In the beginning telecom firms who owned the fiber optic networks didn't like the idea of selling their services as a commodity. Some made the case that not all networks perform equally well. In addition, most preferred to negotiate prices with customers, rather than be stuck with a one-size-fits-all pricing scheme.

"Carriers have never been big fans of bandwidth trading, because honestly, "They want customers to be confused about pricing."

There's just too much capacity out there and too little demand." On average prices for bandwidth have declined between 30 and 50 percent in the last 18 months. On certain key routes, the freefall is more pronounced. According to RateXchange's Samuels, for example, the price of a standard contract for carrying data traffic between New York and London has declined from $30,000 to $5,000 over the past nine months.

Bandwidth sellers also fear they may have much to lose by dumping excess capacity at bargain prices on an open exchange. One concern is that customers who paid more for the same contract when prices were higher may come back demanding discounts.

Admittedly few ISPs and telecom firms want to use a commodity-style exchange to sell contracts. Deals tend to be negotiated over the phone, often with a broker who gets a fee for arranging the transaction.

Eventually bandwidth will be sold through a commodity-type market, it won't happen overnight. Latest estimates are that it will take three to five years to develop a healthy and viable business for trading bandwidth contracts.