Financial Daily from THE HINDU group of publications
Wednesday, Dec 18, 2002
Casting a wide Net
DESPITE the great promise that the Internet "revolution" held in the country, its influence has so long been restricted only to the four major metros and a couple of other big cities. While the current Internet subscriber base is 3.3 million, the planned projection by the Department of Telecommunication (DoT) is that by the end of 2007, there will be 230 million users.
Fat chance, you may say. More so because as the days roll by, more and more Internet Service Providers (ISPs) are surrendering their licences. There are around 450 ISPs who have been issued licences to offer Internet services, out of which over 160 only are operational. However, the DoT seems more confident, and if its policy actions are anything to go by, it does seem to be serious.
Its approval for setting up the National Internet Exchange (NIXI), for one, is expected to result in various tangible benefits for Internet users as well as for the country as a whole. The cost of Internet connectivity and bandwidth will be reduced and the quality of services improved, resulting in the spread of the Internet in the country, in addition to increased customer satisfaction.
The NIXI will also result in better Internet infrastructure for the country and saving of foreign exchange on international bandwidth. This, in turn, will lead to increased Internet penetration and overall development of e-commerce and the economy.
In fact, the Telecom Regulatory Authority of India (TRAI) should be complimented for this endeavour. The Authority had, based on the report of a Task Force, recommended the introduction of the NIXI.
Getting to the nitty-gritty
What exactly is an Internet Exchange?
An Internet Exchange is a place for Internet Service Providers to Peer and Exchange IP traffic with each other at the national level. This will involve setting up Internet exchange points (IXPs) in various cities. An IXP is a single physical network infrastructure, (often an Ethernet local area network) to which many ISPs can connect. Any ISP that is connected to the IXP can exchange traffic with any of the other ISPs connected to the IXP, using a single physical connection to the IXP, thus overcoming the scalability problem of individual interconnections.
Also, by enabling traffic to take a more direct route between many ISP networks and routing the domestic traffic within the country, an IXP can improve the efficiency of the Internet and reduce the latency, resulting in better service for the end-user and a lower access cost.
With the exception of a small number of big ISPs having their own gateways, ISPs generally buy International Internet access (often called `upstream connectivity') from one or more of the bigger ISPs. Due to the size of these networks, and their comprehensive interconnection with other networks, they can send and deliver Internet traffic to any network connected to the Internet; i.e. they have connectivity to the global Internet. It is this global connectivity that other ISPs buy and in turn sell access to the global Internet to their customers.
In a situation where traffic is meant to travel between a customer of one ISP to a customer of another ISP within the country, both ISPs have to pay for upstream connectivity required to deliver and receive this traffic, respectively. This is also the case even when both ISPs use the same upstream connectivity provider. Consequently, even for intra-India traffic, a lot of international bandwidth is consumed, which can be avoided resulting in decongestion of international upstream connectivity. Also, this will reduce outflow of foreign exchange as payment to international carriers for usage of their bandwidth for upstream connectivity by Indian ISPs.
In addition to reducing cost as we have seen above, in case two ISP networks were domestically connected to each other, it will also reduce the number of networks (`hops') the traffic has to traverse, resulting in less delays and reduced packet loss, and hence, better quality of service. Whilst upstream costs are reduced, there is a cost involved in providing physical connection between the two ISPs' networks, which must be considered while estimating the savings by having domestic interconnection between ISPs.
As noted by the TRAI, the advantages of IXPs are many. The immediate benefits will be improved quality of service to the consumer by reducing delays and data loss, saving in foreign exchange expenditure on international bandwidth and cost reduction for Internet access services. In the long run, this will promote the use of the Internet for business, boost e-governance initiatives, enhance the reach of the Net through better access and increase the presence and visibility of ISPs.
It will also provide the necessary "confidence" to the market, indicating a commitment from the Government as well as Industry towards increased usage of the Internet, providing guidance to, `new comers' or `looking-to-expand ISPs." While the DoT is yet to work out the modalities of the NIXI, by giving its approval, it sure has held out promise for the growth of the Internet in the country.
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