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Internet Governance 18 November 2009

Improved Internet Interconnection at Lower Cost – An Area of Required Attention

Interconnection is a phenomenal terminology used in telecommunication networks describing the procedure where two operators frame an agreement of traffic trade. An operator interconnects with another operator in order to route its traffic. In the world of Internet where networks of network form baseline infrastructure, interconnect allows a small ISP to transmit its traffic to corresponding bandwidth provider which probably has an interconnect agreement with a TIER 1 International bandwidth provider and it goes on.

A workshop session was held on Monday, 16 November during Internet Governance Forum 2009 meeting on the topic of ‘Public Policies for an improved interconnection at lower cost’. It was workshop # 270, proposed by LACNIC with panelist from Verizon Business, LINX (Internet Exchange Point, London), ECLAC – UN (Economic Commission for Latin America and the Caribbean) and ISP sector of South Africa.

Interconnection is a considerable part of overall OPEX of an ISP and has a deep impact on service cost paid by the Internet end-user. The primary purpose of the workshop was to discuss the present interconnection scenario over Internet which has changed with the passage of time and also propose public policy issues linked with bringing the cost down.

Interconnection inside Internet was one of the main topics during WSIS and it is much more complex topic to discuss. Internet Interconnection 5-10 years ago was primarily based on International link, content was web and e-mail where TIER 1 operator was the main service providers having a mutual settlement with each other. At that time no interconnection was experienced inside a country with service providers paying a very high cost to reach a transit provider.

However with the growing development of Internet services and applications, the scenario has changed now with much more complex interconnection environment. TIER 1 providers still exist but now we have other competitors with improved regional networks working close to global network transmitting traffic. With enriched multimedia and entertainment content being communicated over Internet, content provider have shaped their own CDNs (Content Distribution Networks) enabling local presence of content to the end-user, providing a local access, as an example now while watching a video we experience a smooth streaming rather than buffering stopovers. The scenario not only improves the user experience but enhances QoS (Quality of Service) as well. We now observe renowned companies like Google, Yahoo and YouTube investing immensely towards deploying regional CDNs.

Internet Exchange Points (IXPs) are another network infrastructure changing the Internet interconnection scenario; they are enabling an excellent platform to offer mutual sharing of Internet traffic at a low cost, reducing average bit delivery cost of an ISP. The CDN operators are trying to put up their own IXPs which in result are reducing ISPs dependencies on TEIR 1 operators. Probably as a personal view, I think this is a reason why major opponents of network neutrality concept revolve around the TIER1 service providers losing revenue as a result of these cheap Interconnection methodologies.

At the same level, importance of International bandwidth providers remains there as far as Internet interconnection is concerned. Since you require an International connectivity to transmit traffic over the Internet as a whole. Improving the international bandwidth connectivity situation is what could help in lowering overall Internet service cost as it provides more competition in International interconnection regime of a particular country.
The session was concluded with the following set of suggestions for operators and policy makers:

• Increase data center infrastructure.
• Host major content providers.
• Revisit Internet tax policies.
• Stimulate regional traffic exchange.
• Facilitate access to submarine cable by promoting competition.
• Devise cost based models for IPLC (International Private Leased Circuit)

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Disclaimer: Viewpoints expressed in this post are those of the author and may or may not reflect official Internet Society positions.

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