Communications

Latin CEO: Executive Strategies for the Americas, August-Sept, 2002

Miami has long acted as the Latin American headquarters for multinational telecom companies, ranging from Lucent Technologies to Telefonica. In recent years, it has also grown into one of the most important data transmission hubs - not just in the Hemisphere, but in the world.

The building which houses the Network Access Point (NAP) of the Americas is not extraordinary looking. It is a mostly windowless, pastel-colored six-story structure. But it occupies an entire square block on the edge of downtown Miami, and within its walls lie the guts of the information revolution. Here, some 69 telecom firms and carriers of Internet data connect, routing digital traffic between the Americas, the Caribbean and Europe.

"The NAP of the Americas is a unique asset that further solidifies Florida's position as the gateway to Latin America," says Florida Governor Jeb Bush. "As the Internet continues to become the backbone of the international economy Florida's natural geography and IT infrastructure has given us the opportunity to be the high-tech link between the United States, our neighbors to the South, Europe and the rest of the world."

Indeed, as fiber optic cables, data centers, and high-speed Internet access reshape traditional "trade routes," South Florida is becoming one of the world's most important information crossroads. With the creation of the NAP of the Americas in Miami, the "landing" of international undersea cables, multiple power grids, and other telecom infrastructure investment, South Florida is now the dominant connecting point to the Caribbean and Latin America. According to research group Americas Networks, Miami is now the fifth most important telecom/Internet fiber-optic hub in the world, ahead of cities such as Washington, D.C. and San Francisco.

Underlying Miami's importance in global communications is the rapid evolution of the Internet in Latin America. For years the region has been the fastest growing Internet market in the world, climbing from 1 million users in 1996 to 12.8 million users last year, according to Pegasus Research International. Now Latin America is becoming more sophisticated in its use of the Web, developing more complex, transaction-enabled sites. Market research firm International Data Corp. predicts that e-commerce in Latin America will grow from US$1 billion in 2000 to US$8 billion by year-end 2003, when more than 20 million Latin Americans will regularly use the Internet. Merrill Lynch predicts revenues of US$1.3 billion by 2005 in the Web hosting business in Latin America.

The importance of Miami to the trans-Latin data industry is critical. About 30 percent of data traffic generated in Latin America is directed at the US, according to Pyramid Research, and the majority of that Internet traffic flows through the Miami metropolitan area. It moves through the "pipes" of one of South Florida's many telecom providers, such as Telefonica Data USA, which last year opened its Miami KeyCenter as a hub for data traffic from Latin America.

"This data center here is a gateway to communications in three continents," says Pete Pizarro, general manager for the Miami-based subsidiary of the global Spanish company Telefonica S.A. Telefonica Data's global network carries 80 percent of the world's Spanish language Internet content.

The Miami KeyCenter hosts corporate servers, provides data backup for businesses, and supports virtual private networks for secure data access. "Using our global IP network and Emergia, our 16,000-mile undersea fiber-optic ring, the KeyCenter is linked to our other data centers, providing unique seamless services across multiple geographies," Pizarro says.

BellSouth has also invested heavily in fiber optic loops and broadband services throughout Greater Miami. The telecom provider operates a high-speed regional Internet exchange that speeds traffic between Latin America, Miami and the rest of the nation.

But undoubtedly the most significant player on South Florida's telecom scene is Terremark, whose NAP of the Americas is the fifth Tier-1 Network Access Point in the world. Housed in the Technology Center of the Americas (TECOTA), its low-profile telecommunications fortress in downtown Miami, the NAP of the Americas provides customers such as Sprint, BellSouth and EPIK Communications with connectivity, co-location, managed services and uninterrupted, secure power.

"Terremark is proud to play a part in building Florida into a technological world capital," says Manuel D. Medina, CEO and chairman of Terremark Worldwide, which is developing other NAPs in Latin America and Europe. "AS we continue our expansion plans to key Internet hub cities around the world, the NAP of the Americas in Miami remains the prime catalyst and the model for Terremark's growth and development."

Terremark's first such deployment is the NAP do Brasil, located in Sao Paulo, where Terremark Latin America Ltda, operates and manages the PIT (Ponto de Troca de Trafego) together with FAPESP, the State of Sao Paulo's official governmental research and educational foundation. In addition, Terremark also has an exclusive agreement to develop and operate a network access point in Madrid (NAP de Madrid) and, potentially, other TerreNAP Data Centers throughout Spain.