Level 3 Lowers London–Frankfurt Latency

Fiber network provider Level 3 Communications has reduced the roundtrip delay on its ultra-low-latency route between London and Frankfurt, to provide high-frequency traders with faster connectivity to key trading venues in the cities—including the London Stock Exchange and Deutsche Börse—by creating a more direct route between the two European financial centers.

The telecoms provider declines to disclose exact latency metrics to avoid setting a target for competitors, though officials say it has shaved a significant amount of time off the network link. “We tend not to publish our numbers but we are talking milliseconds, not microseconds, off our previous best time,” says Ashley Atkins, director of European business development at Level 3.

Atkins says securing the most direct fiber routes is a key way to improve latency between two locations, since “every 100 meters we can save in terms of fiber distance shaves off 1 microsecond in terms of latency.” As a result, Level 3 has been identifying fiber partners in regions across its network, in an effort to reduce the distance between its gateway sites in key financial centers by optimizing every link on the routes between them, in response to demand primarily from the high frequency trading community.

“High-frequency traders are prepared to pay a premium for the lowest-latency route,” Atkins says. However, he warns that at some point, a level playing field will emerge in terms of latency for individual routes, which will require trading firms to differentiate themselves based on their trading platforms and algorithms, rather than their choice of network provider

When that time comes, Atkins says the breadth of a vendor’s network will determine the strength of its position, which is why Level 3 also plans to improve most of its other routes across Europe, including its ultra-low-latency routes from its key network end-points to Zurich and Milan.