Enron Collapse Took The Energy Out Of Bandwidth Trading Fledgling Concept On Hold But observers do expect a return at some point in trading of Net capacity.(INTERNET & TECHNOLOGY)

Byline: ANTONIO A. PRADO

The recent collapse of Enron Corp. has cast a dark cloud over what some say was an already dour market for bandwidth trading.

But backers of trading Internet traffic capacity as a commodity aren't ready to throw in the towel.

Enron Broadband Services, a 4-year-old unit of the fallen energy giant, ran the largest exchange in the nascent bandwidth trading market. On Jan. 14, the U.S. Bankruptcy Court for the Southern District of New York cleared the way for dismantling the unit and distribution of its assets.

"Enron's fall from grace will dent confidence in bandwidth trading," said Stephen Young, an analyst at Ovum, a London-based research firm. "But there's still compelling economic logic behind the bandwidth trading model that Enron helped to pioneer."

The idea is that bandwidth capacity -- the rate at which data can be transmitted -- can be traded as a commodity, much like the way oil, natural gas and electricity are bought and sold.

For instance, a telecom carrier with surplus capacity could lease its excess bandwidth to a carrier that needed more capacity to meet its demands. Or an Internet service provider could resell some of the bandwidth it had rights to but didn't need in the near term.