AI Agent Hunter: Why was creating neutral interconnection spaces so revolutionary?
Hunter: Neutrality was a game-changer. In the early days of the Internet, interconnection was controlled by a few powerful players. If you wanted to connect your network, you had to do it on their terms. It was expensive, slow, and designed to benefit them—not you. The necessity of neutrality gave rise to it and it changed everything. By establishing a physical place where all networks were welcomed and could request direct interconnection between each other, it created a level playing field, encouraged competition, and significantly reduced costs. That shift was profound because innovation in technology is directly tied to both cost and the physical ability to deliver services.
The Problem with the Past
AI Agent Hunter: What was the interconnection landscape like before neutrality?
Hunter: Imagine you’re a small network operator, and you want to connect with a larger network. Back then, you’d need to go through the incumbent carrier. That meant relying on a local carrier connection, or circuit, called the “local loop,” a circuit they controlled entirely. Getting a connection wasn’t just expensive—it could take months. By the time it was operational, your market might have shifted, or your needs might have changed. It was frustrating and inefficient.
Adding to the frustration, incumbent carriers often restricted what you could do with their real estate facilities called “central offices”. For example, you couldn’t use their real estate infrastructure to directly connect your network with other 3rd party networks in the incumbent’s building, even if it would improve performance or reduce costs. The lack of neutral, physical real estate resulted in the protection of incumbents control and did not allow for collaboration or innovation.
The reason was simple. Before the Consent Decree in 1984, that “broke up” the AT&T monopoly over long distance telecommunications in the U.S. and created the 7 “Baby Bells”, and then the 1996 Telecom Act, which introduced deregulation in long distance telecom, there was no need for neutral telecom real estate. The telephone companies had their own real estate facilities, called the Central Office, and there was no other network needing to interconnect to the incumbent. Once these legal actions were taken the incumbent networks were deemed “open”. This was in fact only the case on paper and not in physical reality. Just because these documents were signed did not mean that the physical real estate facilities that would be required to house all of the equipment of the competitive networks that were now legally allowed to operate, existed. It all needed to be built.
Of course, the competitive networks did not plan for that. They had not accounted for the time, resources and expense of having to build their own real estate to house their own equipment. This also left the other small detail of needing to be interconnected to the incumbent network, something that was decreed, but not clearly defined as to how it actually was supposed to happen. That critical piece was silent.
The lack of any clarity on these very critical, physical components of deregulation and true competitive telecommunications is what gave rise to the Carrier Hotels. These were buildings where the first competitive networks went to find a home. Typically it was a building directly next to, physically connected to via some conduit system, or physically proximate to the incumbent Central Office. The desire for the reduction of physical distance from a “neutral” building to the incumbent building was all to cut down on cost and time as the burden was on the competitive networks to find a way to get into the incumbent networks’ building in order to get connected.
As competitive networks moved into these nearby buildings, the buildings, known by their address amongst the competitive network operators, began to attract more competitive networks. The next one in would follow the same path that the prior one took to get into the incumbent building to get connected. Like following a well-worn path through the woods. Follow the leader and stick with what works. Networks go to where networks already are. Critical mass begets critical mass!
Ultimately the competitive networks became successful in their own right and there became a need for them to connect to each other within the neutral building. This gave rise to networks running cables within the building’s existing pathways. Whether they were officially designed, planned and approved by the building owner was another matter. Most of this originally happened without the owner's knowledge. Typically asking for forgiveness, not permission, was the unwritten rule then.
Across the U.S., and in many countries that experienced telecom deregulation, a similar scenario unfolded. Across the world, the original, dominant, non-incumbent carrier owned network interconnection facilities were buildings that were not built to do what they ultimately became known and vitally important for. None of them were planned, designed, or decreed. They just happened. Many were office buildings, former department stores, or former Western Union buildings.
As time passed, the need to interconnect within these buildings between rooms and floors, the basement, the roof and the fiber systems in the street outside increased. The need for more power, floor loading, chilled water for cooling systems, loading dock access, shipping and receiving, building security and more all increased. The building ownership and management of most of the buildings, with certain exceptions, were either unaware, or unable to keep up with the proper administration of the network tenant requirements.
There was a gap in many of the buildings where the need for a neutral, non-carrier owned room needed to be created, officially, but the landlords, lacking knowledge and therefore confidence in making the necessary investment, simply did not address the need. They continued to allow cables to be run directly between tenants’ suites. Some of the tenants offered colocation space, or space where other networks would “co-locate” their equipment, within their own suite, but they were not primarily, or solely in the business of providing neutral colocation for other networks. The need for space and power for network equipment in order to provide interconnection back to it was typically offered as an ancillary service to a network service sold to the other network.
There was no standard. Contracts terms, pricing, rules, procedures, etc were all different. Above all, the facilities were not truly “neutral”. There were limitations on third party networks being able to interconnect to any other network they need, or wanted to connect to if that network was colocated within another carrier’s facility that was deemed a “competitor”. It was very subjective and inhibited scale.
