CIRA calls for more exchanges to improve Internet speed, costs

Canadian Internet service providers (ISPs) and network operators should increase the number of domestic Internet exchange points to improve the speed and cost of accessing the Internet in Canada, a new white paper by the Canadian Internet Registration Authority (CIRA) said. Typically found in large, urban centres with multiple ISPs, the exchange points allow ISPs and companies that operate their own networks, such as Google Inc. or Microsoft Corp., to connect to the Internet and exchange traffic through a single, centrally located hub. A traffic exchange, known as “peering,” allows Internet traffic on one ISP’s network to connect with other networks and ISPs. In a white paper released this month titled “Toward Efficiencies in Canadian Internet Traffic Exchange,” CIRA said Internet access in Canada is “heavily and unnecessarily dependent” on foreign infrastructure due to a limited number of exchange points in Canada and a large amount of Canadian traffic sent to American exchanges for peering. “This dependence imposes significant burdens upon Canadian Internet users,” said the CIRA-commissioned paper, authored by Bill Woodcock, research director for nonprofit research centre Packet Clearing House, and Benjamin Edelman, an associate professor at Harvard Business School. According to the paper, those burdens include higher Internet prices, slower network speeds, and Canadian Internet data that “is subject to examination by companies and government authorities” in other countries. It said many networks incur higher operating costs due to the need to send subscriber data over “transit” backhaul networks to foreign destinations and that those ISPs often turn to “lower-speed” transit links to save costs. “By increasing the use of peering and reducing dependence on transit, a network can retain greater profit, offer its customers lower prices, or reinvest in faster growth—and often it can partake of all these benefits,” the white paper said. Domestic traffic that originates and ends in Canada and does not travel to other jurisdictions for peering and avoids falling under the scrutiny of foreign laws, regulations, and snooping, it said. The paper said there are now only two “operational” exchange points in Canada—Toronto’s TorIX exchange and Ottawa’s smaller OttiX—and that there are plans under way for three more in Winnipeg, Calgary and Montreal. With one exchange point for every 17 million people in Canada, the report said, Canada has “three to thirty times fewer than other similarly developed nations.” In a telephone interview with The Wire Report, Byron Holland, CIRA’s president and CEO, said Canada is “woefully behind” many other countries on domestic exchange points. He said part of the reason for this “dearth” of Canadian exchanges is the “long-standing telco infrastructure” in Canada that sends Internet traffic to the U.S. along a north-south backhaul pipe as opposed to east-west. “The ecosystem is just used to going north-south and exchanging traffic in the U.S.,” he said. Holland said most Canadian network operators would see “significant” cost benefits from routing traffic through Canadian exchanges, at which networks typically agree to switch traffic for free. He said this represents a “very different economic model” than the “old telco methodology” by which network operators charge one other for each byte of data exchanged. “There’s a pricing difference that is significant, and there’s a performance difference that’s significant,” he said. The CIRA white paper said exchange points can start operating with as little as $40,000 in startup costs. It said exchanges “typically cost less than $100,000 to establish, and return on investment can be seen in as little as a few days.” Holland said CIRA would like to see Canadian network operators come together to build up to eight more exchanges in major urban centres such as Vancouver, Quebec City, Edmonton and Windsor, Ont. CIRA, which manages Canadian .ca web domains, would like to see “about a dozen” more exchanges in smaller city centres such as Sudbury, Ont., Regina, and Saskatoon, he said. “I think there’s a lot of room in smaller, secondary centres, the Sudburys of Canada that have 100,000 or 200,000 folks,” he said. “As long as there’s three or more ISPs that can exchange traffic, it sill makes sense.” Holland said a number of ISPs and network operators in Canada have signalled a “latent interest” in the development of more Canadian exchange points since CIRA first raised the subject at a Canadian ISP conference in November 2011. For the most part, he said, interest emanated from medium and small-sized ISPs and other network operators who want to provide Canadian Internet users with faster access to websites and online services. He said there is not yet interest from Canada’s five largest ISPs, BCE Inc., Rogers Communications Inc., Shaw Communications Inc., Telus Corp. and Videotron (a Quebecor Media Inc. subsidiary), but he expects interest to grow. Those incumbent telcos only offer limited peering at TorIX to other ISPs of similar size, he said. “You’ll see somebody like Rogers listed there, but they won’t peer with all the ISPs. They’ll typically make a private deal with one or two,” he said. According to the TorIX website, Rogers and Shaw offer “conditional” peering at the Toronto exchange while Videotron offers peering but is “not accepting” applications for new peering partnerships. Neither Bell nor Telus are listed as having any peering partnerships at TorIX. One small ISP operator said in a background interview that Canada's incumbent cablecos have started extending peering services in Toronto to more smaller competitors. “It’s mainly been the incumbent telcos that have been reluctant to peer,” said the person, who requested anonymity due to a business relationship with the country’s largest providers. Jean-Francois Mezei, a consultant with Montreal firm Vaxination Informatique who launched the original appeal to cabinet to challenge the CRTC decision approving Bell's wholesale rates for usage-based billing, said Bell puts conditions on peer services in Canada. The incumbent telco will peer with other Canadian ISPs if they use Bell’s wholesale transit service to connect to an exchange point, Mezei said. The CIRA white paper said it blames in part “the limited competition in Canadian long-haul and international data communications” for the “scarcity” of exchange points in Canada. In an emailed statement, Bell spokeswoman Jacqueline Michelis said the company works with other network operators to reach peering agreements wherever possible. “Bell has many connections to a variety of networks in Canada but, while we wholesale Internet service to a large number of small and large ISPs across Canada, IXP is not part of our focus,” Michelis said. Brent Allison, vice-president, of partner solutions at Telus, said in an emailed statement that the company exchanges traffic with other carriers in a variety of places so that it does not currently require participation at TorIX. “We have invested in a significant base of inter-connect agreements with other carriers throughout North America, but it’s not appropriate for us to discuss the specifics of those arrangements in public,” Allison said. “We use IXPs where it makes good business sense for us and our customers. We are more than happy to peer or pay for Internet transit with those who can provide meaningful improvements to the experience of our TELUS customers.” nkyonka@thewirereport.ca

CIRA calls for more exchanges to improve Internet speed, costs

News | September 28, 2012

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