Where carriers meet: Neutral collocation serves numerous niches

Neutral collocation facilities, also known as carrier hotels, initially gained attention as a solution for competitive local exchange carriers that wanted to put equipment in an incumbent carrier's central office but were prevented from doing so because of space constraints or regulatory restrictions. Many states forbid CLECs from installing switching equipment in an incumbent's CO.

More recently, however, various service providers have discovered that neutral collocation facilities are a good place to connect to one another-and are leveraging that ability to offer new services and minimize costs.

"The price to get into a CO is exorbitant and there are delays," said Tim McAllister, chief operating officer for broadband wireless CLEC Broadlink Communications, which collocates in a neutral San Francisco facility operated by Colomotion. "We liked the concept of having access to different [CLECs.]"

Broadlink, which provides the last-mile connection for Internet service providers and other carriers, uses the Colomotion facility to aggregate traffic from multiple carrier customers.

Because Colomotion has so many fiber connections coming into its facility, the price for an individual connection is less than Broadlink typically encounters, he said.

Also among Colomotion's customers are regional ISPs that want to exchange locally destined traffic with each other. By minimizing their dependence on crowded public peering points, ISPs can improve end user response times and reduce costs.

"It makes no sense to go to the [public network access points] for the majority of traffic exchange," said Colomotion CEO Peter Bernf.

To support such private peering arrangements, Colomotion recently installed a routing switch from Packet Engines to facilitate traffic exchange among ISPs. The device supports 240 ports of fast Ethernet and 25 ports of gigabit Ethernet.

Colomotion's facility is also popular with voice-over-IP entrepreneurs that use it to house gateways and to connect to multiple ISPs, said Robert Lamb, Colomotion's vice president of marketing.

Colomotion's San Francisco facility has 30,000 square feet. The company plans to open additional locations in other markets, including Chicago and Houston, said Bernf.

Switch and Data Facilities is another company that intends to play in the neutral collocation market. The company recently opened its first facility in Philadelphia and also plans to open in Chicago, Dallas, Denver, Los Angeles, Miami, Newark, N.J., New York, Phoenix and San Francisco. Switch and Data Facilities has a strong background in real estate as well as technology, said President Jim Lavin.

The company already has signed up several CLECs and several digital subscriber line providers that want to aggregate traffic to a central point, Lavin added.

Although it may have to reorganize again if and when its planned merger with GTE is approved, Bell Atlantic announced last week that it is restructuring its business units to gain strength in key markets. Under the plan, a new office of the chairman and six business groups will be formed.

The office of the chairman, headed by Vice Chairman, President and CEO Ivan Seidenberg, will oversee total business operations and mergers. Joining Seidenberg in the office of the chairman will be Lawrence T. Babbio Jr., president and CEO of global wireless; James G. Cullen, president and CEO of telecom; and Fredrick V. Salerno, senior executive vice president and chief financial officer.

The six business units are designed to answer changing conditions faster by directly controlling the resources for their specific markets. The groups also will have full accountability for financial performance.

The six business units and their presidents are:

* Enterprise business group-Bruce S. Gordon, currently group president of retail services

* General business group-Regina H. Novotny, currently vice president of Pennsylvannia/Delaware customer services

* Consumer group-Frederic D. D'Alessio, currently president of consumer sales and service

* Network services group-Paul A. Lacouture, currently vice president of network planning and engineering

* Directory group-Matthew J. Stover, currently group president of information services

* Wireless group-Dennis F. Strigl, currently president and CEO of global wireless

According to Bell Atlantic officials, this new structure has a more entrepreneurial feel that will make the company more competitive.