Internet Exchange Points: A Business & Policy Perspective

1. Internet Exchange Points: A Business & Policy Perspective AFIX Decision-makers’ Workshop Session 1 AFIX-TF, <Location> <Date>

2. Introduction • African Internet Service Providers Association - AfrISPA • African Internet Exchange Task Force - AFIX-TF

3. 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

4. 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

5. 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)

6. Peering vs Transit

7. 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

8. 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!

9. 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 $757 Telkom Kenya Bandwidth Tariffs Dec. 2001

10. 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

11. Local Infrastructure Gateways Local ISPs Internet Exchange Point

12. ISP A ISP B 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 USA 200-900ms 200-900ms 200-900ms 5-20ms

13. IXP Benefits • Better quality • Cash savings • Added value • New revenue opportunities

14. Internet B A Better Quality • Reduced delays • Improved performance 5-20ms

15. Cash savings Bw InternationalLocal 64k $1,687 $190 128k $2,386 $274 256k $3,375 $378 512k $4,773 $535 1MB $6,750 $757 Telkom Kenya Bandwidth Tariffs Dec. 2001 • Africa loses over US$400 million each year for traffic exchange via other continents

16. 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

17. 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

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

19. 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

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

21. 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

22. 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

23. SAT-2, SAT-3/WASC/SAFE, SEA-ME-WE, ATLANTIS 2, FLAG Source: CTiA Report 2002/03 Current African Submarine Fibre Connectivity: Mostly “Perimeter”

24. Planned inter-country fibre: COMTEL Source: CTiA Report 2002/03

25. Source: CTiA Report 2002/03 Planned inter-country fibre: SRII

26. Source: CTiA Report 2002/03 Planned inter-country fibre: EADTP