Accessing information and interactive resources available around the globe via the Internet is a pretty simple task. In a carefree Internet world, the dynamics of connecting to resources are transparent, and we expect resources we want to access to be available through our local Internet service provider. For most, the technical details of connecting to Internet resources are an abstract concept, and whatever mechanics happen behind the scenes is irrelevant to our everyday use of the network.

Because the Internet comprises a complex matrix of physical, business, and international relationships, how these systems interact and collaborate is very important to the end user and those providing Internet services and content. The greatest concern impacting online resources from eBay to Bank of America is the potential financial pressure of the largest Tier 1 networks. As the only networks in the world having global Internet visibility, these few companies, including AT&T, Sprint, Verizon, Level 3, and Cable and Wireless, facilitate access to the global Internet – a function that people and companies worldwide depend on to ensure small networks and content providers are available through their local service providers.

InternetThe Tier 1 world was born at the demise of NSFNet (National Science Foundation Network). In the early days of Internet development, the NSF supported developing an extensive publicly funded academic and research network throughout the United States and connecting many foreign academic networks to the US as a hub through the International Connections Manager (ICM Network). As commercial Internet development grew in the early 1990s, the NSF realized it was time to back away from publicly funding the “Internet” and grant contracts to large US carriers to take over responsibility for the former US Domestic backbone and ICM portions NSFNet. Minor Internet exchange points (IXPs) were also funded, allowing the large networks to take over NSFNet assets and their commercial Internet to connect and share Internet traffic. Those network access points (NAPs) were also contracted to the large US carriers, who managed the US and International network exchange policies. The large US carriers ultimately had control of the networks and were the original Tier 1 Internet providers.

Roadblocks in the Internet Community

Debates around net neutrality highlight some underlying issues. Net neutrality aims to preserve the open and interconnected nature of the public Internet. But whether the largest networks use their control to hinder growth and innovation within the Internet business community or impede free access to Internet-connected content sources, they have the power and control to present challenges to an open Internet environment.

A Tier 1 network, for example, can charge a major content delivery network (CDN) a premium to access its network. This is because the CDN may deliver considerable content traffic into a network. The Tier 1 network believes they should receive additional compensation to fund the capacity to support content distribution. This premium may be more money than the CDN is willing or able to pay. In turn, if the CDN doesn’t comply, Tier 1 can ultimately refuse the CDN access to its network and cut its consumer’s access to the CDN’s content. This applies whether consumers access Tier 1 directly or if Tier 1 is the middle network between consumers and their Tier 2 or 3 networks.

A voice-over-Internet Protocol Company underscores another potential conflict of interest. Let’s say you’re a consumer of a Tier 1 network, a telephone company, and you want to use a VoIP company, such as Vonage. But Tier 1 doesn’t want the VoIP company to compete with its network and instead use its telephone product, so Tier 1 may prevent you from using your VoIP company. In other words, Tier 1, in developing its commercial VoIP product, can prevent non-owned VoIP traffic from passing through its network.

While Tier 1 networks hold value for much of the Internet, they impose many political and financial barriers on smaller networks, content delivery networks, emerging VoIP companies, online gaming businesses, B2B and online commerce, and entertainment websites. Internet Service Providers (ISPs), CDNs, VoIPs, and many others need an alternative method of communicating with each other – one providing tools to redesign how relationships and interconnections bond the US Internet content and access communities.

Breaking Down Barriers

One objective in building efficiency and the performance needed to deliver content resources to end users is to flatten existing Internet architecture. Whenever possible, you eliminate the Tier 1 Internet networks from participating in providing content resources to end-users.

How do we accomplish this task? One option is through the development and use of commercial Internet Exchange Points (IXPs). Many Internet-enabled networks and content resources meet in this location to interconnect as peers.

According to Wikipedia, an IXP is a physical infrastructure that allows different Internet Service Providers to exchange Internet traffic between their networks (autonomous systems) using mutual peering agreements, allowing traffic to be exchanged without cost. An IXP is a physical switch in a carrier hotel or data center that can connect thousands of networks, whether content providers or network providers.

Today at the Any2 Exchange, an IXP built within One Wilshire, on a single switch, 125 different networks interconnect and can freely pass traffic amongst each other without going to a Tier 1 for routing. Members pay a small annual fee to the Any2 Exchange for the one-time connection and then benefit from the “peering” relationships among members of the Internet exchange.

Akamai, for example, a prominent content distribution network company that delivers streaming media and movies on demand, can connect to American Internet Services, a Tier 3 ISP in San Diego, Calif., through a local or regional Internet exchange point such as the Any2 Exchange, the Palo Alto Internet Exchange (PAIX), or other significant exchange points operated by data centers and carrier hotels.

