internet architecture

Indeed, the Internet has changed drastically in the last 10 years

The radical change of the Internet in the last ten years

Among the cross-cutting arguments and counter-arguments to the proposal of a fair contribution from major traffic generators to the cost they induce in telecommunications networks, there is one that deserves particular attention. It is often mentioned that this issue was addressed more than ten years ago and did not gain the necessary support to move forward, and since nothing has changed, it makes no sense to bring it up again ten years ago. later. The claim that nothing has changed on the internet in the past ten years is startling.

The truth is that over the past ten years everything changed on the Internet: the architecture of the Internet network has changed, business models have changed, the volume of traffic has increased exponentially and the balance between the companies that make up the Internet ecosystem has changed.

From the initial Internet, based on websites, with a multitude of companies, and a balanced ecosystem between producers and consumers of content, and the telecommunications operators who transport this content, the last decade has seen the consolidation of an internet dominated by a very small number of companies: the hyperscalers. Thanks to their business acumen and thewinner takes all” trend of Internet business models, these companies have achieved a dominant position in the Internet ecosystem which, by 2022, is already indisputable and indisputable, giving rise to a structural problem that requires a solution. This situation has led regions such as the European Union to promote legislative responses such as the Digital Markets Act (DMA).

While this reality is undeniable, all companies and authorities involved in the future and the proper functioning of the digital ecosystem should consider that the time has come to review some of the rules and models that were agreed at the beginning of the era. Internet, and that none more correspond to the reality of 2022. It is time to lay a more solid foundation for the new era of the Internet than the current one, which can only be done on the basis of an understanding of Internet architecture and its evolution.

Initial Internet Architecture

Internet is a network of networks, made up of thousands of interconnected networks. The architecture for interconnecting networks on the Internet was initially hierarchical. There were 3 levels of networks: level 1 was global networks whose interconnection guaranteed full accessibility to any content or user anywhere in the world; Level 2 corresponded to regional networkswhile level 3 was the local networks to which Internet users and content and application providers (CAPs) were connected. Level 1 corresponds to what is traditionally called the Internet spine.

In the early days of the Internet, application and content providers and users connected to a carrier that provided the Internet access service and was responsible for connecting to a higher-level carrier to provide transit to the Internet. global Internet.

internet architecture

As we can see, the interconnection between the different networks that make up the Internet has been made using two different services. When a lower level network connects to a higher level network, it pays for the so-called public transport service. This service allows a user of this network to reach any destination, or access any content, hosted on any network connected to the Internet. Networks at the same level could also interconnect directly using what is known as peering agreement. By directly interconnecting two networks, the use of the transit service is avoided. This service gave direct access to users and content of the two interconnected networks but did not provide visibility into the users and content of the other networks.

Commercially, in transit agreements, the “downstream” network paid the “upstream” network for the service. In contrast, peering agreements are based on unregulated criteria on the number of users and content providers of each network, and on the traffic exchanged. Since operators wishing to interconnect generally had similar network structures, the services – and the associated costs – provided to each other were comparable. The implicit assumption of network symmetry (especially the symmetry of access networks) and costs has led in many cases to release peering agreements based on the assumption that payments made to cover costs incurred on the counterparty’s network would be deducted from payments received from that counterparty. The parameter of symmetry in the exchange of traffic became in this first Internet model a guiding criterion in the negotiation of peering Agreements.

The Flattening of Internet Architecture

The architecture of the Internet has had to adapt to new needs arising from the exponential growth of video traffic (or video diffusion). Several elements have been introduced over the years that have radically changed the architecture of the Internet. On the one hand, video required capabilities that the basic Internet architecture could not provide. This led to the introduction of an element, CDNs (Content Delivery Networks), clouds specialized in video distribution which reduced the need for increased capacity on higher level networks (1 and 2) and reduced latency (the time it takes for content to reach the end user), thereby improving the user experience. On the other hand, as the big hyperscalers grew and consolidated their platform model, they started to build their own selective transport networks (at the most profitable levels) and their own CDN infrastructure. selective.

