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Domestic Internet Exchange is Good in Theory, but How Does it Fare in Practice?

by Umair Rasheed

Short term benefits of internet exchange point may not be significant but observers believe it will aid a burgeoning IT-based e-commerce sector

The Pakistan Telecommunication Authority and the Ministry of Information Technology have recently inaugurated the first internet exchange point (IXP) in the country. The facility will let internet service providers (ISPs) exchange domestic traffic without needing to route it through a foreign circuit – currently provided by either the Pakistan Telecommunications Company Limited (PTCL) or the Transworld Associates Limited (TAL).

Media reports on the development have mentioned that it will yield in lower latency rates for domestic internet traffic. Experts have told TR Pakistan that because domestic traffic is a very small fraction of the total traffic in the country the improvement in latency rate will not be very significant for now.

Based on data collected from one of the two long distance and international (LDIs) license holders serving ISPs across the country, Salman Ansari, former advisor to the Ministry of Information Technology, estimates that the total internet traffic in the country is around 700 Gigabits (Gbits). Of this, domestic traffic is no more than three Gbits – 0.43 percent. “Latency rates just for this small segment will benefit from the presence of an IXP,” he says.

With domestic traffic remaining a small share of total internet traffic, the exchange point is not likely to immediately yield in huge cost savings for ISPs either.

Read more: Pakistani Internet Bandwidth to Increase by 24Tbps

Jamal Nasir, chief executive officer of Qubee, feels that establishment of the country’s first IXP is a delayed initiative. “This should have happened in 1998,” he says. His company has not yet joined the IXP, he says. Over the last two decades, the cost of routing internet traffic through foreign circuits has declined exponentially. In 1990s, a two Megabits (Mbits) foreign circuit costed around $200,000 per month. Now, its cost has come down to a mere ten to fifteen dollars. In fact, he says, the cost of maintaining local circuits is now higher than that of foreign circuits.

However, Ansari believes that the cost of data and internet services can still be brought down. The total connectable bandwidth available in the country is nearly 80 Terrabits (Tbits). Reduction in cost can help use this capacity to its full potential and pass on the benefits to the end user, he says.

Regarding the possibility of improved customer experience of internet services, Nasir says the ISPs are already providing most value-added services available in the market. “I don’t see how an IXP will yield in better customer experience,” he says. ISPs and the two LDIs are maintaining cache-in servers to locally host content of popular video streaming websites like Youtube. This has already ended the need for routing traffic of these websites through foreign circuits.

Looked at from a different perspective, however, the presence of an IXP may come across “as a step in the right direction.”

Ihsan Ullah Qazi, an assistant professor of Computer Science at LUMS, says an information technology-based entrepreneurial services sector is gaining a foothold in the country. Some of these companies like PakWheels and Zameen are already generating a lot of traffic. Almost all of this is based inside the country but it may not be reflected in domestic traffic because for now these companies are hosting their content abroad. Qazi explains that cloud infrastructure provided by big international companies like Amazon and Google is more secure and reliable for the purpose. “Foreign companies offer pay as you go service suitable for those needing to host big volumes of data and they also get guarantees that data will be available around the clock and won’t be lost,” he says. Additional space for storing more data can be arranged in the order of minutes at a cloud-based infrastructure.

Traffic served at the exchange during test run is in the range of 2 and 2.4 Gbps

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Qazi, part of a working group formed by the PTA to highlight possible advantages of the IXP, hopes that the presence of an exchange point will lay the groundwork for building a cloud-based data storage infrastructure in the country in coming years.”It is all the more likely if the current trend in IT-based e-commerce services continues,” he says.

Qazi says that direct peering of ISPs through the exchange may lead to some loss of revenue for LDI companies (PTCL and Transworld). However, these companies will still benefit from the overall improvement brought into the system with the presence of an internet exchange.

He says exchange of internet traffic will entail no financial outlay for ISPs in situations where traffic of similar volume is to be exchanged. “Financial agreements will be required only where there is an asymmetry in volumes.”


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