Verizon Financial Network offers low-latency links from New York to Chicago

Verizon Enterprise Solutions, a unit of Verizon Communications Inc. (NYSE, NASDAQ: VZ), has jumped into the low-latency network services game. The company now offers financial firms low-latency services among six data centers in New York/New Jersey and Chicago on its Verizon Financial Network (VFN). Round-trip latency on the link between the Chicago Mercantile Exchange data center on Cermak Road in Chicago and the data center in Cartaret, NJ, is as low as 14.5 ms, Verizon asserts.

Of the six data centers, two are in Chicago – the one on Cermak Road and the Chicago Mercantile Exchange’s site at DC3 in Aurora, IL. The remaining four are in the New York metro area, including Carteret, Halsey Street in Newark, Secaucus, NJ, and Hudson Street in New York City. Verizon Enterprise will offer Layer 2 services that Product Manager Dr. Jim Anderson told Lightwave yesterday will pair robust service-level agreements (SLAs) with round-the-clock oversight from the VFN network operations center. The ability for customers to monitor latency performance themselves will be available in the third quarter of this year, he added.

Verizon Enterprise will offer services at data rates of 1, 2, 3, 4, and 10 Gbps, Anderson said. As a matter of corporate policy Verizon quotes turn-up times of 90 days, but Anderson expressed confidence that the typical connection would require no more than half that time.

The service is something of a happy accident, Anderson admitted. While some carriers have built entirely new infrastructures designed with low latency in mind (see, for example, “Spread Networks to debut low latency New York to Chicago dark fiber route”), Verizon’s service leverages infrastructure it acquired from Alltel in 2008. The infrastructure originally offered latency of around 23 or 24 ms. However, after upgrading the links with 6500 Packet Optical Platforms from Ciena Corp. (NASDAQ: CIEN) – the same platforms Verizon uses to support 100-Gbps transmission – the latency figures on the routes dropped by almost 40 percent.

In a blog posted on the company's website today, Ciena asserts the drop in latency derived from the fact that the coherent technology in the 6500 removes the need for latency-inducing dispersion compensation modules.

Anderson said that Verizon Enterprise realizes it is not the first to market on the New York to Chicago route. However, the company thinks it has a story to tell financial firms with low-latency IRUs in place. The fact that the VFN links offers route diversity of at least 50 ft from those of Verizon’s competitors should appeal to customers looking for a backup for their current services, Anderson said. For low-latency newcomers, Anderson asserted that the 14.5-ms figure between Cermak and Carteret is the lowest on the market, while the latency among the other routes is “in the neighborhood” of Verizon Enterprises’ competitors.

Verizon announced it already has a customer for the new services. CME Group will use the low-latency links in its Aurora, IL, data and colocation center. Anderson hinted that other customers also have signed on.

Anderson says that Verizon plans to offer low-latency services on other parts of its global network, with a route or two in Europe the most likely candidate in the near term. Verizon is already using the 6500 platforms to link Paris and Frankfurt at 100 Gbps; sources at the company have discussed similar plans for London.