This gave rise to the carrier-neutral Meet-Me Room.
The Vision for Neutrality
AI Agent Hunter: How did you envision a better system?
Hunter: My vision was simple: create a space where any network could connect directly with any other, upon request, quickly, cost-effectively, efficiently, and without interference. This required a new approach to interconnection infrastructure: a carrier-neutral Meet-Me Room. Neutrality wasn’t just about the physical space. It was a philosophy and about trust. It required the facility owner to remain impartial, focused solely on providing the infrastructure. No favoritism. No competition with the networks themselves. Neutrality builds trust, and trust is the foundation of any thriving interconnection ecosystem.
The Birth of Telx and the Meet-Me Room
AI Agent Hunter: Can you tell us about creating your first carrier-neutral Meet-Me Room?
Hunter: The first neutral interconnection facility that I was a part of creating was telx at 60 Hudson Street in New York. At the time, 60 Hudson was already a hub for telecom networks, but there wasn’t a centralized, neutral space for physical interconnection. Carrier Hotels, like 60 Hudson, had varying methods of in-building interconnections.
A common process at the time was to use “Local Loops”. This was the primary method of how “long distance” networks, known as Interexchange Carriers (IXC’s) used Competitive Local Exchange Carriers (CLEC’s) in cities to connect to each other and business customers. The CLECs sold “local loops”, an optical, or electrical circuit that carried voice, or data traffic on a protected path, visualized as a loop, or circle. If one side got cut the other side would provide instant restoration. The CLEC’s charged for these local loops on a monthly recurring basis, based on the circuit size, which was determined based upon the number of channels it could carry for voice, or the total amount of data capacity it could carry. Back then, data was mostly still Frame Relay, or Asynchronous Transfer Mode. This time frame pre-dated Ethernet and Internet Protocol as the dominant data protocols. In 60 Hudson Street this happened within the building, between floors and even between networks in two different rooms on the same floor, but routed through a CLEC that was on a different floor, which was extremely inefficient and costly.
Local Loops between two buildings within a city seemed reasonable to have to wait weeks and months for to be provisioned and to have to pay expensive monthly recurring fees for, but the need to connect within a single building started to expose the need for a different solution. Also, the concept of a local “lit” optical circuit to connect to and between two IXCs within a building did not require a “middle-man” network to generate the light because the distance between two floors in the same building was well within the distance limits of non-regenerated light, typically under 60 miles depending on the optical lasers being used. That meant the interconnection could be done directly. This was the basis of the technical, financial, and business premise of the cross-connect.
At telx, we were originally a Licensed 214 Carrier ourselves. That is in reference to Section 214 of the FCC Telecommunications Act of 1996. We bought and sold international, wholesale voice minutes to support our pre-paid calling card platform business. Those were interesting days in 1998-99 New York City, worthy of their own book, but alas that history is not the focus of this story. The “minutes business” was a catalyst for the neutral interconnection business though.
We bought and sold so many minutes that we became the largest wholesale voice customer of a major carrier in the US, Qwest. We needed to turn up several DS-3 circuits with Qwest every month just to keep up with our demand, but we could not get the capacity fast enough. The reason for the delay was the local loop. The telx facility and switches were located in our suite on the 23rd floor. Qwest’s long distance voice switches were on the 20th floor. The CLEC we were using to get connected between our voice switches was on the 3rd floor. The local loop transport circuits routed from 23 to 3 to 20, it took weeks to months to get one circuit turned up from the CLEC and when it was delivered we had to pay monthly for it.
This did not sit well with me. There had to be a better way. I thought, what if Qwest built directly in to our space? We could cut out the CLEC and save the time and cost. It would also improve the quality by eliminating a point of failure and the inevitable finger-pointing when something did go wrong, which it often did. Win-win! Now i just needed to convince them of it.
Myself and a telx colleague went to visit Qwest in Dublin, Ohio one day to plead our case. They had a big team of network engineers and planners in the room. We spent hours whiteboarding the “direct interconnection process” explaining how Qwest, at its own expense, would build a 4” conduit from their suite on 20 to ours on 23 and then pull fiber in that conduit, terminate it to a fiber distribution panel in our space and then connect to a multiplexer, which is a piece of optical equipment that generates the local circuit to connect their switch to ours so that we no longer needed to wait for the CLEC.
We received stares, disbelief and outright denial that it would, or could work. Not wanting to leave without a yes, I needed a different way to present it. A non-engineering way. So, I said, “How would you like your 4th Quarter of this year to look better than your 1st Quarter of next year?”. There was a moment of silence. Then, the one finance guy that they had in the room, who we found out was hired about two weeks before the meeting and sent to sit in just because we were their largest wholesale voice customer, said, “I do not know what this guy has been talking about, but I want you to do it.” So then, the network engineers said, “Oh, ok. We were just waiting for someone to tell us we had to.” It was at that moment I learned a lot about this business. It is driven by revenue, it is influenced by time to revenue and the network planners do what the finance people say that they can do. The return on investment was baked in. We were already paying them. They could afford to invest the capital and it would mean they would recognize more revenue and sooner. No brainer.
