A Practical Navigator for the Internet Economy

Private Interconnects as New Apex of Internet pp. 1- 10

In April of this year we reported the establishment of the first private exchange points between MCI and Sprint. Since then UUNET and BBN have joined Sprint and MCI in opening private exchange points or interconnects between each others' networks. Each major provider seems to have between two and six exchange points with every other provider. ANS has also joined the first four and will soon have private exchange points operational with all of them.

There appear to be valid network engineering reasons for opening these private interconnects. One of the participants told us that just one such interconnect enabled it to remove a continuous 20 megabit per second stream of data from an over crowded public exchange point. Nevertheless, the private interconnects have in the past six months become a new Apex of the Internet leaving the five major public North American exchange points that were formerly the top of the stratified internet in a position of diminished priority. At the now secondary level of the large public exchanges, those who had peering agreement with the new top five may very well continue to peer with them but those who did not now find it generally impossible to initiate new agreements.

New national backbone providers have emerged who can meet the 45 megabit per second connect requirements at three of the five major exchanges that would have been good for peering with Sprint or MCI in April. But only six months later they find that the rules have changed. There are now unspecified requirements for private interconnects. A problem that some of these new national providers claim to be finding in the case of the top five is that the local loops from their backbones to the public exchanges are overcrowded. They maintain that a negative consequence of this is that large commercial customers that they have won, and on which they are depending to become large enough to justify private interconnects with the top five, are complaining that access to the customers of the big five is sluggish. They find that it only takes so much sluggishness before those customers disconnect and move directly to the top five. Meanwhile the top five say that they will upgrade their connections to the public exchanges just as soon as they get their private interconnects under control. But, since backbone traffic is exploding (for example a 400% increase on BBN's backbone since January 1996), no one seems to know quite how soon this will be.

We have culled much of this information from a discussion on the NANOG list where one customer complained about packet loss and some serious debate ensued as to what part of the internet's architecture was responsible. However half of our lead article is the result of a private discussion that we facilitated between Sean Doran (Sprint alumnus) and Mike Trest (Chief Scientist of ATMnet). This discussion emphasizes network growth in Europe and describes the problems of keeping a large public exchange afloat from the point of view of technology and the impact of failure on the network itself. Finally it discusses whether the public exchanges might sprout their own backbone and create a secondary entity large enough to gain peering with the top five.

A Rural ISP Business Model, pp. 11-16, 24

We interview Johnathon Dasteel, the owner of Frontier Internet of Durango Colorado. Having started with an emphasis on dedicated 56 kbs sales in May of 1994, Dasteel realized, by the fall of that year, that meeting dial-up demand would be the only means by which he could place an adequate foundation beneath his business. He uses a fifty cent per hour charge for those who exceed fifty hours per month to finance strong customer support - something he finds very valuable in a small community where everyone knows everyone else.

This year, with US West having sold out its local frame relay availability, he has begun to experiment with wireless delivery of his local loops for dedicated customers. He has also just purchased an ISP across the state line in northwestern New Mexico. By February he will have joined the NOCs of the two ISPs by a high speed wireless link and will be dual homed into both Tech Net and the Colorado Internet Co-op.

In the face of deregulation he believes that rural communities had best be prepared to meet their own telecommunication needs. He sees the future of the rural ISP as focused on providing general telecommunications and computer systems integration services to small businesses who, lacking their own expertise, cannot afford to hire one of the large national firms.

We conclude with a Letter to the Editor from Interport describing its own experience and supporting the FASTNET business model outlined last month.

Credibility in the Second Tier of NSPs pp. 17-19

Wild West shoot outs rather than "corporatization" mark at least part of the secondary tier of National Service Providers. AGIS inks a deal with ALLTEL and the press release claims that AGIS is one of only 6 global providers "that have management control of the Internet routing tables, which are the directories that identify the location of all Internet users." AGIS and CAIS report exchange of threats against each other on NANOG mail list.

CPSR's Troubles Continue pp. 20 - 21

On October 18 Seattle based telecom policy analyst Peter Marshall published to the net a report on CPSR that provided detailed information about grants made to Doug Schuler and departed Executive Director Audrie Krause's refusal to endorse a pass through grant requested by former board member Terri Winograd. We republish much of Marshall's article and conclude with a critique of the current board's efforts to put the organization's problems behind it by means of an ad hoc committee headed by new board member Nathaniel Borenstein that is to review and report on the organization's problems.

What is a Viable Business Model for Web publishing? pp. 19, 22

We publish a discussion between ourselves, Mark Stahlman, and Chris Cooper of Quote.com. Stahlman believes that ad revenues as a major source of support for Web publishing over the long term are not viable. We point out that ad revenue assumptions are carrying forward the mass market industrial age paradigm of publishing and add that the web is much better designed to support niche market publications like our own which, with very low overhead, can prosper on a very small subscription base rather than need, like Microsoft's Slate, 50,000 subscribers to break even.