9 Pages Posted: 2 Apr 2012 Last revised: 24 Aug 2012
Date Written: March 27, 2012
The market arrangements negotiated between Internet operators to interconnect at private or shared exchange points are a critical form of privatized global governance necessary for the Internet to remain operational, secure, and technically optimized. Questions about introducing regulatory oversight of this interconnection have always been present, whether to incentivize interconnection or mediate equitable payment structures for the exchange of traffic between network operators. Recently, the European Telecommunications Network Operators’ Association submitted a proposal in advance of the ITU’s World Conference on International Telecommunications calling for nation state involvement in ‘facilitating’ interconnection and the prospect of compensation between providers based on ‘sending party network pays.’ This later suggestion would amount to a content tax whereby companies such as Apple, Google, Netflix, and the BBC would pay a network operator when its customers choose to download content from these sites. Rather than content being universally accessible, content providers would have to decide whether to allow access to their content in parts of the world imposing this levy.
Interconnection regulation would also affect Internet infrastructure and, in particular, the financial viability and growth of Internet Exchange Points (IXPs) in emerging markets. These shared interconnection sites play a critical role in emerging markets by bringing content closer to users, promoting local peering connectivity among regional operators, reducing interconnection costs, and reducing the dependency of local connectivity on foreign exchange points. Drawing from data on the global state of peering requirements for settlement-free peering, industry trends toward flattening interconnection configurations, and data on the global distribution of IXPs, this paper explains the increasing economic and technical importance of IXPs to local geographies, examines how they are emerging sites of Internet governance power in areas like critical infrastructure protection and national economic competitiveness, and explains several ways in which regulating interconnection would provide economic disincentives for the further development of IXPs in emerging markets.
Keywords: Internet governance, Internet policy, Internet Exchange Points, Interconnection, Peering
Suggested Citation: Suggested Citation
DeNardis, Laura, Governance at the Internet's Core: The Geopolitics of Interconnection and Internet Exchange Points (IXPs) in Emerging Markets (March 27, 2012). 2012 TRPC. Available at SSRN: https://ssrn.com/abstract=2029715 or http://dx.doi.org/10.2139/ssrn.2029715
By David Clark