CENX - Carrier Ethernet Interconnections with a Voice Exchange

By Hunter Newby

A new entrant to the Ethernet exchange world has arrived – CENX (News - Alert). Carrier Ethernet Neutral Exchange is the proper name and what really defines this business model is the service of facilitating interconnections between Ethernet transport networks. This is done through a common Layer 2 Ethernet switch as VLANs between the carrier participants. Logically, each must be an operator of an Ethernet transport network, or at least have an Ethernet interface, in order to participate.

The CENX model is unique in that it focuses on a component of Ethernet that to date has not been developed – pure transport. Other Ethernet-based switching platforms have been around for a long time, such as generic Internet Exchange Points for Internet protocol exchange at Layer 2, but CENX is not focused on IP peering. The need that CENX proposes to address is that of last-mile to long-haul transport interconnections for Ethernet networks, but the one-to-many effect of Ethernet-based VLANs over the old-world, linear TDM connections is what is being leveraged to create value just as it is in the IX world.

From the CENX Web site:
CENX services include: flexible physical and virtual interconnect, expert service alignment, and real-time service management, together with an overarching CENX Market, a member-tailored marketplace for buying and selling service providers. CENX interconnects service providers’ Carrier Ethernet networks around the world and enables vast revenue opportunities, dramatic time/cost-saving and Carrier Ethernet global ubiquity.

IP peering can certainly fit within this if ISPs are allowed and choose to connect to the CENX Ethernet switch, but IP peering comes with its own set of requirements that function at higher layers of the OSI stack, and clearly there are many players already in that space. It is unclear at this point as to whether or not the existing IXs of the world (LINX, AMS-IX, DE-CIX (News - Alert), etc.) can reverse integrate the Ethernet transport connection business model, or would even desire to. Certainly the ability for carriers to provision VLAN-based cross-connects for Type II Ethernet transport circuits adds significant value in reducing time (not having to run physical layer cables) and in many cases costs (lower monthly recurring fees by avoiding physical layer cross-connects). CENX is a shift not only in the technology of interconnecting, but also in the business model of interconnecting itself.

Beyond the potential for IP peering within a pure Ethernet transport switch CENX has positioned the service as a voice exchange.

From the CENX Web site:
CENX enables competitive carriers transitioning to IP to exchange traffic with one another on a highly efficient, tandem-like carrier-class Ethernet platform, without the margin-eroding charges and connection limitations of legacy tandems and TDM direct connects.

Here again we see the one-to-many effect of the VLAN. Since Ethernet is the root of the transport method we can assume that the voice being exchanged is VoIP. This statement is ultra-conservative and overly obvious, but made just the same. Given that, upon further examination we see that this voice exchange service is really at Layer 2 and does not actually possess any voice switching functionality at all. This is not such a bad thing, but needs to be clearly spelled out as many people get confused as soon as they hear the word voice. The confusion rests with those that believe the only business model for voice is to bill users per minute. This is not correct and mindsets change as the weeks pass, but we are all not entirely there yet.

If this voice exchange were to be put in to the category of a VoIP peering platform it might be best understood if it were compared to two other well-known VoIP peering platform services, XConnect (News - Alert) and The Voice Peering Fabric. The most notable differences are that XConnect and The VPF both deal with ENUM (E.164 Number Mapping) for endpoint resolution to facilitate true multi-lateral VoIP peering. The VPF (News - Alert) also has an SRV registry, which uses e-mail addresses for VoIP calls; separately XConnect also provides a transcoding flavor of peering to content with mismatched gateways using different VoIP protocols as well as a VoIP spam (SPIT) protection service. These are all very much VoIP applications and not strictly voice interconnection.

The VPF is unique in that it is a true, globally-distributed peering exchange. In the IX world, distributed means that the IX has its own Layer 2 (usually wavelength, but could be Ethernet) connections linking two or more Ethernet switches that are distributed around the world in different locations. The benefit to this is that a user connected to one of the IX points can peer IP traffic with a user connected to another IX point, and they do not need a dedicated circuit between them. The IX distributed circuit(s) take care of that.

With the CENX model it would be very difficult, if not impossible, to be distributed in the IP sense since what is being facilitated is in fact not IP, but rather Layer 2 circuits. For CENX to have its own circuits between the CENX Ethernet switches would defeat the purpose of connecting its members for that function – at least on the long-haul links between the carrier hotels. Although this may become a value-add for enterprise customers at some point, thus allowing them to only have to deal with sorting out last-mile tails in major metros, the carriers all do this themselves with most, if not all, of the major carriers having plenty of capacity in place already on these routes.

The real value of the CENX is the ability for the Ethernet transport carriers that all have capacity on the same long-haul routes to connect seamlessly to last-mile Ethernet transport providers in metros. This will speed up the provisioning process and reduce costs dramatically. CENX has initially launched in New York, Chicago and Los Angeles and also has developed a partnership with Interxion (News - Alert) in Europe to add London, Amsterdam and Paris. As the major carriers connect and begin to realize the benefits for CENX at the carrier-interconnect level, it will not be long before the CENX is driven to many new global markets based upon the demand for efficiency. Go CENX! IT

Hunter Newby is CEO of Allied Fiber (News - Alert) (www.alliedfiber.com).