[Air-l] Internet Governance research

[Bram Dov Abramson]

> UNTANGLING THE NET -
> Bandwidth brokerage, arbitrage and the
> creation of a commodity market in packet-based bandwidth led to
> financial failures partly as a result of failing to consider the
> basic interconnectedness or the internet.

Both of these propositions might need a bit more thought.

Regarding the first proposition: it's a bit hard to know what you mean by
bandwidth brokerage, arbitrage, and commodity market -- they're each
descriptors for very broad classes of phenomena.  If you mean that there
were lots of buyers and sellers and that competition was based mostly on
price then sure, that happened.

But -- and especially in the domain of "packet-based bandwidth", by which
it sounds like you intend "Internet bandwidth" more specifically -- if you
mean that there were well-organised institutional or organisational
mechanisms like bandwidth trading floors for commodities trading in the
form of third-party transactions by people who neither produce nor consume
Internet bandwidth, then this might need some more digging.  Band-X (that
piece is now part of Arbinet) and Invisible Hand Networks represent two
pieces of that puzzle.  But they hardly represent a very significant part
of any Internet bandwidth market.

As to the second proposition: commoditisation -- competing on price and
not on non-price factors -- in a market with relatively few entry barriers
is, indeed, a tough business.  That's what has happened to market
participants in long-distance.  That's what has happened to market
participants in Internet transit.  Add mechanisms to survive at below-cost
prices, like the combination of institutional investors who are nervous
about missing the next big thing, underinformed about how big that thing
is, and have lots of capital to ensure they don't miss it at one end, and
Chapter 11 protection, at the other end, and you have something much more
dramatic.

I suspect that that has much more to do with financial failures, than an
inability to understand the Internet's interconnectedness.  Fred
Goldstein's and Daniel Reingold's books are two really nice accounts of
that story.  I understand Om Malik's is, too, but I have not read it and
can't say.  In any case, there are quite a few.

> Internet peering agreements provide international networks the
> ability to function.

I don't know.  Peering has been really important, and is still kind of
important.  But surely most bilateral BGP relationships are ones of
transit, not peering -- particularly at the international level. 
Quantifying the extent to which this is so would be a valuable
contribution, I think.

> This research proposes to examine peering agreements over x#
> of years and to look at the potential for the development of
> transparency in peering agreements.

Don't get me wrong, though!  This is one of a number of important areas to
look at.  I question whether it is the most significant or even an
extremely significant cost driver, relative to others, in the
international context in which you want to operate -- I suspect that other
cost drivers, most of them related to state-sponsored chokeholds, tend to
be both more determinative, and highly connected, to this issue.  But
there is lots to be said and lots being said on this topic, with a number
of interesting approaches in recent years to try and bring transparency to
this domain.

Apart from the well-known efforts in the context of antitrust actions in
the U.S. and in Europe and, of course, the EuISPA/APEC/ITU meme, see
particularly actions at the federal level in Australia.  In the Canadian
context, the CRTC's Telecom Monitoring reports have addressed this issue
to a very limited extent, particularly in years past (the first 3 issues),
but some very important efforts in BC (BCNET's Transit Exchange model) and
Alberta (via SuperNet) speak directly to this issue, and probably due in a
domestic context -- as do multiple U.S. efforts at the state level, I
suspect -- something similar to what I understand the World Bank has been
trying to put together around the EASSy project.

cheers
Bram