July 10, Via Electronic Submission. Ex parte

Transcription

1 Robert C. arber T&T Services, Inc. General ttorney th Street NW Ste 1000 Washington, D.C Phone: Fax: July 10, 2014 Via Electronic Submission Ex parte Ms. Marlene H. Dortch Secretary Federal Communications Commission th Street, SW Portals II, Room TW-325 Washington, DC Re: Connect merica Fund: Developing a Unified Intercarrier Compensation Regime; Protecting and Promoting the Open Internet, WC Docket 10-90, CC Docket No ; GN Docket No Dear Ms. Dortch: On July 8, 2014, ob Quinn, Mo Katibeh, Gary Phillips, Hank Hultquist, rent Olson, Philip owie and the undersigned of T&T met with FCC General Counsel Jon Sallet and the following members of FCC Staff: Stephanie Weiner and Hillary urchuk of OGC; Walter Johnston and Padma Krishnaswamy of OET; Paul LaFontaine and Robert Cannon of OSP; Matt DelNero, Eric Ralph, Tavi Carare, Claude iken, Matt Warner, Kristine Fargotstein and Melissa Kirkel (by phone) of WC; and Sagar Doshi of OCH. The purpose of the meeting was to discuss the Internet interconnection ecosystem. We explained how that ecosystem had developed without any regulation to handle all of the traffic exchanged on the global Internet and the many options available to edge providers to reach consumers and business. We also discussed the substantial cost implications of the exchange and carriage of Internet traffic that has become significantly out-of-balance. The attached presentation formed the basis of our discussion. Pursuant to section of the Commission s rules, this letter is being filed electronically with your office for inclusion in the public record of the above-referenced dockets. Please do not hesitate to contact me with any questions regarding this matter. Very truly yours, /s/ Robert C. arber Robert C. arber

2 T&T Ex Parte July 10, 2014 Page 2 ttachment cc: (w/ attachment) Jonathan Sallett Stephanie Weiner Hillary urchuk Walter Johnston Padma Krishnaswamy Paul LaFontaine Robert Cannon Matt DelNero Eric Ralph Tavi Carare Claude iken Matt Warner Kristine Fargotstein Melissa Kirkel Sagar Doshi

3 The Internet Interconnection Ecosystem July 8, 2014

4 Internet Interconnection asic methods in which Internet interconnection is achieved: Peering Internet Connectivity Transit On-net Only 2

5 Internet Interconnection: Peering Peering n arrangement where two networks (autonomous systems) voluntarily interconnect to exchange traffic between their customers. Commercially negotiated barter transaction parties perceived value of arrangement is equal Without exchange of payment not free; hot potato routing is the default Usually includes criteria to ensure arrangement is equitable, which may include: Interconnection locations, quantity and bandwidth Comparable geographic scope of network Traffic volume Traffic balance Traffic is limited to that exchanged between each party s customers Customer is broadly defined and includes: Consumer broadband Internet access service subscribers broadband Internet access service subscribers: small and large business Purchasers of Transit: s, content providers, Content Delivery s, es (Enterprise) 3

6 Internet Interconnection: Transit Transit Transit is a service whereby a network provides access to the entire Internet. Offered by backbone networks and s with extensive connectivity with other networks Commercially negotiated Market-based rates Various pricing models Can interconnect in as little as one location Many more interconnection location options than peering Purchasers include: s Content providers Content Delivery s es (Enterprise) 4

7 Internet Interconnection: On-net Only On-net Only On-net Only connectivity is an optional service whereby a network provides access to only its customers. Offered by networks of various sizes and scope Commercially negotiated Market-based rates Various pricing models More interconnection location options than peering Purchasers include content-heavy entities: Content Delivery s Content providers 5

8 Internet Interconnection: Peering Peering is an arrangement where two networks voluntarily interconnect to exchange traffic between their customers. Consumer DSL, FTTx Cable, Wireless Small or Large Small or Large Serves OTT video, gaming, application providers Peering Serves OTT video, gaming, application providers OTT video, gaming, applications etc. Content Provider Regional to Consumer and Regional to Consumer and 6 Internet ccess Service Transit Service

9 Internet Interconnection: Peering Multiple Peering rrangements C Content Provider Consumer Peering Content Provider Consumer 7 Internet ccess Service Transit Service D Content Provider

10 Consumer Internet Interconnection: Peering Peering rrangements Enable Connectivity Options There is no terminating monopoly since there are multiple paths to reach s customers and cannot impose a government authorized tariff. Peering C D F G 1. s peering arrangements provide content providers multiple networks to choose from to reach network s customers. Content providers can purchase transit from any network peered with (or services from a which purchases transit from any network peered with ). Content Provider E H 2. In addition, content providers can purchase transit from or utilize on-net only connectivity. 8

