internet policy day 2 - workshop session no. 3 interconnection, ixps and voice-over-ip prepared for...

Internet PolicyDay 2 - Workshop Session No. 3

Interconnection, IXPs and Voice-over-IP

Prepared for CTO by Link Centre, Witwatersrand University, South Africa

CTO / DFID Internet Policy workshop, Jamaica, 22-26 April 2002

Sessions Summary Day 1

– Session 1History and technical background– Session 2Market structure

Day 2– Session 3 Interconnection, IXPs and voice-over-IP– Session 4Governance and domain names

Day 3– Session 5The impact of telecommunications regulation– Session 6Internet specific policy issues

Day 4– Session 7Content on the Internet – Session 8E-commerce issues

Day 5– Session 9Internet tools for regulators– Session 10 Conclusion, review and evaluation


Interconnectio, IXPs and voice-over-IP

The purpose of this session is:– to understand how Internet interconnection

policies and economics have developed– to examine the technical and economic

operation of an Internet exchange point (IXP)– to review interconnection issues such as the

value of traffic and dominant operators– to look at some examples of voice over the

Internet– to review some policy approaches to these

issues and look at some likely future trends


Topics of Discussion

History of Internet interconnection Interconnection terminology Interconnection agreements Internet exchange points (IXPs) Case studies: JINX and KINX Interconnection issues Regulatory strategies Trends Voice-over-IP


History of Interconnection

Why interconnect?– For routing of traffic (at least one

interconnection)– For efficient routing (multiple interconnections)

Co-operative era (ARPAnet/NSFnet period)– NAPs, development of ‘peering’ policies– Restrictions on commercial use

Commercial era– Private exchanges developed in parallel to NAPs– Negotiated bilateral commercial agreement


Interconnection Terminology

ISPs– Reminder: ISPs means IAPs– But what is an Internet access provider

Do Internet Cafés count?

– What is a “connection to the Internet”? From outside the US: international connections

Backbone ISPs– Operate national networks– Often have international interconnection



Peering– Peer = network of roughly the same ‘size’– Size might mean:

geographic reach traffic volumes customer base

Transit– When there is no direct link between two

networks -- traffic transits across other networks– Provided mainly by backbone operators



Traffic– Traffic is of increasing importance– Internet Protocol (IP) has no built-in cost

accounting– Possible to measure traffic with other protocols

Historically difficult and costly Becoming easier and cheaper with time

Internet Exchange Points (IXPs)– Centralised exchange facilities– Many ISPs exchange Internet traffic at each IXP


Interconnection Agreements

ISP/customer– Two way flow of traffic– One way flow of money (customer to

ISP) Connection fee Monthly rates (fixed or traffic based)

– Discounts for strategic customers– Customers might also be ISPs



ISP to ISP– Neither ISP is a customer of the other– Two way flow of traffic– Interconnection costs usually shared– ‘Larger’ ISP may charge smaller ISP a

traffic-based fee– Transit agreements are a special case of

ISP-to-ISP interconnection agreement



Multi-ISP exchange– IXP established– Multiple ISPs connect to the IXP– Multi-directional flow of traffic– Each ISP can still chose which of the

other ISP networks to interconnect with, and on what terms

– Sometimes the IXP operator has some over-riding policies


Internet Exchanges

Technical overview of exchanges– Cabinets housing a number of routers (at least one

per ISP) and at least one switch– Connections from each ISP to the IXP– Redundancy is desirable

Pros and cons– Pro: Cost savings (costs can be very low)– Pro: Efficient traffic exchange– Con: Less redundancy than meshed interconnection– Con: Historically, IXPs have been congested


Internet Exchanges


Case study: JINX

JINX– Johannesburg Internet Exchange– Established late-1996

[stats from early 2000]

Traffic– Peak throughput 34 Mb/s

Cost of extra 34 Mb/s capacity– $360,000/month (SA half-circuit)– $120,000/month (US half-circuit)

Costs– $40,000 initial

set-up– $1,000 per month

‘Savings’– SA Internet

industry: $5.7 million annually

– SA foreign exchange: $2.5 million annually


Case study: KIXP What happened?

– Nov 2000: Kenyan IXP goes live, initially connecting four ISPs

– Dec 2000: Communications Commission of Kenya (CCK) shuts-down KIXP

– Dec 2001: After a year of negotiation, KIXP reopens Why?

– Unlicensed service– Pressure from Telkom Kenya?

Effect of the shut-down on consumers– Delays in e-mail traffic– Slow web access, impaired international connectivity– Continuing failures of ‘national backbone’


Interconnection Issues

Determining value– Interconnection agreements tend to reward the

larger of the two interconnecting ISPs– But larger ISPs also ‘use’ the small ISPs network,

deriving benefits– There is value to the traffic flowing in each direction– Market forces essentially determine where the value

lies in each agreement– Strong incentive for ISPs to reach amicable

interconnect agreements: Need each others’ networks



Dominance of backbone providers– Move from zero-charge ‘peering’ towards traffic-

based interconnect seem reasonable– But, this has happened at the same time as massive

consolidation of the Internet market– Four companies control 85-95% of traffic on the

Internet– US industry and government agree: no immediate

threat to a competitive industry– Regulators must pay attention to dominant players– Dominant players do not necessarily make good IXP

hosts



The US-centric Internet…? – For both historical and economic reasons, the US

backbone is also the world’s Internet backbone– Routing between neighbouring countries is often

via the US -- this is not very efficient– One view: It isn’t fair that there is a one-way

flow of money but a two-way flow of traffic over international connections to the US backbone

– Alternative view: The US provides cost-effective transit to hundred of other countries using its national backbone



Local exchange interconnection– End-users connect to ISPs via telephone

exchanges– ISPs lease telephone lines from telcos which are

connected to banks of access modems (or other equipment)

– In some places local exchange carriers (LECs) offer commission to ISPs on call revenue generated by customers connecting to the ISPs’ networks

Economic model behind many ‘free’ ISPs



Cable interconnection– Cable is a good alternative access

medium for connecting end-users to the Internet

– In the US, there have been concerns that exclusive deals made between cable operators and some ISPs may constitute unfair practice.

– Regulatory pressure has sped up the opening up of the cable access market


Regulatory Strategies

Dangers of regulation Strategies

– Domestic competition– Protection from dominant players– Transparency


Trends

Likely future trends – Move from free ‘peering’ to settlement

based interconnection– Prices for international Internet

interconnection will continue to drop steadily

– New protocols and better traffic management will allow ISPs to offer increasingly differentiated services


Voice over the Internet

Voice over the Internet– Sample applications

Internet user <--> Internet user Internet user <--> telephone users Bulk shipping of international voice traffic over Internet

links

– Regulatory responses Ban/limit -- only partially effective Promote

– Note: Voice-over-the-Internet is not the same as Voice-over-IP. IP can also be used in private networks.


Summary Interconnection agreements have moved

from co-operative to commercial over time Interconnection happens at all levels Agreements are based on the perceived

value of the connection to each party Internet exchanges are a technically

efficient and cost-effective way to connect multiple networks

Voice over the Internet is eroding traditional telephony pricing models

internet policy day 2 - workshop session no. 3 interconnection, ixps and voice-over-ip prepared for...

Documents

internet session

internet tools

internet policyday

workshop session

policy approaches

routing of traffic

value of traffic

traffic transits