Levelling Up Your IXP

The growth of the IXP reduces traffic exchange costs, lowers latency, enhances redundancy and attracts domestic and global content providers. This increases the appeal of connecting other parts of the country to the exchange. Building out domestic networks increases a country's infrastructure assets, reduces access costs for users and shrinks digital gaps within the nation.

There are different strategies for connecting regional ISPs to IXP's. One is for the IXP to increase its geographic reach by establishing additional nodes in other locations. A second strategy is to build out domestic backbone connectivity so that different parts of the country can reach the IXP. In practice, both approaches are often followed since it may not be feasible to put an IXP node in every location.

A number of countries, particularly of large geographic size, have created additional IXP points of presence. The Internet Exchange of India has seven locations, PTT of Brazil has 24 metropolitan locations while the Moscow Internet Exchange (MSK-IX) is interconnected to 11 sites in the capital as well as eight other Russian cities.

In countries where there is only one physical IXP, ISPs located in other areas would need to obtain a backhaul link in order to connect. The high cost or lack of high-speed national backbone connectivity has been a deterrent to connecting ISPs to the IXP. In some cases the cost of domestic connectivity is higher than international IP transit (particularly when charged on a distance rather than traffic basis). This is also an issue where there are multiple IXP nodes since they will not reach every population center.

Given the benefits of connecting to the IXP, countries are encouraging the deployment of national telecommunications infrastructure through a variety of strategies. In some cases, governments are promoting domestic backbone connectivity using a variety of policies. This includes developing national fiber networks through public private partnerships. This is an option where the costs of construction are too high and the private sector is not convinced of the return on investment. Another strategy is through regulatory tools such as price controls on operators with significant market power in the domestic wholesale bandwidth market or encouraging infrastructure sharing among operators. One of the simplest solutions is just allowing a competitive wholesale bandwidth market. This will attract domestic and foreign investors as well as utilities such as power companies and railroads with their own fiber optic networks.

Kenya has pursued a number of these strategies. The government has funded the National Optic Fibre Backbone Infrastructure (NOFBI) network extending thousands of kilometers throughout the country. In addition, the backbone fiber market is liberalized with several providers including the country's power utility. In fact the latter, Kenya Power and Lighting Company, has emerged as the largest wholesale fiber operator in the country. These developments have lowered the cost of domestic IP transmission, facilitating ISPs connecting to the KIXP. The fiber networks are built to the borders of several neighboring countries which has reinforced KIXP's attractiveness as an East African hub; a second IXP has been established in Mombasa, site of the undersea cable landing stations. This has attracted international operators to the exchange. In 2011, over half of the Autonomous Systems Numbers (ASNs) routed through KIXP originated from over a dozen foreign countries (Mwangi 2012).

In Argentina, ISPs outside large cities have high domestic transport costs exacerbated by limited competition. ISPs and citizens in these areas pay higher wholesale and retail costs than those in main urban centers, impacting the growth of the Internet market. The Argentine Internet Chamber (CABASE) an association of ISPs which operates the IXP NAP Buenos Aires spearheaded an initiative to connect these regions. This would allow them to exchange local traffic and interconnect through NAP Buenos Aires, forming a virtual IXP with national reach. The first node was established in 2011 and to date, nine regional IXPs are operational, connecting over 80 network operators through a central routing hub in Buenos Aires. By aggregating outbound traffic at the IXP, small network operators were able to negotiate better contract terms with upstream transit providers. Prices in the national transit market have declined to about USD $40 per Mbps per month (Galperin 2013).

The growth in domestic IP traffic can attract international bandwidth providers. This can be particularly important for landlocked countries.  For example one option is for international IP transit providers to establish a POP operating as a virtual landing station. Such is the case in East Africa where the SEACOM undersea fiber optic cable company has established such POPs in Rwanda and Uganda.

One trend is the globalization of IXPs as they expand their services outside their home countries. The Amsterdam Internet Exchange (AMS-IX) is at the forefront of this internationalization trend. It helped established the Caribbean Internet Exchange (CAR-IX) in Curacao in 2008 and in 2013 it was assimilated into the AMS-IX global network. AMS-IX has created a POP in Hong Kong, the first such platform allowing remote peering from Asia into Amsterdam. AMX-IX is also partnering with Kenya Internet Exchange Point (KIXP) and undersea cable provider SEACOM to establish a regional exchange for East Africa that will also support virtual peering to Amsterdam. (AMS-IX 2013). The Dutch exchange recently announced plans to set up several exchanges in the United States as part of the Open-IX initiative. This aims to introduce neutral multilateral peering in order to reduce costs for major content providers such as the video streaming company Netflix.[1]