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

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 Local ISPs Gateways Internet Exchange Point

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

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

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

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 Current African Submarine Fibre Connectivity: Mostly “Perimeter” Source: CTiA Report 2002/03

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

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

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