Fixnetix to Offer Microwave London–Frankfurt Data via Custom Connect 

Author: Max Bowie
Source: Inside Market Data | 21 Jan 2013 

UK-based low-latency data and trading infrastructure provider Fixnetix is to offer clients of its managed market data services and hardware-accelerated risk management services access to an ultra-low-latency microwave network for data transmission between London and Frankfurt being built by Custom Connect, a Netherlands-based specialist designer and builder of custom fiber networks for clients.

Designed to provide European derivatives traders with ultra-low-latency data connectivity between NYSE Euronext’s Liffe derivatives market in the exchange’s Basildon, UK datacenter and the co-location site for Deutsche Börse’s Eurex futures market at Equinix’s FR2 IBX datacenter in Frankfurt, the microwave link will provide one-way latency of 2.375 milliseconds and roundtrip times of 4.7 milliseconds, compared to the fastest fiber routes currently available of just under 8.3 milliseconds, says Olav van Doorn, executive director and co-founder of Custom Connect and its microwave-dedicated spinoff Custom Connect MW.

Van Doorn says the vendor is currently finalizing the installation of microwave antennae on 12 telecom masts with line-of-sight to one another—but never more than 95 kilometers apart to ensure the signal remains strong—along the route between Basildon and Frankfurt, which should be ready to go live in a matter of days.

Fixnetix chairman and chief executive Hugh Hughes says the vendor has already signed up a major investment bank and major hedge fund for its new microwave connectivity option. “The driver is that this is faster than underground cable, and just as reliable, because you don’t have to worry about having to dig it up, or about interruptions when a ship snags an undersea cable…. And it’s very quick to connect to—a firm can be up and running within a couple of days,” Hughes says.

However, the process of designing the network was not so quick: Van Doorn says he began investigating microwave technologies two years ago after interest from firms in Chicago, and found that microwaves could enable reductions in latency of almost 40 percent. After initially trying to persuade US firms to support construction of a London-Frankfurt network, but finding that microwave frequencies and regulations both differ between the US and Europe, van Doorn decided to focus on finding European partners to support the Basildon-Frankfurt link.

Custom Connect finished the plan for which routes it would use to create the link around May last year—leveraging its database of network connectivity points across Europe to identify the shortest routes, which numbers 1,300 fiber carriers, and details of mobile masts, including some 30,000 in Germany alone—and began building it in August. And while it only takes three days to build antennae on each telecoms mast along the route, applying for frequencies from domestic governments and signing agreements with the owners of cell towers can take considerably longer, van Doorn adds.

After receiving interest from European network carriers seeking to augment their fiber networks with microwave capabilities, the vendor teamed with Colt Telecom and its MarketPrizm financial infrastructure subsidiary, which announced its ability to offer microwave connectivity as a result in November, and is the exclusive network provider reseller of bandwidth on Custom Connect’s network, while Fixnetix—which approached the vendor about two months ago, initially about how Custom Connect could help Fixnetix update its fiber connections by identifying the fastest routes—is the exclusive reseller among managed service providers.

Hughes says he was initially skeptical about using microwaves to run a market data network, but that early feedback to the suggestion was overwhelmingly positive. “It’s another way firms can get an extra edge over their competition,” he says.

But with limited bandwidth available over microwave frequencies compared to fiber—specifically, the vendor sells increments of 10 Megabits per second, with only a total of 200 Mbps available, meaning that client firms cannot subscribe to full exchange feeds, and must be selective about the amount of data they use the network to receive—van Doorn says it is important to ensure no clients are disadvantaged by another taking up too much bandwidth. So the vendor rigorously polices traffic using hardware-accelerated data capture technology from French vendor Enyx, which it also uses to arbitrate between dual data streams while crossing the ocean between the UK and Europe. As a result of the stricter bandwidth availability, microwave won’t replace fiber anytime soon, he adds.