Papers by Bill Woodcock
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Internet bandwidth is produced in Internet exchange points (IXPs) via the interconnection of netw... more Internet bandwidth is produced in Internet exchange points (IXPs) via the interconnection of networks and exchange of traffic among service providers. In most countries, Internet exchange points are built so bandwidth can be produced locally rather than imported from IXPs in other countries. By analogy with the food supply, a country can have its own farms and produce foodstuff locally – being self-sufficient, independent and paying less for fresher produce – or import them from elsewhere and lose those benefits. The economic benefits that normally follow the establishment of an exchange point have not been realized in Paraguay due to a combination of regulatory failure and abuse of market power by the dominant network operators. In September 2000, the Paraguayan Internet industry association CAPADI built an Internet exchange point known as the Network Access Point Paraguay, or " NAPPY , " interconnecting fifteen national Internet service providers. During its first years of existence, the exchange point routed 30-40% of Paraguayan domestic traffic at minimal cost to its members. However, the IXP's growth and benefit have been hampered by COPACO's refusal to connect. Today the NAPPY routes an average of 25-30 Mbps, annually worth USD 43,680. If COPACO were to interconnect at the IXP, that figure would increase to 70-80 Mbps, more than doubling the annual product of the IXP to USD 117,000. If more general regulatory reforms leveled the ISP competitive playing field, this relatively modest gain would be dwarfed by something more nearly approximating the Internet sector's global average of 115% annual economic growth. COPACO abuses its market-dominant position to excludes competition by refusing interconnection with other networks at the IXP. In order to interconnect with COPACO, ISPs are forced to purchase transit services from COPACO or from international providers. Both of these options are so expensive as to effectively preclude new market entrants, and drain capital from established competitors that would otherwise allow them to reduce prices and increase performance to customers, while simultaneously reinvesting in network improvements, as is the norm in competitive markets. Moreover, transit purchased from international providers represents a significant and needless export of capital. In 2005, the telecommunications regulator CONATEL forced Internet service providers to exclusively buy international capacity from the stated-owned national operator COPACO extending its fixed telephony monopoly to the Internet sector. This resolution inhibited the growth of the sector, reducing and concentrating nearly 95% of the corporate and consumer fixed broadband market in only three providers1: Tigo (70% market share2), COPACO (17%) and Personal (12%). In May 2009, a major reform of the Internet regulation was attempted, intending to end COPACO's Internet monopoly and promote competition among service providers. Following the resolution however, Tigo and Personal entered into monopsony agreements with Telefónica and Telecom Argentina respectively, leaving COPACO as monopoly transit provider to the rest of the market. In a separate but also significant problem, the NAPPY facility does not meet the minimum space and power requirements of content provider networks, which leaves the IXP able to serve only the " eyeball " half of the market, which mostly wants to talk to content, rather than talking to itself. Google servers, for instance, are installed within Tigo's network infrastructure, minimizing their value to the rest of the market. P a c k e t C l e a r i n g H o u s e 5 7 2 B R u g e r S t r e e t , B o x 2 9 9 2 0 T h e P r e s i d i o o f S a n F r a n c i s c o S a n F r a n c i s c o , C a l i f o r n i a 9 4 1 2 9-0 9 2 0 U S A + 1 4 1 5 8 3 1 3 1 0 0 m a i n + 1 4 1 5 8 3 1 3 1 0 1 f a x
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Communications of the ACM, 2011
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Oecd Digital Economy Papers, 2013
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OECD Digital Economy Papers, 2013
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Conference Presentations by Bill Woodcock
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Papers by Bill Woodcock
Conference Presentations by Bill Woodcock