I went back to New York thinking about this. I realized that all carriers in 60 Hudson had the same problem. No one could easily, quickly, predictably and cost-effectively get connected. I figured that being the physical place where networks would go to within 60 Hudson Street, not to necessarily put all of their network equipment, but just a physical network extension, a demarcation point for interconnection, would be a good business. Not just hosting racks of equipment, or generic colocation, but the specific intention of organizing every network in the building down to each having their own individual “patch panels” and to inventory each, know where they all are, whose panel it is, how many ports are in use and available and of those in use who they were connected to. To create an inventory of every port on every panel and keep it current so that each network could place orders to cross-connect to another network as they executed business transactions out in their own sales worlds and then just call us for when they needed to physically consummate the transaction and begin to pass traffic. We could add technical support for testing and turn-up of new connections and be on-call for trouble-shooting when there were issues, 24x7. It was a radical new concept. It needed everything, a name, product names, a defined process, customer agreements, service orders, pricing, rules, policies, procedures, etc. So, I sat down and mapped it out.
We transformed a section of our space at 60 Hudson into a neutral meet point. It was a dedicated space where networks could physically connect to each other using direct physical connections that we called cross-connects. This eliminated the need for local loops, saving time and money. It also made the process transparent and balanced. If both parties had a physical presence in our room we would interconnect them directly at no additional monthly cost. The cross-connect was billed as a non-recurring, one-time fee, for labor and materials.
Upon seeing the success of the financial presentation of the direct interconnection business I realized that I could do the same with other carriers. I began to explain to other networks in 60 Hudson that we bought and sold minutes with the benefits of building directly into our space. Leveraging the buying power of the minutes business helped to seed more carriers to build into the meet-point and I would then actively tell them that they could directly interconnect to each other in my space at no additional monthly cost and they could eliminate monthly local loop fees that they were current paying to connect to each other within the building and avoid all future monthly local loop expenses.
The neutral interconnection real estate business worked like a charm. It was high margin, recurring revenue, very sticky and no one ever really left. As a matter of fact, as each new network came in we would ask them who else they needed to connect to in the building and they would tell us. We would then contact those networks are let them know they had a customer waiting in our room which would lead to our next interconnection customer. Eventually we decided to get out of the switched minutes business and focus solely on solving the physical layer interconnection problems within 60 Hudson.
This meet-point concept became the cornerstone of telx. I studied the long haul fiber route maps of the carriers of that time and noticed something. A pattern. They all left 60 Hudson in New York and went North, South and West to different cities via different routes, but when they arrived at the next major city, they all converged on the same building again. I began to realize that if all carriers share the same issues in one building in one city then it was probably the same in other cities in the same type of building and now I had a map with the addresses of those buildings in every major city in the U.S.
Telx was a leasehold tenant at 60 Hudson. We didn’t own the building, so I learned what it was like to be a tenant. I knew what it was like to need things that were not spelled out in the lease and the unknown time and cost to secure these things from the landlord. I also knew that there were dozens of networks coming from Europe and Latin America to New York that needed to get connected to each other and did not know what to do, who to go to, or who they could trust. Most of them only needed a small amount of space and power, but a lot of disparate interconnections. The owner of the building only wanted to lease full floors, rooms and suites. These networks only needed 100 square feet, or less. They were very valuable to me.
So, I learned to appreciate what owning the building meant to me, to them, for control and for equity value. Owning and controlling the building meant I never had to ask permission, that was number one. If what a network customer asked for made network sense and was Network Equipment - Building System (NEBS) and Occupational Safety and Health Administration (OSHA) compliant, I would say yes and then just think up a price. We would be able to make decisions quickly and get customers turned up fast. That equates to time to revenue. Also, the business margins would improve if we didn’t have any rent expense. It was difficult in those days for us to raise capital, another subject worthy of its own book, but I thought, if we could buy the building we could probably get a conventional mortgage from a lender that would not need to really understand what it is that we do, which I always tried very hard to explain with analogies and a pleasant demeanor, but still couldn’t get passed committee approvals. All of this and more proved to be true.
So, I decided my strategy would be to acquire all of the buildings on my map and build a National Standard for Meet-Me Rooms in the U.S. I contemplated this and thought the best way to go about it would be to get to know the owners of the buildings and, or the largest neutral colocation operator tenant in the building, if there was one. If I called them up as Hunter, a guy from New York in a “competing” business, they would hang up on me, so I came up with an idea. I would become an industry journalist. I would call the owners up and tell them I wanted to write an article about their building, or facility and instead of hanging up on me, they would tell me everything. This would be the preemptive due diligence for my National roll-up strategy and it has worked out for me over the past 20 years incredibly well.
I started by writing a four-part series from May to October 2002 for Capacity Magazine, based in London, England. The series was called the “Nexus Series”. In it I defined what Meet-Me Rooms were and I finished the series with “The Ten Commandments of Interconnection”.
The following section includes re-prints of the original Nexus Series articles.
