Without prejudice: New entity aims to become neutral network host

An emerging network operator with fiber-rich aspirations is banking on the theory that, even in an increasingly optical environment, connecting the content and applications efforts of service providers between cities cannot be accomplished without true neutrality.

Aerie Networks, which debuted last week, plans to build a nationwide, high-capacity, fiber network during the next three years. It will be dedicated to hosting the efforts of application service providers (ASPs), ISPs, competitive local exchange carriers and others demanding what the company has dubbed "Mass Produced Bandwidth." Aerie believes it is unique in the networking industry because it only wants to provide intercity bandwidth.

"All other network builders have built networks to get into the retail or end-user business," said Peter Geddis, CEO of Aerie. "We are in the business of putting others in business."

In terms of facilities and real estate, Aerie certainly has started well. The majority of what the company expects to eventually be a 20,000-mile national network containing 8.9 million fiber miles will be built along the rights of way of 12 gas, oil and petroleum pipeline companies. The utilities exchanged their rights of way for equity positions in Aerie, Geddis said.

"In many network builds, the relationship between the company building the network and the company holding the rights of way is less than cooperative," he said. "We've created a very cooperative environment."

Aerie's principals also believe the company's network scale and its approach to mass production of transport capacity will allow it to offer cheaper bandwidth than the competition.

Perhaps Aerie's most significant opportunities will come from serving ASPs - given those entities' lack of intercity infrastructure - and helping them quickly expand and serve customers with regionally dispersed locations. Currently, the interconnection alternatives to ASPs are primarily large carriers, some of which ultimately might have their own ASP plans.

"We will be building into the metro areas to a spot where we can interconnect with carriers and be in a position to provide facilities to ASPs," said Mort Aaronson, president and chief operating officer of Aerie. "We will not be connecting directly to the end user."

In a sense, Aerie could provide a network operator component to an ASP that previously was unavailable. Part of that capability would come from Aerie's plans to provide customers with an operations support system (OSS) function.

"We've built into our OSS layer the ability to provide all the functionality for them to define and monitor their own networks," Aaronson said. "It's an operator's operator play rather than just a carrier's carrier play."

"Our proposition is that we will be able to provide performance and quality-of-service functions that will allow a whole new class of applications and content providers to control their own destiny and operate a network as a strategic core of their business," Geddis said.

One industry analyst disputed the theory that outfits such as ASPs need the pure play, neutral model Aerie is proposing, in part because ASPs still have to interconnect with other networks to access customers.

"When you host an application, you don't host it in a vacuum," said Jilani Zeribi, senior analyst at Current Analysis. "Regardless of how good [Aerie's] network, service level agreements and traffic management might be, customers will still be accessing the ASP from other networks."

One way supporters of the ASP model might distinguish their efforts is by extending the concept of SLAs to specific applications provided by the ASPs, Zeribi said.

"The new trend that everyone seems to want to promise is application-level guarantees," he said. "You're not only guaranteeing service performance but performance of the application itself."