Improving Network Costs and Response Time Through Exchanges

Smaller rural broadband providers can leverage Internet Exchanges and other mechanisms to lower their broadband costs while improving network performance. Internet Exchanges also can improve network quality, enhance capacity planning, and offer direct access to cloud services without having to pay transit or adding to network hops.

“Internet Exchanges give you the ability to bypass major IP transit providers and connect directly with the party that your traffic is destined,” said Offir Schwartz, Founder & CEO, Capcon Networks. “It offers the ability to connect to the content providers, the Netflix and Disney+ of the world, by providing a bypass. You can hand your traffic off directly to those content providers without having to pay a middleman or a transit provider for that traffic.”

Using an Internet Exchange to move traffic can offer direct savings of anywhere from 15% to 35% or greater per megabyte of data when compared to the purchase of IP transit from a Tier 1 service provider. Since the Tier 1 provider is no longer the middleman for connecting to other ISPs and content providers, there’s improved latency because there are less hops between source and destination. There’s also increased reliability since providers can connect directly to cloud services through an exchange.

Internet Exchanges reside at regional carrier hotels in major cities, located in places such as Atlanta, Los Angeles, New York City, and Northern Virginia. A service provider would get transport to the neutral carrier hotel and then arrange for network cross connections in a common “Meet Me” room containing fiber and port connections.

“Every [megabyte of data] that is sent out via an Internet exchange at a lower cost per meg is one less meg of traffic that needs to be paid using transit to an upstream internet provider,” said Schwartz. “If you think about it in those terms, every meg I send out via an Internet Exchange is a not only a cost savings to me but is one more user that I’m serving better.”

While advocating for the use of Internet Exchanges, Schwartz pointed out other available solutions to reduce transit costs and improve the user experience, such as the use of Apple Open Cache, Netflix’s Open Connect, and the Akamai CDN service. To learn more about Internet Exchanges and their benefits, listen to the latest Fiber for Breakfast podcast.