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Newsletter Newsletter N°1:

Internet Exchange Points

By Kurt Erik Lindqvist, CEO of Netnod

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Internet Exchange Points (IXPs) have recently gained increased interest in Internet Governance discussions, as well as among governments. IXPs have played an important role in the development of the Internet, and especially in driving down connectivity costs, increasing resilience of the network and in improving the end-user experience.

Europe today is the region of the world with perhaps the most IXPs in the world. This density of interconnects has served Europe well, and has contributed to among the highest broadband speeds to the lowest cost. IXPs and interconnects were established early in the European Internet as a means to save on expensive transatlantic costs (at a time when 80% of all traffic went to content located in the US), as well as saving on expensive intra European circuits. IXPs and interconnects allowed the new and emerging Internet Service Providers (ISPs) to compete with the larger and often incumbent operators. This competition followed the deregulation of the European telecommunication markets in the early 1990s, and this led to a build out of access networks as well as price erosion in the end user charges. The importance of deregulation in creating a competitive European market can’t be overstated, and this was also instrumental in creating the dynamic interconnected ecosystem that still exists today. Another reason for the success of the IXPs in Europe is that they are almost all membership owned and driven. This was possible through the emergence of the cooperative environment that exists still today. This is reflected in the recent OECD study  of interconnection agreements, which showed that 99.5% of agreements are made on a handshake, and not in written agreements. OECD is continuing to do work in this area with more studies supported by the Internet Technical Advisory Committee.

So why is the existence of IXPs and interconnects important? First of all, IXPs still can save on costs, although the cost for circuits and Internet transit in large parts of Europe today has fallen sharply and tends to be at or below the cost for connecting to an IXP. More importantly however, IXPs also helped to improve the end user experience over time. In the early days of the European Internet, traffic between operators in the same country could go via the US and back. This changed gradually and initially traffic stayed in Europe and over time traffic stayed inside countries, and today the trend is for more and more IXPs inside each European country, further keeping traffic local, improving the end-user experience and lowering the cost for handling traffic overall. This gradual localization of traffic drove the development of new IXPs, while at the same time new IXPs enabled the localization of traffic. This mutual benefit led to a dense network of interconnects. Today, this localization is furthered with the deployment of content delivery platforms (from companies such as Google, Akamai, Limelight etc) both located in many IXPs, but also inside operators’ networks and close to the end users. This is driven by the advent of high bandwidth applications such as video, which puts greater requirements on performance between content and end users.

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Source:  Euro-IX

Lastly, IXPs and the dense interconnection network that were developed have  increased the resilience of the European Internet. This density has helped the European Internet work through major events such as 9/11 and large scale outages in operators, which has allowed the network and content to continue to function. This is an aspect often overlooked but IXPs and interconnects play a crucial role in securing the Internet and all the applications that depends on it.

Many other parts of the world today find themselves at a similar state of Internet development as Europe was at in the early and mid 1990s. There are many important lessons to be learnt from what happened in Europe and what the driving factors were. Other regions can learn from the factors that created the enabling environment that fostered the growth of IXPs and interconnects, such as the deregulation of the telecom markets and the trust and cooperation between the operators. The European experience has been a success with high bandwidth broadband at low cost for the benefits of the end users. This in turn has acted as a platform for the development of new services and ecommerce that has driven the growth of the digital economy.

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[1] http://oecdinsights.org/2012/10/22/internet-traffic-exchange-2-billion-users-and-its-done-on-a-handshake/

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Newsletter

The Economic Benefits of IPv6 Implementation

By Mat Ford, Technology Program Manager, Internet Society

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The Internet is a powerful force for unleashing innovation and economic growth. Underpinning this capacity of the Internet to drive change and progress are some aspects of technology that may be easy to overlook, but that are in fact fundamental. The huge economic and social benefits brought about by the Internet are ultimately supported by very specific characteristics of the underlying technology.

The Internet is powerful because it is global and because it is open. The global nature of the Internet is made possible by Internet addressing. Without a unique, public Internet address, communications must be proxied, leading to degradation of communication quality, and reduced potential for the network overall.[1] Proxying communications in this way reduces the resilience of the network, increases costs for service providers, has implications for communications traceability and curtails the ability of the network to act as a platform for innovation, thereby diminishing the economic growth associated with the Internet. The need to proxy communications is growing as available public address space runs out all over the world. In addition to costs for service providers, it’s worth noting that growing use of proxies creates costs for the whole Internet industry as they work around the proxies. This will be needed in the short term, but it is possible to move to a better solution for the long-term future of the Internet and remove these costs from the entire industry.

Deployment of IPv6 technology is the solution for this growing problem.[2] In the 2008 Seoul Declaration for the Future of the Internet Economy, OECD member states encouraged the adoption of IPv6, in particular by governments and large private sector users. The Internet technical community echoed this encouragement in their Memorandum on the Future of the Internet in a Global Economy, where the fundamental importance of IPv6 deployment for the successful evolution of the Internet was strongly emphasized.

Since 2008, IPv6 deployment has gathered pace, stimulated recently by World IPv6 Launch, an industry-wide collaborative activity organized by the Internet Society. This activity has helped to encourage IPv6 deployment at large Internet content providers, service providers and equipment vendors. Major fixed-line and mobile Internet service providers are now starting to carry significant volumes of IPv6 traffic on their networks, and this progress is being measured and reported regularly to stimulate further progress across the wider Internet industry. IPv6 implementation will support huge growth in the range of services and products that make use of the Internet and is a fundamental enabler of the Internet economy, supporting the creation of new markets and catalyzing economic growth.

But further encouragement is necessary. Overall IPv6 uptake remains patchy and the opportunity remains for governments and leading private sector organizations to show leadership in securing the future of the open and global Internet, with sufficient public addresses for all, that is so central to the economic growth of tomorrow.

Read more about the Internet Society’s IPv6 activities here: http://www.internetsociety.org/ipv6
http://www.internetsociety.org/ipv6-isp-heatmap

Read more about World IPv6 Launch here:
http://www.worldipv6launch.org/infographic/

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[1] Communications are proxied by Network Address Translators (NATs). The NAT has a public Internet address that it shares across multiple private connections.

[2] Internet Protocol version 6 (IPv6) is the latest revision of the Internet Protocol (IP), the communications protocol that provides an identification and location system for computers on the Internet. IPv6 was developed by the Internet Engineering Task Force (IETF) to deal with the long-anticipated problem of IPv4 address exhaustion. See http://en.wikipedia.org/wiki/IPv6 for more detail.