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Toward Efficiencies in Canadian Internet Traffic Exchange

Toward Efficiencies in Canadian Internet Traffic Exchange

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This paper explore the opportunities and challenges of developing Internet Exchange Points (IXPs) in Canada.
This paper explore the opportunities and challenges of developing Internet Exchange Points (IXPs) in Canada.

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Published by: Canadian Internet Registration Authority on Sep 13, 2012
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09/28/2012

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By increasing the richness and density of connections between Canadian networks,additional IXPs will increase the reliability of Internet access in Canada and its resilience todisaster and attack.The figure above shows alternative paths to connect two Canadian Internet customers. The topoption shows a short, efficient, direct path via a Canadian Internet exchange point, whereas thebottom path detours via a US ISP and Internet exchange point.Relative to comparable international peers, Canada is well behind in its provision of IXPs.Canada currently has two operational IXPs (in Toronto and Ottawa) and three in planning approximately one operational IXP per 17 million people, three to thirty times fewer than othersimilarly developed nations. A void of Canadian Internet strategy and policy has resulted inCanadian Internet users inheriting U.S. policy, costs, and flaws rather than enjoying anenvironment deliberately crafted to Canadian benefit.The provision of IXPs is not automatic: a network, or group of networks, must step up and takethe lead in addressing the physical, managerial, and technical requirements. Moreover, the merepresence of an IXP is not sufficient to improve conditions; ISPs must actually make the effort touse them. Indeed, as many Canadian networks peer in London, UK, as in the existing exchangein Ottawa. Fortunately, IXPs typically cost less than $100,000 to establish, and return oninvestment can be seen in as little as a few days.This document proceeds as follows: In section 2, we present the relevant technical underpinningsand resulting incentives. In section 3, we explore the benefits of increasing the number of IXPs inCanada. In section 4, we offer recommendations for the number, location, and structure of IXPs inCanada. In section 5, we flag possible challenges and offer specific recommendations.Toward Efficiencies in Canadian Internet Traffic Exchange
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Bill Woodcock & Benjamin EdelmanPacket Clearing House for the Canadian Internet Registration Authority
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Page 2
 
2. The technologies and incentives of Internetexchange points
The Internet is a “network of networks.” It is not a centralized, organized system. Rather, manyindependently-operated businesses carry data from one point to another and exchange data atthe borders between their networks. Occasionally, data exchanges take place via simple bilateralpairings. Far more commonly, data exchanges take place at rich meeting points where manynetworks intercommunicate. These meeting points are IXPs.A small network typically begins operation by paying another network to transport its data. Thisrelationship, “transit,” gives the small network immediate connectivity, typically to the entireInternet. Yet transit carries a high cost: the small network typically pays a service providernetwork for every byte of data sent and received – often paying in terms of total transit in bytes,peak usage in bytes per second, or otherwise in proportion to usage.More mature networks prefer to interconnect at IXPs.
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An IXP is a location where participatingnetworks exchange traffic without payment, an interconnection relationship known as “peering.”To the extent that a network has data to exchange with another network, and both these networksare connected to one or more IXPs near their locations, the networks can typically send andreceive such data in virtually unlimited quantities without significant incremental cost. More than300 IXPs exist across the world.
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In the regions where IXPs are densest and most common,networks enjoy the highest levels of growth and profitability, and consumers’ Internet accesstends to be particularly fast and inexpensive. Medium-sized networks may peer in severallocations, typically connecting with dozens of other networks. The largest networks peer indozens of locations, often connecting with thousands of other networks.For most networks, transit is a major expense. By increasing the use of peering and reducingdependence on transit, a network can retain greater profit, offer its customers lower prices, orreinvest in faster growth – and often it can partake of all these benefits.An IXP ordinarily offers the greatest benefit to a network if the IXP and network are proximate. Anetwork seeking to connect to a local IXP – potentially an IXP in the same building where thenetwork already has equipment – can often connect to that IXP with little or no recurring cost, andat a speed limited only by available equipment. In contrast, if a network must connect to a distantIXP, the connection is more costly. That cost often prompts the network to choose a lower-speedlink, but the slower link undermines much of the benefit of connecting to that IXP. Additionally, anearby IXP offers a particularly efficient path for sending data to and from other local networks. Incontrast, if a network can connect only to a distant IXP, then communications with a local networkrequire sending data from the first network to the remote IXP, then from that IXP back to thesecond network – an unnecessarily lengthy and expensive route that consumes capacity on bothnetworks’ long-haul links. To connect many networks in many locations efficiently, numerous IXPsin numerous locations are necessary.IXPs offer the greatest benefit when they are widely used. In particular, an IXP with many connectednetworks allows each network to exchange data with all others – sharply reducing those networks’reliance on costly transit service or long-distance links to a remote IXP. Indeed, the number ofpossible connections increases at a greater rate than the number of participating networks. Forexample, an IXP with four connected networks facilitates six different bidirectional data flows; anIXP with six connected networks facilitates fifteen bidirectional data flows; with ten, 45.Toward Efficiencies in Canadian Internet Traffic Exchange
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Bill Woodcock & Benjamin EdelmanPacket Clearing House for the Canadian Internet Registration Authority
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