Failure of merger talks between two high-speed Internet networks will mean higher long-term access costs for users in North Carolina, according to Joe Freddoso, the new chief executive officer at MCNC.

Executives at Internet 2 and the National LambdaRail confirmed this week that the two organizations had failed to reach a merger agreement.

MCNC is a so-called peering point for both networks. Researchers across the state use I2 and the NLR for a variety of projects.

MCNC, on behalf of the North Carolina customers it serves such as the University of North Carolina system, had called for the merger to take place, Freddoso said. MCNC operates the North Carolina Research and Education Network which spans the state linking schools, universities and other institutions and also ties in to the high-speed backbones.

“Yes, the NCREN community is disappointed the merger was not consummated,” Freddoso told WRAL Local Tech Wire. “MCNC, based on the direction of the NCREN community, joined several other state networks in encouraging I2 and NLR to merge.

“We believe that the best interests of the NCREN community would have been served by a merged I2/NLR organization,” he added. “We believed a merged organization would have presented two things.

“First, it would maintain a powerful platform for cutting edge network research. A sustainable financial model that would guarantee innovation in networking well into the future.

“Second, a merged organization, we believe would have provided a sustainable financial model for a high bandwidth, low latency network that could support collaborative research and learning across many domains (such as) information technology, genomics(and) biotechnology.”

Based on an internal assessment, MCNC estimated that a merger would have cut its access costs to the networks to $500,000 from $1.5 million within the near future.

Given the continued costs at the higher level, Freddoso said the NCREN community would have to conduct a cost-benefit analysis to determine whether to utilize both networks.

“Our responsibility at MCNC is to the user community of NCREN,” said Freddoso, a former executive at Cisco Systems who recently took the MCNC post. “For now, with no merger, we maintain status quo. The NCREN community requires access to both advanced research networks. Over time, the community will assess its needs and we will take action based on that assessment.”

In addition to the UNC System, other NCREN customers include Duke and Wake Forest universities, the state’s community colleges and school districts.

“In a perfect world we would want to maintain access to both networks, but the community now has to carefully consider the cost and do a thorough cost/benefit analysis to decide how to best meet our needs for advanced network access,” Freddoso explained.

Internet 2 and National LambaRail were launched with different missions – I2 as a high-speed alternative to the Internet and the NLR as a high-speed test bed. But over the past several years the networks morphed toward a similar provision of services and worked with many of the same clients.

Jeff Lehman, chairman of the I2 board, told The Associated Press that I2 clients supported the merger. The leadership of the two networks struck a deal in August, but the NLR board rejected it.

"Under the circumstances, we agree that our respective organizations have no choice but to move forward independently," Lehman and NLR Chairman Erv Blythe said in a joint statement, according to the AP.