11 Internet Interconnection: Peering Peering arrangements are not limited to large networks. C Content Provider Consumer Peering Content Provider Consumer 9 Internet ccess Service Transit Service D Content Provider

12 Internet Interconnection: Transit Transit is a service whereby a network provides access to the entire Internet. s offering transit service provide access to the entire Internet via their extensive number of global peering arrangements. The Internet F K Peering G C H L D M and may purchase transit service in locations where they are not peers. E I J N Internet ccess Service 10 Transit Service

13 Competition is Driving Lower Transit Prices $1,400 Internet Transit Prices ($/Mbps) $1,200 $1,000 $1,200 $14 $12 $12 Internet Transit Prices ($/Mbps) $800 $800 $10 $9 $600 $675 $8 $6 $5 $400 $400 $4 $2 $3.25 $2.34 $1.57 $0.94 $0.63 $200 $200 $0 $120 $90 $75 $0 $50 $25 $12 $9 $5 $3.25 $2.34 $1.57 $0.94 $ Source: drpeering.net

14 Internet Interconnection: On-net Only On-net Only connectivity is an optional service whereby a network provides access to only its customers. roadband and Transit On-net Only Consumer DSL, FTTx, Cable, Wireless Small or Large Serves OTT video, gaming, application providers Regional to Consumer and OTT video, gaming, applications etc. Content Provider Internet ccess Service Transit Service On-net Only On-net Only arrangements are typically provided to content-rich entities. 12

15 Internet Interconnection: Putting It ll Together The global Internet is comprised of a variety of interconnection options. The Internet F K Peering G C H L D M I Internet ccess Service Transit Service On-net Only Connectivity E J N 13

16 Carriage of Traffic is Not Without Cost 3. delivers the over-thetop video stream from its customer in San Jose (who may be in the same building where and have a peering connection) to at the peering point closest to the video provider, which is in San Jose. San Jose Peering rrangement Illustrative Example: Hot Potato Routing 2. transports the request to its transit customer, the over-thetop video provider, located in San Jose. 1. s customer in Kansas City sends a request to its over-the-top video provider (served by ) to stream a movie. delivers the request to at the closest peering point (hot potato), which is in Dallas. s Metro (Does not include last mile) 5. transports the video stream over its Kansas City metro area network to central offices or cell sites serving its customer. 14 Peering locations 4. transports the video stream across its backbone network to Kansas City using its transport paths and routers. Dallas Peering rrangement

17 Carriage of Traffic is Not Without Cost 2. transports the request to its transit customer, the OTT video provider, located in San Jose. Illustrative Example: Cold Potato Routing 1. s customer in Kansas City sends a request to its over-the-top video provider (served by ) to stream a movie. delivers the request to at the closest peering point, which is in Dallas. s Metro (Does not include last mile) 5. transports the video stream over its Kansas City metro area network to central offices or cell sites serving its customer. 3. transports the video stream across its backbone network to the peering point closest to Kansas City, which is in Dallas (cold potato). Dallas Peering rrangement 4. transports the video stream across its backbone network to Kansas City using its transport paths and routers. 15 Peering locations

18 Cost Implications of Carrying dditional Traffic 1. s peering infrastructure - links and routers/ports needs to be augmented (in all peering locations across the country). Illustrative Example: Hot Potato Routing s Metro (Does not include last mile) 2. s backbone network infrastructure routers and transport needs to be augmented nationwide. 3. s metro network infrastructure will have to be augmented (in all areas it serves across the country). San Jose Peering rrangement 16 Peering locations

19 Cost Implications of Carrying dditional Traffic Illustrative Example: Cold Potato Routing 2. s backbone network infrastructure routers and transport needs to be augmented nationwide. s Metro (Does not include last mile) 1. s peering infrastructure - links and routers/ports needs to be augmented (in all peering locations across the county). 3. s metro network infrastructure will have to be augmented (in all areas it serves across the country). Dallas Peering rrangement 17 Peering locations

20 Internet Interconnection: Key Takeaways The Internet interconnection ecosystem is competitive. s have options for interconnection: the ecosystem is flexible in accommodating various business models. Internet interconnection is fundamentally different from PSTN interconnection: there is no terminating monopoly. Internet interconnection is global and isn t limited by state or national boundaries. Internet interconnection imposes substantial costs on network providers that involve far more than the simple meet-point between networks, that are unrelated to last mile Internet access costs, and that are not end user specific. 18