Networking giant Cisco (CSCO) on Tuesday unveiled a new network router it says "will forever change the Internet and its impact on consumers, businesses and governments." The new system, called the Cisco CRS-3 Carrier Routing System, will offer network speeds three times faster than its predecessor, the CRS-1 -- or 322 terabits per second -- and 12 times faster than its nearest rival.

Cisco plans to sell the new router, which will be used to direct traffic along the Internet's backbone, to Internet service providers at $90,000 per unit.

The main focus of the new hardware is the exploding market for online video, which requires significantly more bandwidth than traditional data. Calling video "the killer app," Cisco CEO John Chambers (pictured) said in a Webcast that the CRS-3 can distribute 1 billion online videos at any given time.

The announcement had been expected -- and in anticipation, the company's shares have risen 9% in the last two weeks. But the unveiling fell short of the buildup: Minutes after making the new router public, Cisco stock had pulled back slightly, declining 0.75%, even as the Nasdaq was up 0.5%.

"It will just make the network cheaper to operate and allow the carrier to aggregate many more circuits at one site," says Bill St. Arnaud, a network expert. "So rather than deploying 20 smaller routers to connect customers to a cloud, you might be able to get away with one big box such as this."

"The Next Generation Internet Is Upon Us"


In a statement, Cisco said the new system will allow "the entire printed collection of the Library of Congress to be downloaded in just over one second; every man, woman and child in China to make a video call, simultaneously; and every motion picture ever created to be streamed in less than four minutes."

"The next generation Internet is upon us, and we are confident that the Cisco CRS-3 will play a crucial role as service providers like AT&T deliver an exciting, new array of video, mobile, data center and cloud services," Pankaj Patel, senior vice president and general manager at Cisco's Service Provider Business, said in a statement.

"We are entering the next stage of global communication and entertainment services and applications, which requires a new set of advanced Internet networking technologies," Keith Cambron, president and CEO, AT&T Labs, said in a statement. "Having leading edge experience in managing the largest global data network, we are pleased to continue our close working relationship with Cisco and its groundbreaking Cisco CRS-3 platform."

"Key Milestone"


Broadband giant AT&T (T) has already tested the system during what it called the "successful completion of the world's first field trial of 100-Gigabit backbone network technology, which took place in AT&T's live network between New Orleans and Miami."

"This successful field trial is a key milestone in our ongoing effort to deliver the industry's most advanced and capable IP [Internet protocol] backbone network," John Donovan, AT&T's chief technology officer, said in a statement. "The AT&T IP backbone network today carries nearly 19 petabytes of traffic on an average business day, supporting our wireless, wired and enterprise customers' ever-growing demand for wireless and wired broadband applications."

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