (3)Packet service will enable us to cost-effectively peer with MSN and other content and service providers using Level 3's MPLS-backed IP backbone as the facilitator." Rolls added, "As Cox expands the number of peering locations on its nationwide backbone, the (3)Packet service allows us to bridge an important gap in peering while we await turn-up of those new sites."

For instance, Cox's main Internet point of presence (POP) in Dallas will be connected directly to Microsoft's POP in San Jose, Calif., on a Level 3 backbone.

Level 3 also has peering deals with Yahoo! Inc., Sony Corp. and other unnamed content providers, Masinter said. And the company provides Internet access, co-location, private line and metropolitan dark fiber services to Cox and a handful of other worldwide MSOs.

Masinter said the MSN-Cox deal was indicative of other arrangements currently being negotiated by MSOs and content providers, such as Microsoft's deal with Cox to cover the new Xbox Live Internet gaming service when it launches Nov. 15.

MSOs that buy transport from Level 3 could connect cable-modem subscribers who send music and video files to each other, allowing them to use advanced peering, rather than tier one connectivity.

The latter requires that MSOs buy routers and cross-connects, Level 3 said, as well as monthly transport bandwidth. Using Level 3's advanced-peering setup, Masinter said, MSOs would only incur monthly — and even cheaper — OC-12 circuit transport costs and no equipment expenses.

"With MPLS, the traffic is sent over the IP network, then broken into various queues for different applications," Masinter said.