Economic concerns notwithstanding, the new hosting and collocation space announcements aren't quitting, and they probably won't until supply comes close to equaling demand.
Focal Communications, a Chicago-based competitive local exchange carrier, is delivering on its promise to alter its business by offering rack space to other service providers in full-featured Internet data centers.
Just in the first few days of the year, Focal announced its fourth and fifth Focal Internet Exchanges -- in Northern New Jersey and outside Washington, D.C. The company had earlier opened sites in Philadelphia, Chicago and San Francisco (see "Turnabout is fair play for CLEC collocation,").
This represents quite a change of direction for Focal, which began as basically a plain-Jane voice and T-1 CLEC. To some extent Focal also is racing against an expected government decision to phase out "reciprocal compensation," a method of intercarrier payments that has tended to benefit CLECs who count ISPs as customers of their private lines.
Under reciprocal compensation, the CLECs receive what amount to per-minute tolls from Bells for Bell customers who dial in to those ISPs, even though the whole industry long ago agreed that per-minute access fees don't really fit the Internet model. The FCC was supposed to take up the issue at its Jan. 11 meeting, but put it off amid all the hullabaloo about its conditional approval of the AOL Time Warner merger the same day.
Still, Focal put in a plan last year to compensate for this expected loss by moving to enhanced data services like hosting and collocation, while seeking continued growth in its bread-and-butter local access lines.
Of course, Focal's sites, generally no more than 10,000 sq. ft., are small potatoes against leading hosting companies, of which AT&T is now bucking to become one. The telecom giant recently announced it has completed more than 1 million sq. ft. of space and ramped up its plans for additional hosting centers in 2001 and beyond.
Indeed, AT&T still has a big job ahead of it in making users and potential ISP and ASP customers believe that it really, really cares about the IP world -- and we'll be keeping close tabs on them throughout the year.
This story, "More juice for hosting and collocation" was originally published by Network World.