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

Thu Aug 14 09:59:58 EAT 2008

Dear Harry,

The Internet is a global network and its value is in provision of
comprehensive end-to-end universal connectivity to end-users.  Unlike the
public switched telephone network (PSTN) where operators were obligated to
interconnect, firms providing Internet infrastructure and services are
driven to interconnect by the economic force of positive
externalities/effects (http://en.wikipedia.org/wiki/Network_externality).  As
a result the internet now has a global spread leading to the promotion of
economic growth, expanded social opportunities, improved process efficiency
and responsiveness of institutions and markets, ease of access to
information, resources and services, etc.

Based on the forgoing argument, it would not be wise to have an entirely
'local' internet.  However, there are countries such as China and Russia
that have threatened to create their own separate internet however such
moves have been resisted based on the risk of "international isolation and
government censorship" (http://blog.foreignpolicy.com/node/7563 and
http://www.pcpro.co.uk/news/84378/china-to-split-the-internet.html).

Regards

Mwende

Disclaimer: The comments are the author's own.

On 8/13/08, Harry Hare <harry at africanedevelopment.org> wrote:
>
>  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@
> lists.kictanet.or.ke [mailto:kictanet-bounces+harry<kictanet-bounces%2Bharry>
> =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
>
> 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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