Barksdales Build Short Trading Route Between NY, Chicago
July 9, 2010
A Mississippi startup has “trenched” a complete new fiber route designed to shave millionths of a second off communications between trading centers in New York and Chicago.
The startup, Spread Networks, is headed by David Barksdale, a former lawyer with the New York office of Cleary, Gottlieb, Steen and Hamilton who specialized in private equity and mergers and acquisition. He was not available Friday afternoon for coment.
The chairman of Spread is his father, James Barksdale, most famous as the former chief executive officer of the Netscape Communications Corporation, when its browser was preeminent on the Web.
Spread's 825-mile direct route avoids the use of existing railroad routes or other diversions.
The elder Barksdale also was the first chief executive of AT&T Wireless, when cellular telephone services were launched in the United States.
Spread has “built from the ground up” its own fiber route from Chicago to New York, according to its Web site. The 825-mile route is advertised as taking only 13.33 thousandths of a second to execute a roundtrip communication.
The company asserts it using numerous “clean speed” technologies to achieve this. Among the keys: Owning a private network that does not use routers or switches to pass traffic along and “almost unlimited bandwidth” in that network.
The “maximum total drag,” or friction in its system, Spread says, is less than 30 millionths of a second.
This is designed to allow securities firms to “run at the fastest possible speed on the shortest possible route,’’ it says.
The funding and total cost of the construction has not been disclosed. But the company has given the Securities and Exchange Commission notice that it planned or plans to raise $75 million, through a debt offering.
And, at June’s Securities Industry and Financial Markets Association Technology Expo in New York, a technology partner, Infinera, said it would supply “ultrafast transponders,” optical amplifiers, a new form of light dispersion compensation that could save a millisecond in transit time and other network equipment that reduces delays.
Also on the Spread Networks management team are founder Dan Spivey, a derivatives strategist who saw “pentup demand” for cutting delay between the two trading centers; Murray White, former senior vice president of the NYSE Technologies division of NYSE Euronext; W. Brennan Carley, former head of technology at Instinet and former head of business operations at NYFIX; Timothy L. Goff, an expert in wave-division multiplexing communications networks; and, Michael Strickland, one of the original architects of the Level 3 Communications long-haul fiber network.
