So in this series we're going to look at internet exchange points and what value they bring to the internet ecosystem. So let's start at the beginning. Consider a region with one Internet service provider. They're providing Internet connectivity to the customers and they have one or two international or transit connections as linterna grows another isp sets up in competition they provide internet connectivity to their customers and they also have transit connections so how does traffic from one customer of one ISP get to a customer of the other ISP yes indeed the transit connections and these quite often would be international links going out of the country to some backbone provider in another country or even another part of the world major contact maybe tens if not hundreds of milliseconds away if this link is over satellite the round-trip time would be 550 milliseconds per hop if we're using geostationary satellites so local traffic between two operators could take over one second round-trip time and this is a huge disincentive for a local internet economy why would say a local newspaper or television station who is content with one ISP if half the customers in the country are connected to the other ISP they'll be much better off hosting their content with the transit provider of the two ISPs in another country somewhere else on the planet and this also means international bandwidth and that cost significantly more than domestic bandwidth it will be congested than with local traffic local traffic on international links waste money for both operators and harms overall performance for all users so the solution of this is that the two competing ISPs peer with each other maybe an unusual solution and certainly the two competitors would not like the idea of somehow cooperating with each other but it is actually the best and only solution to this issue the result is that both operators save money local traffic stays local thus better network performance better quality of service and more international bandwidth for expensive international traffic and everyone is happy what happens now when a third ISP enters the equation they become a significant player as well and we see the same thing local and international traffic goes over the international connections all 3 ISPs agree to peer with each other to save money keep all go traffic local improve network performance improve service quality for end-users improve the value proposition for local content hosting private peering means that the 3 ISPs have to buy circuits between each other it works for 3 ISPs by adding a fourth or a fifth means this does not scale and the solution is the internet exchange part internet exchange point is where each participant has to deploy just one link from their premises to the IXP rather than n minus 1 links to connect to the N minus 1 other ISPs 5 ISPs will have to share the cost of 4 links which is to whole links and that's already twice the cost of simply going to the exchange part so the solution is that every ISP participates in exchange point the cost is minimal one link covers all domestic traffic and international links are now used just for international traffic and of course backup of the domestic links in case the IXP suffers any outage the result local traffic stays local QoS considerations for local traffic is simply not an issue and the round-trip times between members are typically under a millisecond customers enjoy the internet experience and the local internet economy grows rapidly so who can join an IXP well the requirements are actually very simple any organization which operates their own autonomous network and has the own address space their own a s number and their own transit arrangements it really is as simple as that so this includes commercial ISPs it includes academic and research networks it includes Internet infrastructure operators for example the root name server operators the country top level domain operators and the general top-level domain operators content providers and content distribution services quite often turn up at exchange points as well broadcasters in the media and of course with more and more government appearing in many countries around the world government information networks quite commonly will join exchange points as well there are times when an exchange point may not be beneficial it may be by legislation where there's one legislative monopoly transit provider with all other network operators are legislated to be customers of this monopoly provider there's not much that can be done here apart from change in the legislation an IXP may not be beneficial due to geography when the local economy is so small that it cannot sustain more than one network operator very small nations are sparsely populated or remote areas there may be cases where an exchange point is not permitted and this is still the situation in several countries around the world usually it is a government owned operated national telco where the isp license mandates connecting to the national telekinetic ations of this are expensive domestic connectivity because the national telco can set whatever price they want can be expensive international connectivity because the national telco doesn't feel the need for any competition or any competitive prices and they can pass on whatever costs they want. Restricted and poor service offerings. No one's competing with them, no one has any incentive to be creative and there is generally no domestic internet economy. Everyone loses especially the national telco who's trying to stop the competition in the first place.

© Produced by Philip Smith and the Network Startup Resource Center, through the University of Oregon.

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