Data hub aims to unclog Latin American jam

From...

By Daniel Helft

(IDG) -- Latin America's fast-growing information industries received a major boost Saturday, when a new hub to handle the region's data traffic opened in Miami.

Lacking good pipelines between the countries of the region, Latin American Net traffic is typically routed through one of four Tier1 Network Access Points (NAPs) in the U.S., located in San Francisco, Chicago, New York or Washington, D.C. That makes data transfers slow, unreliable and expensive, as packets of information have to pass through many carriers, increasing the likelihood that they will be slowed down by bottlenecks and traffic jams.

The new Miami hub, a seven-story, hurricane-proof structure dubbed "The Nap of the Americas," directly links to the region's fiber-optic networks and rapidly speed up data traffic. The $200 million project is the baby of Terremark Worldwide, which is backed by a consortium of 110 telecom companies.

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"There is no way to overestimate the impact this will have for the traffic of data between both regions," said Sue Uglow, telecom analyst at London-based Ovum consultancy.

Latin America, with 400 million inhabitants, is a market with enormous potential for Internet businesses. Jupiter Communications recently estimated that there will be more than 80 million Latin American Internet users by 2005. The U.S. has 35 million Spanish-speaking Internet users.

But crucial to the growth of Latin America's Internet industry is the lowering of telecommunications costs.

"Currently, the price of content distribution is prohibitively high," Uglow said.

Of course, location is everything. The Nap lies close to the ocean, where Latin America's undersea fiber-optic rings hit the mainland. The new hub can process and transport data to and from Latin America before the information gets caught in the permanent U.S. data-traffic jam. Miami business leaders hope that tech companies would now have an added incentive to locate operations in Florida, while distributors of content would see a reduction in communications costs.

Still, if the hub is so important to Latin America, shouldn't it be based in the region? "One would only hope that someone rich and smart would decide to locate a similar venture in Latin America," Uglow said. For the moment, Miami, the so-called capital of Latin America, will have to do.