Internet Exchange Points: A Business & Policy Perspective

AFIX Decision-makers’ WorkshopSession 1

AFIX-TF, <Location> <Date>

Introduction African Internet Service Providers

Association - AfrISPA African Internet Exchange Task Force

- AFIX-TF

Types of traffic exchange The Internet would not exist without

agreements to exchange traffic!!! Competitor ISPs must co-operate to

serve their clients Two main forms of traffic exchange:

Transit – sell access to all destinations in routing table

Peering – access to each other’s customers

Transit: More detail Business relationship where one ISP provides

(usually sells) connectivity to all Internet destinations Carries traffic to/from third parties, including

own customers AND every other destination Bilateral business & technical arrangement Defined price, usually by volume (Mbps) Generally includes Service Level Agreement

(SLA), installation & Network Operations Center (NOC) support

Peering: More detail Business relationship where two ISPs give

reciprocal access to their own customers They will accept traffic from each other and from

each other’s customers BUT there is no obligation to carry traffic to third

parties Bilateral business & technical arrangement No cash payments (more like barter); no

settlement No Service Level Agreement (SLA)

Peering vs Transit

Economic Choices An ISP cannot peer with every other

ISP in the world (10,000+) So most ISPs try to do both:

Exchange as much traffic as possible with peers; AND

Pay for the rest ISP goal: Minimise transit to minimise

costs

Politics of peering Large ISPs that sell transit to developing

countries are nearly always US, European, or Japanese-owned

In most developing countries, domestic ISPs do not peer with each other!

Any country whose ISPs do not peer with each other relies exclusively on transit Needless export of capital Effectively subsidising the developed world

Developing country payments for transit are not small!

Overseas Interconnection Costs

Using your upstream provider to exchange local traffic over a trans-continental link is expen$ive

Bw InternationalLocal

64k $1,687 $190

128k $2,386 $274

256k $3,375 $378

512k $4,773 $535

1MB $6,750 $757Telkom Kenya Bandwidth Tariffs Dec. 2001

The alternative: IXPs IXP = Internet Exchange Point Places where ISPs come to interconnect

with each other – “clearing house” for Internet traffic

Keep local traffic local

“IXPs are the keystone of the entire Internet economy.”

Cisco Systems

Local Infrastructure

Local ISPs

Gateways

Internet Exchange Point

Keeping local traffic local ISPs within a region peer

with each other at local exchange

No need to have traffic go overseas only to come back

ISP A

ISP B

200-900ms 200-900ms

USA

5-20ms

200-900ms

IXP Benefits Better quality Cash savings Added value New revenue opportunities

Better Quality Reduced delays Improved performance

5-20ms

InternetInternet

AABB

Cash savingsBw International Local64k $1,687 $190128k $2,386 $274256k $3,375 $378512k $4,773 $5351MB $6,750 $757Telkom Kenya Bandwidth Tariffs Dec. 2001

Africa loses over US$400 million each year for traffic exchange via other continents

Added value Metcalfe’s Law: “The usefulness of a

network equals the square of the number of users”

Connect any number, "n" of machines – whether computers, phones or even cars - and you get “n” squared potential value.

n21 + n22 + n23 + n24 + n25 …………. n2n

Added value II A strong domestic Internet industry

creates high-paying knowledge worker positions

Domestic traffic exchange reduces the importation of foreign content and cultural values, in favor of domestic content authoring and publishing

New revenue opportunities Streaming video/audio Video-conferencing Telemedicine e-Commerce e-Learning e-Governance e-Banking E-Anything!

IXPs In Africa Uganda: UIXP – launched June 03 Tanzania: TIXP – semi-operational South Africa: JINX Mozambique: MOZ-IX Zimbabwe: ZIX Egypt: EG-IX Nigeria: “small” Ibadan IX Kinshasa: operational

Critical Factors for IXPs National exchanges Political support Policy reform (where necessary) Regulatory provisioning Regional co-operation Strategic partnerships Critical infrastructure

IXPs: Things to Do Any peering/IX initiative involves 10%

technical work The remaining 90% is relationships

(socio-political engineering) Official regulatory support Definition of internal peering policy

framework

Next steps Establish national IXPs Create opportunities for the

emergence of regional carriers facilitating regional peering/continental transit

Promote cross-border links and inter-country infrastructure

SAT-2, SAT-3/WASC/SAFE, SEA-ME-WE, ATLANTIS 2, FLAG

Current African Submarine Fibre Connectivity: Mostly “Perimeter”

Sourc

e:

CTiA

Rep

ort

20

02

/03

Planned inter-country fibre: COMTEL

Sourc

e:

CTiA

Rep

ort

20

02

/03

Planned inter-country fibre: SRII

Sourc

e:

CTiA

Rep

ort

20

02

/03

Planned inter-country fibre: EADTP

Sourc

e:

CTiA

Rep

ort

20

02

/03