[kictanet] Day 3 of 10:-IGF Discussions, Internet Interconnection Charges

Wed Aug 13 21:36:52 EAT 2008

Dear Mwende and Walu,

This is an interesting discourse and would like to throw another twist to
it. How necessary is international bandwidth to us? Suppose we had our
content issues in order and have our own facebook, yahoo, msn, skype etc
would it be necessary to buy international bandwidth? In other words can we
create our own local internet? Should we put policies in place that
encourage "inward bound" internet traffic that will utilize local
infrastructure and bandwidth as opposed to "outword bound" that is dependent
on international links?

Kindest Regards

Harry 

From: kictanet-bounces+harry=africanedevelopment.org at lists.kictanet.or.ke
[mailto:kictanet-bounces+harry=africanedevelopment.org at lists.kictanet.or.ke]
On Behalf Of mwende njiraini
Sent: Wednesday, August 13, 2008 5:04 PM
To: harry at africanedevelopment.org
Cc: KICTAnet ICT Policy Discussions
Subject: Re: [kictanet] Day 3 of 10:-IGF Discussions, Internet
Interconnection Charges

In traditional telephony call termination revenues are shared between
operators and are based on negotiated interconnection rates, in a regulated
environment, rather than the size and number of subscribers on the network.
(I stand to be corrected) Developing countries for a long time have
benefited from revenues generated from this international settlement scheme.
However, these revenues are rapidly being eroded by VoIP, which is
encouraged by 'loosely regulated' flat rate pricing of internet bandwidth.
The issue internet interconnection is based on the fact that international
ISPs have no incentive to enter shared-cost peering with ISPs developing
countries thus forcing them to incur the full cost of transmitting
international traffic.  What incentives need to be put in place to encourage
shared-cost peering?  Content development?  

There is raging debate on "network neutrality"; with network operators
seeking to price network access on the basis of utilization in a bid to
manage network congestion.  In the US, for example the recent Comcast case
has resulted in the regulator, FCC, ruling that Comcast 'discriminatory'
network management practices were illegal.  To overcome the challenge of
network congestion several proposals have been made including the
introduction of bandwidth metered services.  Vint Cerf, Google's chief
internet evangelist, has proposed that ISPs should "introduce transmission
caps allowing users to purchase access to the Internet at a given minimum
data rate, which would be guaranteed even during times of congestion."  Net
neutrality is definitely an issue we may need to consider with reference to
the current developments in national and international fibre optic projects.

References:

 <http://news.cnet.com/8301-1023_3-10007079-93.html>
http://news.cnet.com/8301-1023_3-10007079-93.html

Regards

Mwende

Disclaimer: Comments are author's own.

On 8/13/08, John Walubengo <jwalu at yahoo.com> wrote: 

Plse feel free to belatedly contribute on Day 1 or 2 themes, jst remember to
pick the correct subject line.  Meanwhile today we should discuss one of IG
issues that touch squarely on the retail cost of Internet Service in
developing countries- the Internet Interconnection Charges (IIC, in short)

This issue is fairly complex and explosive but we could try and understand
if we used a simplified model for Mobile Phone Interconnection Charges and
Relationships.  Consider mobile phone company, X with 8million customers and
mobile phone company, Y with 2 million customers.   Each company is supposed
to compensate (pay) the other for terminating calls originating from the
other. In such a relationship, the bigger company X, can chose to dictate
how much the smaller company, Y pays it to terminate the 'Y' calls to its
bigger 'X' network/customers.

This is losely similar to what is called Transit relationship on the
Internet.  The big internet networks (Tier 1 and 2 Internet Backbone
Providers) in US/Europe get to dictate how much the smaller networks in
developing countries need to pay in order to terminate their internet
requests for email, web, dns, voip and other services into their Network.
Even our much celebrated TEAMS, EASsy and other projects cannot escape these
Transit Interconnection Costs. Ofcourse if you do not like their
Interconnection Charges you are free to take a walk into nowhere (read: stay
offline).

Another relationship does exist, the Peer-to-Peer relationship which is
equivalent to Mobile phone company Y and company X both having equal or
similar number of customers/value e.g. 5million each. In such a
relationship, the two Internet Backbone/Service providers chose NOT to
charge each other anything. Traffic between the two is exchanged
reciprically for free but below each of this big Networks are the smaller
networks (read African networks), that must pay Transit Charges. Put
bluntly, Africa and other developing countries are subsidizing Internet
Costs for the rich nations in the North.

Many studies have been carried out to get us out of this fix such as the
Halfway-propositions, the ICAIS, etc but todate the status quo remains.  The
standard response has remained 'If it current interconnection models are
working, why should you try and fix them?'

1 day for comments, corrections and/or proposals on this theme.

walu.

Ref: for some of the Studies:
International Charging Arrangements for Internet Services, Module I, ICAIS,
p.3
http://www.tmdenton.com/pub/reports/icais_mod1_ch1.pdf

The Half-Way Proposition.
http://www.balancingact-africa.com/news/back/balancing-act_130.html

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