When an American Internet Services user wants to watch a movie available on Akamai’s content delivery network, the data is passed directly from Akamai to American Internet Services – and subsequently to the end-user – without transiting any other network. Not only has the goal of being less reliant on Tier 1 been achieved, but the performance is superior because there are no “hops” between the CSP and ISP. Anytime you’re able to cut out the transit network, you increase the end-user experience. Plus, it’s more economical, as in most cases, the CDN and ISP have no financial settlement for data exchanged.

The European IXP model, which is more mature and robust than the US model, highlights the critical function of IXPs and how an exchange point alone can help influence the net neutrality debate. In Europe, Internet service providers and content delivery networks look to the IXP as their first connection point, and if the IXP doesn’t have what they’re looking for, they will only go to a Tier 1 or large Tier 2. Americans, on the other hand, partially due to geographic size

European IXP traffic grew 11.05%, compared to America’s rate of 7.44%, according to the European Internet Exchange Association in August 2007. This can be attributed partly to greater member density in Europe – the London Internet Exchange/LINX has more than 275 members – where the larger the addressable community, the larger the traffic exchanged and the more the members want to get involved. After all, the network effect (exponential growth of a community) and the “Law of Plentitude” (the idea that once an addressable or social community reaches participation by 15% or greater of a total community, it becomes a risk to not participate in the emerging community) motivate European companies to use IXPs.

Additionally, Europeans generally have lower entry costs for participation, giving companies every reason to join the IXP-enabled peering community. If one were to buy access to 275 networks through Tier 1, the cost would be astronomical, but one can access 275 networks for a nominal fee through a single connection to LINX. This is why European companies rely on IXPs 60% of the time and only look to Tier 1 or 2 networks 40%.

In contrast, American ISPs typically look to larger wholesale and Internet transit providers first and then consider reducing operational expenses via an IXP as a second priority. American ISP companies use IXPs at a meager 15% rate, looking to larger wholesale and transit Tier 1 or Tier 2 networks 85% of the time. Still, recent American IXP traffic growth exceeds other regions, such as Japan (+5.85% in August) and the rest of Asia (+4.3% in August), which we believe results from increased price pressure on the American IXP industry. Newer IXPs, such as the Any2 Exchange, have significantly lowered entry costs, forcing others to follow suit and encourage more networks to participate. As entry costs to IXPs continue to fall, participation in IXPs will become more common and attractive to all access and CDN networks.

What can we learn from the European model? Participation in an IXP can increase performance, lower operational costs and expenses, and add redundancy and disaster recovery capacity to even the smallest networks. But most importantly, companies’ independence from Tier 1s through the collective bargaining of the exchange points puts them in a stronger position to deal with large networks than our work allows for in the US, where the vast majority of people have their primary Internet connections through a large Tier 2 or Tier 1 network provider.

Adding to the Cause

Today’s content-rich Internet is just a prelude to the future content, media, applications, and services soon to be developed and deployed. It’s no wonder that in large IXPs, such as the Amsterdam Internet Exchange (AMS-IX), several content delivery networks are already using bundled 10Gbps ports, clearly showing end users’ insatiable demand for high bandwidth applications and services. High-definition Internet TV (IPTV), massive online interactive gaming, video on demand (VOD), and feature-rich communications (video conferencing) are just a few examples of Internet-enabled applications contributing to the heightened demand.

For American ISPs that pay anywhere from $ 20- to $40/Mbps when connecting to Tier 1 and Tier 2 networks, the cost of delivering applications and services to end-users who require much more extensive network and bandwidth resources is one of the obstacles that must be overcome. But without broad participation in IXPs, access networks have a challenging future, as do content providers who will find that the cost of delivery to end users becomes much more expensive if Tier 1 and Tier 2 networks increase the cost of delivering wholesale and end user Internet traffic.

What Can the American Internet-Connected Community Do?

Whether through price increases or monopolistic practices, the largest networks are currently writing the rules for a global Internet product. They gradually merge and acquire competition, reinforcing their influence in wholesale and transit network share and presence. Opportunities for network peering decrease with each merger.

Carrier hotels and large data centers in the US can support positive change in the Internet peering community by creating or supporting open and low-cost Internet Exchange points promoting network looking and content delivery to all networks.

Reducing barriers to entry and the cost of wholesale or transit networks will allow Internet network and content companies to focus on delivering network access and services, with the ultimate winner being end users who will enjoy a lower-cost, higher-performance Internet experience.