This change brought a complete transformation of the technical architecture of the Internet. However, the interconnection business model associated with the initial Internet architecture could not evolve. None of the interconnect rules created for the initial Internet could be modified. Or rather, one could say that the hyperscalers have not let these rules change, given the benefit they derive from this interconnection model, and taking advantage of their undisputed dominance in the market to impose rules and conditions.

With the introduction of these elements, the Internet has evolved over the last ten years into a flatter network where the initial levels and hierarchy disappear. Hyperscalers that have achieved dominance and sufficient commercial scale to do so, connect directly to many carriers’ networks at their cheapest tiers, bypassing transit networks, but not as internet usersas they did at the initial stage, but as “The operators” using the peering Agreements. Creating their own infrastructure has allowed large hyperscalers to avoid not only paying internet transit fees, but also the cost of distributing their content, thus gaining a competitive advantage over other players who do not have a position dominant and therefore cannot force free peering agreements.

The architecture of the Internet has become very centralized and dependent on a few players, the big hyperscalers.

The Flattening of Internet Architecture

Internet users, Telecom Operators or Content Providers?

The majority of Internet transit traffic is now generated by large hyperscalers. Moreover, the delivery of their content to end consumers circumvents the traditional Internet hierarchy. Today, 3 of the top 5 Internet transit connectivity providers are hyperscalers. These companies can directly access most networks without going through the Internet hierarchy.

It’s definitely time to ask yourself if internet giants are connectivity providers under the supervision of the National Regulatory Agencies and subject to their decisions, or they are application and content providers, or Internet users, obligated to pay for the connectivity service received. What role should they play in the Internet interconnection model?

The advantage of not paying the costs of using the networks of the operators

When traffic from large hyperscalers increased, and when these companies aggregated most internet traffic, they created their own private network to avoid transit fees. They downgraded their connection to local operators under traditional conditions and related to other networks by forcing peering.

These companies have become a “category” not initially foreseen in the Internet interconnection model: they have ceased to be Internet users and have become “special” network operators without an access network or a national network, but with content giving them a clearly dominant position in the negotiation of peering Agreements.

It is essential to understand that when a hyperscaler trades a peering agreement with a telecommunications operator, it does not do so according to the same principles on which peering agreements between operators are negotiated. Providing essential content and apps (due to consumer demand) gives them bargaining power that usually results in being free peering Agreements. They claim the advantage of not having to pay to use the transport service for their traffic provided by the operators.

This does not seem to be a sign of balanced bargaining power between operators and large hyperscalers. Rather, it shows the distortion of a market which, by not adapting to the evolution of the Internet, can only lead to an unsustainable situation, dominated by a few companies which define the rules, the conditions, and which manage to capture the of the value generated in the digital ecosystem.

Mixing the reality of networks with the reality of large hyperscalers in the interconnect market has resulted in a distorted market. The current definition of the Internet interconnection market is no longer relevant, as it does not take into account the reality of the new interconnection model based on the CDN and cloud the infrastructure of hyperscalers.

Since this situation was never envisaged in the original Internet model, it should lead us to think that the time has come to ask ourselves if this is the right basis to finance the investment effort that are facing telecommunications operators to deploy national backbones and access networks.

The essential debate to build a fairer and more sustainable digital ecosystem

The debate over the fair contribution of big internet companies is the debate over the need to revisit the assumptions that were agreed upon in the 1990s and which, 30 years later, are still applied to an internet that bears little resemblance to the Internet born in the 1990s.

It is legitimate that the companies that have been most favored by these rules want to keep them even in the age of Web 3.0, but there is a broad global consensus that to ensure a fairer and more balanced Internet ecosystem, these rules need to be revised. Legitimate counterarguments to telco claims should be based on data and facts from today’s Internet, not an Internet that no longer exists.

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