This document discusses Internet exchange points (IXPs) and their role in internet infrastructure. It notes that IXPs allow different networks to interconnect and exchange traffic, reducing costs. While most IXPs operate neutrally, some are influenced by governments seeking to control internet access. The document also discusses consolidation among backbone and last-mile providers. It provides data on the major IXPs in the US and notes increasing vertical integration among content providers, data centers, and networks. In conclusion, it suggests ensuring IXPs continue enabling market forces while addressing governance and competition challenges.

1. IXPs and Competition Policy
Prof. David Opderbeck
Seton Hall University Law School
© 2022 David W. Opderbeck
Creative Commons Attribution / Share-Alike

2. Net Neutrality Lingo
Backbone
Providers
Edge Providers
ISP /
Interconnection
Agreements
Wireless Carrier
Cable Provider
ISP
End User
No:
• Throttling
• Blocking
• Paid
Prioritization
Interconnection
Agreements
Last Mile

3. Current Focus of EU and U.S. Antitrust
Backbone
Providers
Edge Providers
ISP /
Interconnection
Agreements
Wireless Carrier
Cable Provider
ISP
End User
Interconnection
Agreements
Last Mile
Esp. GAMAM (Google, Apple,
Meta (FB), Amazon, Microsoft)
for the New Brandeis Movement

4. Very Little Discussion. . .
Backbone
Providers
Edge Providers
ISP /
Interconnection
Agreements
Wireless Carrier
Cable Provider
ISP
End User
Interconnection
Agreements
Last Mile

5. Consolidation: Access Provision and Transit
• Transit: international transit is dominated by a small
number of “Tier 1” providers
• Tier 1 (“backbone”) network: “transit-free” -- can reach every
other network on the Internet without paying transit or peering
fees
• Transit fee – paid to a third party to carry traffic between networks
• Peering fee – paid directly to the network with which traffic is being
exchanged
• Tier 2 network – peers for free with some networks but must pay
transit or peering fees with others
• Tier 3 network – does not peer for free with any networks;
always must pay transit or peering fees
• Lack of fixed-line access in many developing countries
• Importance of mobile: access to spectrum

6. Consolidation: Access Provision and Transit
IMG SRC = By User:Ludovic.ferre - Internet Connectivity Distribution&Core.svg, CC BY-SA 3.0,
https://commons.wikimedia.org/w/index.php?curid=10030716

7. Consolidation: Access Provision and Transit
• U.S. Internet Region Tier 1
• AT&T
• Verizon
• Sprint (Softbank Broadband)
• Century Link (Qwest)
• Level 3 (with Global Crossing now)
• NTT/Verio
• Cogent (maybe?)
• China Internet Region Tier 1
• China Telecom
• China Unicom (China Netcom)
SRC = https://drpeering.net/FAQ/Who-are-the-Tier-1-ISPs.php

8. Consolidation: Access Provision and Transit
Trend away from 3-tier model
towards Internet Exchange Points
(IXPs) and Content Delivery
Networks (CDNs)

9. IXPs
• “[P]hysical locations where different networks connect to exchange Internet traffic via common
switching infrastructures.” – ISOC Policy Brief
• Analogous to national and regional airport hubs exchanging passengers
• Vital part of global Internet infrastructure: “The impact of an IXP is dynamic and can be
instrumental in developing the local Internet ecosystem” – ISOC Policy Brief
• Investment in scalable highs speed / high bandwidth infrastructure decreases sunk costs of
local ISPs
• Economies of scale through aggregating traffic of multiple providers decreases operating costs
of local ISPs
• Common switching physical infrastructure / protocols facilitates scalable interconnection of
different localized networks
• Attractive to out-of-country service operators who can access local markets with a single
connection point

10. Consolidation: Access Provision and Transit
May be funded, e.g., through a
nonprofit consortium, government-
owned, university-sponsored,
operator-neutral for-profit,
association of unrelated networks,
other for-profit
IMG SRC = By John Arundel - Transferred from en.wikipedia to Commons., CC BY-SA 3.0,
https://commons.wikimedia.org/w/index.php?curid=82018011
The London IXP in Telehouse, Docklands, London

