OECD 2012 report on Internet Traffic Exchange Bill Woodcock Dennis Weller
Latest in a Five-Year Periodic Series OECD Directorate for Science, Technology and Industry Committee for Information, Computer and Communications Policy Working Party on Communication Infrastructures and Services Policy Internet Traffic Exchange: Market Developments and Policy Challenges Intended to provide advice on Internet market conditions to telecommunications regulators in market economies.
Main Findings: The Good News Where competition has been allowed in the Internet market, it has produced low prices and high quality of service, while attracting high levels of investment and innovation. The Internet offers higher reliability and performance than the voice network, at a cost five orders of magnitude lower. Uniform market terms have prevailed universally, without regulatory intervention.
Main Findings: The Bad News A significant risk remains that the inefficiencies of the telephone market and regulatory structure will be imposed on the Internet. Approximately half of all countries still rely exclusively on imported Internet bandwidth, with no domestic production facilities. The economic downturn of 2001 brought basic optoelectronic physics research to a halt, starving the pipeline that produces faster network interfaces.
Internet Bandwidth Production Occurs in Internet Exchange Points (IXPs), where the cost is near zero. Bandwidth is transported from IXPs to customers by Internet Service Providers (ISPs) This transport service typically costs between USD 1-100 / mbps / month, depending upon distance from major IXPs.
Today, only 50% of countries have IXPs. The remainder import all of their bandwidth. https://pch.net/ixpdir/summary
The largest net exporters, and largest consumers, of Internet bandwidth are large developed economies. https://pch.net/ixpdir/summary/growth
Global Distribution of IXPs
Uniformity of Interconnection Terms Unlike the 20th century telephone network, the terms of interconnection in the Internet are remarkably uniform. 99.51% of interconnections required no written contract, and 99.73% had symmetric terms. This uniformity is global, and extends equally to non-service-provider networks.
Governing Law of Agreements 1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 US
CA
JP
SG
UK
AT
SE
NL
IE
NZ
TR
IT
AU
PH
ID
PL
BG
UA
RO
Probability of selection as a country of governing law, ten most-likely and ten least-likely countries
RU
Degree of Interconnection 1000 Hong Kong MLPA
Warsaw MLPA
Frankfurt MLPA
100
10
1
1
101 100
201 200
301 300
401 400
501 500
601 600
700
Distribution of number of networks (Y axis) with each quantity of interconnection partners (X axis)
Most networks have small numbers of interconnection partners. Of 4,331 networks surveyed, 62% have ten or fewer interconnection agreements, and only twelve of the represented networks have more than 700 interconnection agreements, yet this sparse degree of interconnection yields universal reachability.
Incumbent Monopolies Avoid Interconnection 1,000,000,000 100,000,000 10,000,000 1,000,000 100,000 10,000 1,000 100 10 1
0
100
200
300
400
500
600
Number of advertised IPv4 addresses (Y axis) over number of interconnection partners (X axis) per carrier
700
Prevalence of IPv6 4000
3000
2000
1000
0 2003
2004
2005
2006
2007
2009
2009
2010
Number of autonomous systems advertising IPv6 addresses in the global routing table (Y axis) over time (X axis)
Effect of Research Underinvestment 10,000,000 10 tbps
115% annual growth (exponential)
1 tbps 1,000,000 100,000 100 gbps 10 gbps 10,000 500mbps/month growth (linear)
11,000 gbps 100 mbps 100 10 mbps 10 1 Jan-92 92 Dec-93 93 94 Jan-96 95 96 Dec-97 97 98 Jan-00 99 00 Dec-01 01 02 Jan-04 03 04 Dec-05 05 06 Jan-08 07 08 Dec-09 09 10 Jan-12 11 Optoelectronic interface speeds used in the core of the Internet (Y axis) by year of deployment (X axis)
Inefficiency of Meshed Switches 80 gbps 80 288 ports/switch 325 ISPs
70 gbps 70 60 gbps 60 50 gbps 50 40 gbps 40 30 gbps 30 20 gbps 20
48 ports/switch 25 ISPs
10 gbps 10 00 1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Available bandwidth (Y axis) per number of meshed switches (X axis) for two combinations of switch size and number of participants
Minimization of Average Distance
Progression of largest European exchange toward the center of Europe population density
Absolute Growth in Production 1 Tb 1000000000
100 Gb 100000000
10 Gb 10000000
1 Gb 1000000 DE NL GB US JP RU SE PL HU CZ UA ES FR CN IT CA RO BR SK KR CH AT BE NO FI DK IS GR IN PT
Annualized absolute growth in domestic Internet bandwidth production, top thirty countries, 2005–2010
Percentage Growth in Production 10,000% 10000
1,000% 1000
100% 100
10% 10
1% 1 ZA UG EG CI KE TZ SZ MZ
IN AU BD CN JP KH KR NP NZ
RU PL UA LU DE RO SK CZ IE GR GB HR CH AT IS NL HU BE SE IT NO IL PT FI DK ES SI FR
BR CO AR
CA US
Africa
Asia-Pacific
Europe
Latin America
North America
Annualized percentage growth in domestic Internet bandwidth production, grouped by region, 2005–2010
Average Distance from Production 12,000 km 12000 11,000 km 10,000 km 10000 9,000 km 8,000 km 8000 7,000 km 6,000 km 6000 5,000 km 4,000 km 4000 3,000 km 2,000 km 2000 1,000 km 0 KE AU HK7 ID JP NZ 14 SG Africa Asia-Pacific
42 RU SE SK 49UK CA 56 AT BG21CH CZ DE 28 DK FR IE IT35NL NO PT RO US Europe North America
Average distance of participants from IXPs within each country, grouped by region
Regional Routing Announcements 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26
Degree of overlap in announced prefixes (Y axis) by number of geographically distinct peering sessions (X axis) for five hundred unique AS-pairs
IPv4 Availability as a Limiting Factor 31
15
63
127
255
10
5
0 0
25 41.1 50
75 125 150164.4 175 82.2 100 123.3
216 205.5
246.6
275 287.7
325 379 328.8337 369.9
Distribution of Internet exchange points (Y axis) by number of participants (X axis)
411 411.0
Questions? Bill Woodcock woody@pch.net