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Cost-Savings Exercise

Cost-Savings Exercise. AFIX Technical Workshop Session 2. Outline of Content. What technical realities drive cost changes? A tool for understanding in detail ISP Models Scenarios Exercise: Using a modelling tool to explore possible scenarios and their cost-savings implications.

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Cost-Savings Exercise

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  1. Cost-Savings Exercise AFIX Technical Workshop Session 2

  2. Outline of Content • What technical realities drive cost changes? • A tool for understanding in detail • ISP Models • Scenarios • Exercise: Using a modelling tool to explore possible scenarios and their cost-savings implications AFIX Technical Workshop: Session 2

  3. What technical realities drive cost changes? • Handling local traffic today • Option A: Bypassing ISPs • Option B: Bi-lateral peering • Option C: The IXP AFIX Technical Workshop: Session 2

  4. Handling local traffic today Global ISPs International bandwidth (expensive) M2 S4 S3 S4 L1 Local ISPs User A User B AFIX Technical Workshop: Session 2

  5. Handling local traffic today - another variation Global ISPs International bandwidth (expensive) M2 S4 S3 S4 L1 Local ISPs user A user B AFIX Technical Workshop: Session 2

  6. Option A: Bypassing ISPs Global ISPs International bandwidth (expensive) M2 S4 S3 S4 Local ISPs L1 Local dedicated line (cheaper) user A user B AFIX Technical Workshop: Session 2

  7. Option B: Bi-lateral peering Global ISPs International bandwidth (expensive) Local ISPs M2 S4 S3 S4 L1 Local dedicated lines (cheaper) user A user B AFIX Technical Workshop: Session 2

  8. Option C: The IXP Global ISPs International bandwidth (expensive) Local ISPs M2 S4 S3 S4 L1 IXP Local dedicated lines (cheaper) user A user B AFIX Technical Workshop: Session 2

  9. Option C: The IXP – another possibility Global ISPs International bandwidth (expensive) Local ISPs M2 S4 S3 S4 L1 IXP Local dedicated lines (cheaper) b user A user B AFIX Technical Workshop: Session 2

  10. Spreadsheet: ISP Models • Divided into segments based on international bandwidth (Mbps) • Variable (green shaded area): Bandwidth per ISP • Global variables: • Cost of international bandwidth ($/Mbps/month) • Cost of local bandwidth ($/Mbps/month) • Average % of traffic that is local • Standard local bandwidth increment (Mbps) • Fee to participate in peering, per ISP per year AFIX Technical Workshop: Session 2

  11. Scenario spreadsheets • Uses data from ISP Models worksheet • 4 possible scenarios for comparison • Indicate # of ISPs of each size that are in your market. • Indicate # of those ISPs who choose to participate in an IXP • Change any global variables to suit your market AFIX Technical Workshop: Session 2

  12. ISPs who dominate already keep much of their local traffic local (% internally routed traffic). This traffic will not go through an IXP in any case. Savings come from converting (old) international Mbps to (new) local Mbps. Costs come from the new local lines and sharing operating costs for the IXP. Scenarios – Keys to Interpretation AFIX Technical Workshop: Session 2

  13. Exercise: AFIX Technical Workshop: Session 2

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