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Codetel: Big break for Internet surfers
The Miami Herald / July 22, 1997

By Larry Luxner

WASHINGTON -- Seven years ago, no one in Latin America ever heard of the Internet. Today, well over a million Latins surf the Net regularly, with the number of residential and business connections skyrocketing in the region's most important markets: Brazil, Mexico, Argentina and Chile.

Yet at the moment, nearly all Internet traffic in Latin America -- including traffic between neighboring countries -- must be routed through a Network Access Point (NAP) in Virginia because the region has never had its own NAP. Not only does that slow transmission times, it also makes Internet access extremely costly. In Brazil, for instance, long-distance monopoly Embratel charges a monthly $48 fee for 15 hours of usage, plus $3 per additional hour of on-line time (compared to an average $9.95 a month in the United States).

By early July, however, that'll begin changing with the inauguration of Latin America's first NAP in the Dominican Republic. Known as the Latin Internet Exchange (LIX), this facility is located in Santo Domingo, the Dominican capital.

"If you're in Venezuela and want to access an Argentine Web site, you have to do it through the United States. Now we'll be able to keep traffic within the region, allowing faster access at lower cost," says Sandy Fitchet, vice-president of marketing at Washington-based CAIS Internet, one of two partners in the LIX alliance. The other partner is GTE Codetel, the Dominican Republic's $600 million telephone monopoly, which handles 97% of the nation's local phone traffic.

Housed in a Codetel building along Santo Domingo's Avenida 27 de Febrero, the LIX will be one of only 10 or 15 such Network Access Points in the world -- the others being in the United States, Europe and Asia. In fact, LIX will be the Latin American equivalent of MAE-East and MAE-West (located in suburban Washington, D.C., and San Jose, Calif.), which together handle about 75% of Internet traffic worldwide.

"Codetel is providing the facility, but the owner of the LIX will be all the companies that choose to locate there," says Fitchet. "In effect, all the telcos will have an interest in this."

Ed Serpe, director of the Internet Business Group at Codetel, says the Dominican Republic was the logical choice for a Latin American NAP, since that country already generates a high volume of telephone traffic to and from the United States because of the large Dominican immigrant community in New York. In 1995, the country recorded 453 million minutes of inbound and outbound traffic with the U.S., ranking it 7th worldwide.

"We have the corresponding modern digital facilities to support that level of traffic," says Serpe, adding that Codetel is investing $6 million this year in its domestic and overseas Internet infrastructure.

"At the heart of the exchange, we have a DEC GIGAswitch to send and receive data arriving via multiple, high-speed submarine fiberoptic cables and three Intelsat satellites," he explained. "The medium to long-term strategic advantage of this arrangement is to be able to freely exchange Internet traffic amongst Network Access Point members."

The short-term benefit, say observers, is economic -- a factor that'll become more and more important as Internet use surges throughout the region. Currently, Brazil has the third highest number of Internet domains in the Western Hemisphere, with a growth rate of 284% from January 1996 to January 1997, followed by Mexico, with a 116% growth rate. Host growth is also on the rise. Between July 1995 and July 1996, the number of Brazilian hosts jumped 291%, while in Mexico it soared by 150%, in Argentina by 125% and in Chile by 71%.

"Latin America is very much in need of improvements to the Internet infrastructure," says Sonia Ortiz, product manager for AT&T Worldnet Services in Puerto Rico. "This is a very good venture, and if everybody pools their resources, we can make it even better."

Anibal Rodriguez, president of Abalon Corp. in San Juan, says that within a year, about 50% of Puerto Rico's Internet traffic will go through Santo Domingo.

"We're currently paying $12,000 a month for [access] to the United States," says Rodriguez, whose company hosts 98 Internet business domains. "In the Dominican Republic, it would cost $4,000 to $6,000. You'd have to be nuts not to go through there."

The LIX itself will be staffed by no more than 15 Codetel employees and monitored by a 2,400-square-foot Network Operations Center. It'll house four projection screens; a live camera will also be set up to view the site from the Web, so customers can show the facility to clients as a marketing tool.

The CAIS-Codetel team is currently negotiating with Microsoft and the Lycos and Alta Vista search engines to enrich LIX content with very fast access, and has begun seeking commitments from hundreds of regional Internet service providers across Latin America and the Caribbean to connect to the new facility.

Says Ernst Burri, president of GTE Codetel: "The Latin Internet Exchange will dramatically improve how Internet traffic is handled in this fast-growing sector of the world. Most importantly, the LIX will improve service for Latin customers, lower costs for Internet service and content providers, and create new growth opportunities for regional businesses."

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