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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Glenn McDougall who wrote (11590)	5/20/1999 6:25:00 PM
From: pat mudge	Respond to of 18016

A good day to forget the market and look ahead: <<<<< May 20, 1999 02:32 PM By Simon Hirschfeld NEW YORK, May 20 (Reuters) - Enron Communications, the Enron Corp. ENE unit with its own fiber optic network, is working to create a market for trading telecommunications network capacity, the way commodities such as oil or wheat are traded now. The company believes the explosion in demand for capacity, or "bandwidth," creates the need for an efficient, liquid market that would allow companies to close transactions in seconds, rather than weeks or months. A liquid market for bandwidth would allow carriers to allocate capacity where it is needed and respond to event-driven spikes in demand, according to Enron Communications Chief Executive Joe Hirko. Use of telecom network space is currently negotiated between companies in multi-year contracts. In a forward commodity market, as proposed by Enron, trades would be conducted quickly and usually anonymously through a broker. "We are proposing specifically a forward delivery commodity market for bandwidth," Thomas Gros, the unit's vice president of bandwidth trading told Reuters. "Over-the-counter swaps or derivatives and futures are also natural developments down the road." Earlier this year company representatives approached the major North American telecommunications carrier firms about the plan, executives said, and the company is presenting the idea at a derivatives-trading conference Thursday and Friday in New York. Enron is looking to work with industry players to develop standard terms and conditions, including a benchmark for trading comparable to the West Texas Intermediate crude oil standard. Gros said other companies liked the idea and have said they will participate, though he declined to name specific parties, citing the current confidentiality of the talks. Gros compared the current telecommunications infrastructure to multiple highway systems without on- and off-ramps to connect them. Enron wants to establish "pooling points" whereby companies can share between their networks more efficiently. The company is also proposing the appointment of a third party, such as a well-known consulting and accounting firm, to monitor the pooling points and service quality. Enron is proposing two standard contracts to kick-start the market. The first is for a high-capacity T-1 link between New York and Los Angeles targeting large multinational business users. The second is a higher-capacity DS-2 line between Washington, D.C. and San Jose, Calif., which would target telecommunications firms and Internet service providers. Both routes are among the most widely used telecom paths in North America. Cisco Systems Inc. CSCO and Sun Microsystems Inc. SUNW are developing the hardware and software for the system. Enron, a natural gas and electricity company, recently entered the telecommunications field by building a fiber-optic network, which it intends to use to provide bandwidth for Internet applications and services that enhance Internet capabilities, such as video broadcasting over the Web. Enron shares rose $1.38, to $74.38 in afternoon trade Thursday on the New York Stock Exchange.