11. Consolidation: Access Provision and Transit
In the EU:
• Most IXPs are operated based on
neutrality concerning carriers, ISPs,
and co-location providers.
• Most IXPs prohibit themselves
from competing with the business
activities of member / customers
IMG SRC = By John Arundel - Transferred from en.wikipedia to Commons., CC BY-SA 3.0,
https://commons.wikimedia.org/w/index.php?curid=82018011
The London IXP in Telehouse, Docklands, London

12. But?
• Government run or influenced IXPs are used by
repressive regimes – e.g., Iran – to control their
national Internet connectivity and content
• Private IXPs operate on multiple models interacting
with existing peerage systems. Not all either in EU or
US observe neutrality / non-competition principles
• A feature, not a bug?
• Governance and accountability can be opaque
• Content providers increasingly peer with ISPs to
deliver the provider’s content to ISP’s customers –
the Edge bleeding into the Last Mile
• Enterprises are using IXPs for direct peering outside
the public Internet – cutting out the core

13. DE-Cix Whitepaper, “Beyond the Internet”

14. DE-Cix Whitepaper, “Beyond the Internet”

15. Consolidation?
• 145 total IXPs in the U.S.
• 5,496 total connections
• A few are highly specialized, e.g. NASA-AIX (NASA), ARIX (Amateur Radio Internet Exchange)
Data SRC = peeringdb.com
Entity Locations Total Connections % Total Connections
Any2 5 375 6.823144
BBIX 4 17 0.309316
CyrusOne 7 24 0.436681
DACS-IX 3 17 0.309316
DE-CIX 4 380 6.914119
Digital Realty 6 259 4.712518
Equinix 13 1519 27.63828
MegaIX 5 96 1.746725
MidwestIX 3 66 1.200873
NYIIX 3 253 4.603348
Total 3006 54.69432

16. Consolidation?
Data SRC = peeringdb.com
0
200
400
600
800
1000
1200
1400
1600
Any2 BBIX CyrusOne DACS-IX DE-CIX Digital Realty Equinix MegaIX MidwestIX NYIIX
Locations Total Connections

17. Data SRC = peeringdb.com
0
200
400
600
800
1000
1200
1400
1600
Any2 BBIX CyrusOne DACS-IX DE-CIX Digital Realty Equinix MegaIX MidwestIX NYIIX
Total Connections
CoreSite (Any2)

18. Consolidation: Access Provision and Transit
• CDN: network of geographically distributed proxy servers
and data centers that deliver content (including
applications, files, streaming media, etc.) to end users for
third parties
• Content delivered from servers nearest to the user or
based on other calculation of efficiency for delivery
• E.g., Google App engine, Amazon CloudFront, Akamai,
Verizon Media Platform
• Some providers investing in their own backbone
infrastructure, e.g., Google, Facebook, Amazon,
Microsoft overseas submarine cables
• Aspect of cloud computing infrastructure
IMG SRC = https://firstsiteguide.com/cdn-guide/;
ISOC Report

19. Tentative Thoughts: IXPs,
CDNs, and Patent Pools
• Don’t cramp the dynamic market-driven role of IXPs
• But – recognize the challenges IXPs and CDNs can
present for competition and Internet governance
• Vertical integration is now Cloud integration:
data centers, IXPs, last-mile ISPs
• Content providers, including the GAFAM, are
trying to eclipse Tier 2 Networks, and even Tier
1 Backbone providers, by peering through IXPs
and/or building CDNs
• Need more data on the market and the role of
network effects
• Need to consider civil liberties aspects of global
Internet governance

20. Tentative Thoughts: IXPs,
CDNs, and Patent Pools
• Concerning standards and agreements
among competitors, IXPs, and to a lesser
degree CDNs, look something like patent
pools
• FRAND terms for IXPs and CDNs, including
governance and access terms as well as fees?
• FRAND could include Network Neutrality
terms (throttling, paid prioritization, and
blocking) but should focus more on
governance, interconnection access,
transparency, and downstream competition