Internet service provider PSINet Inc has decided that it is going to continue to offer free peering – network traffic exchange – to small internet service providers facing the squeeze from larger ISPs charging for peering arrangements. PSINet which has failed to make a profit in four of the last five years, is looking for a strategy to bolster its revenues. It hopes that by signing a number of small service providers it can also sell them its wholesale internet services. PSINet claims to have no problem with network bandwidth, as it bought a 20-year lease on a US network of 10,000 miles of fast OC48, 2.4Gbps fiber optic cable from IXC Communications Inc back in July, in exchange for a 20% stake. The first section, running at OC12 speeds of 622Mbps, is due to start operating early next year, although the full OC48 will not be fully operational until 2001. It should bring the price of internet access for service providers down. PSINet says it believes that having a large number of peering partners means that its customers are better served, because traffic is transferred faster between peers than over the internet. Worldcom Inc’s UUNet Technologies subsidiary is the only company that has so far declared it would be revoking traditionally offered peering arrangements to small and mid-range service providers (CI No 3,160), but it’s a trend that’s expected to spread as the internet moves towards services run on a more solidly commercial basis.
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